November 15, 2011, 11:30 AM

LivingSocial takes a step away from discounts

The daily deal operator’s Instant service tests full-price food ordering and delivery features.

Lead Photo

LivingSocial today launched its first two full-priced offerings.

The more upscale of the two is called Room Service. The service delivers high-end meals to consumers’ doors, complete with restaurant-quality presentations served atop actual tableware. LivingSocial handles the delivery service for the restaurant, which includes delivering the food and picking up the tableware and cloth napkins the following day.

The daily deal site operator also launched a more modest version of the service that enables consumers to order food for pickup or delivery via its Instant deals program. Both services are available only in Washington, D.C.  



The full-priced services differ from LivingSocial’s usual discount model. LivingSocial is billing the offerings as a suite of marketing tools that restaurants can leverage according to their needs. Room Service enables restaurants to effectively add more tables without expanding their space, says Steve Rice, product manager for LivingSocial Instant, its instant deals arm. The delivery and carryout service offers restaurants a new way to attract diners.

The delivery and carryout service is similar to offerings from companies like GrubHub Inc. However, LivingSocial will rely on its large customer base to attract consumers, says Rice. "The scale and nature of our relationship with customers is what makes us different," he says. "We have a lot of customers that are excited about making a purchase from us. We're giving them a greater variety of things they can buy from us."

Consumers can order either service by clicking the Instant button on After entering his address, a consumer can click to see restaurants that offer Room Service, delivery and takeout, as well as dine-in specials.

The offering is the latest attempt by LivingSocial to expand its reach. Earlier this year it launched a service featuring offers for high-end food and restaurant deals, expanded its LivingSocial Escapes travel site that sells vacation packages and introduced its daily deals in new markets in Europe, Southeast Asia and the Middle East.

"Our goal is to find ways to work with more merchants," says Rice. "Every business has unique characteristics that might mean that one of our offerings might work for them, while another of our products might not work."

LivingSocial, on average, takes a revenue split of 40% to 45% of the revenue generated from its daily deals, according to investment analyst Herman Leung of Susquehanna Financial Group. The daily deal operator declined to disclose the revenue split for its new offerings. 

LivingSocial now serves more than 34 million subscribers across 25 countries.

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