“Timing is of the essence when partnering with a daily deal operator,” says Tony Ellison, CEO of Shoplet.com. “You need to time your offer properly.”
That’s why the online-only office supplies retailer, No. 130 in the Internet Retailer Top 500 Guide, is running its first national offer with LivingSocial this week as consumers are in the midst of buying office supplies. It’s also why Shoplet is likely to run another promotion—with LivingSocial or another daily deal operator—during the holiday season, when shoppers are likely to buy electronics, like laptops, Ellison says.
Shoplet’s offer this week is for a readymade assortment of products, such as pens, notebooks and a stapler valued at $50 for $25. The offer is larger than its previous, regional offer of a $20 voucher for $10 that ran in southwestern states in June.
More than 5,000 consumers bought that June offer, which generated sales with an average order value north of $100. That large average order value more than paid for the commission that LivingSocial takes from each sale, says Ellison, who declines to disclose the percentage he paid. Daily deal operators like Groupon and LivingSocial typically take between 40% and 50% of the revenue, which in this case would be about $4 or $5. Ellison says that while it is too soon to judge the lifetime value of the customers Shoplet acquired via the voucher, the returns have been “promising.”
While the $20 voucher worked well, LivingSocial required Shoplet to increase the voucher’s value when its offer ran nationally, says Ellison. But even with shoppers receiving a readymade assortment of products, with the voucher, he expects many shoppers to buy additional items when they redeem the voucher. That should help the retailer recoup some of the commission the retailer pays LivingSocial, he says.