Deal Sites Like Groupon Change How We Shop

Guests

Matt Schwartz, freelance writer
John Bax, CFO, LivingSocial
Janice Fitzgerald, owner, By the Side of the Road Inn & Cottages

Nurtured by hard economic times and innovative technology, sites like LivingSocial and Groupon have boomed. The websites take coupons to a new level as would-be buyers recruit friends to share in deals on everything from jewelry to take-out. Retailers have jumped on board — with mixed results.

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LYNN NEARY, host

This is TALK OF THE NATION. I'm Lynn Neary in Washington.

Every morning, hundreds of thousands of people check their email and find something they never knew they always wanted. Groupon, LivingSocial, SlickDeals, all send them one delicious daily deal.

Maybe it's half-off a local Italian restaurant or maybe it's a week of trapeze lessons. But you have to act that day or the deal disappears. These are social buying websites and their power is growing.

Shoppers across the country are nabbing deals on dining, hotel rooms, spa treatments and recreation. Many deals are for local businesses, but both LivingSocial and Groupon have grabbed subscribers by offering deals from Amazon and the Gap.

It's a new kind of shopping, some say, partly a result of recent economic travails and partly a whole new retail philosophy, where deal hunting is a sport.

Later in the hour, as conflicting reports soar out of Libya, what's the impact on gas prices and how bad could it get? But first, social buying.

If you're a retailer that's participated in these daily deals, give us a call and tell us how it turned out. Our number here in Washington is 800-989-8255. Our email address is talk@npr.org and you can join the conversation at our website. Go to NPR.org and click on TALK OF THE NATION.

First up, Matt Schwartz joins us today by phone from Louisiana. He's a freelance writer and contributor to Wired and other publications and his article "Bargain Junkies Are Beating Retailers at Their Own Game" appeared in Wired magazine. Welcome to the program, Matt.

Mr. MATT SCHWARTZ (Freelance Writer): Hi, good afternoon.

NEARY: So I have to be honest. I'm a complete newcomer to these sites. I really had not been familiar with them until I was getting ready for the show. So maybe for me, and for others like me, you could explain a little bit more about how these social buying Websites work.

Mr. SCHWARTZ: Sure. My article for Wired talks about two groups of Websites.

The first is are sites like Groupon, which for a limited amount of time will let people buy a dinner out at a restaurant or jeans at the Gap for usually around 50 percent off what it would normally cost, which is a pretty attractive proposition. And then Groupon keeps half that money and the retailer gets the other half, which is half of half - or a quarter.

The second group are these really, really granular sites, where people trade tips and can save 90-95 percent on their grocery trips by compiling all these advanced deal-hunting techniques.

NEARY: Now you actually followed a woman who, I think she made money when she went to the grocery store.

Mr. SCHWARTZ: Yeah. I watched a very capable shopper in North Carolina buy about eighty dollars worth of groceries and they actually rang up a bell pepper wrong. And so, according to the store's policy, she got two dollars back, which actually put her into the black for the trip.

So she made money shopping. And this was all by following established store policies - established coupon policy. She didn't have to break any rules

NEARY: Yeah. So just the listeners out there understand that this is -what we're talking is sort of online - in some cases, is sort of online coupons, right?

Mr. SCHWARTZ: Yes. Some of the coupons come from online and then also there're these forums, where people who get coupons from off-line; from newspapers and from the mail. You know, they gather together and they trade tips. And so they're able to become much more advanced and save a lot more money than they'd be able to on their own.

NEARY: Is there any explanation for why there's this sort of resurgence of interest in coupons at this moment?

Mr. SCHWARTZ: Well, the Internet's the medium that's allowing it to happen. But I think there are two fundamental trends.

First, is the recession. People don't want to spend money and they're looking for way to negotiate prices down. And second, I think, sometimes the money's just an excuse.

The other problem is that shopping is a little bit boring and a lot of our landscape is this kind of, you know, blah strip mall, strip mall shopping. And consumers are looking for a richer, more game-like experience when they're out in the world. And coupons are giving them a way of doing that.

NEARY: We're talking with Matt Schwarz. He's a freelance writer and contributor to Wired and other publications. And we're talking about online deals, online shopping, online coupons. If you'd like to join the conversation, we're at 800-989-8255. And we're going to take a call now from Ruben(ph) in San Antonio, Texas. Hi, Ruben.

RUBEN (Caller): Hi, how are you?

NEARY: Go ahead.

RUBEN: Oh, yes. I just wanted to mention that I am an advocate and a fan of Groupon. I was just mentioning that I sure look forward to my 4:00-4:30 AM ring on my iPhone that lets me know that Groupon has arrived. I think one of the funniest things I've ever purchased was a Texas spheroid. And it's this huge hamster ball that you just kind of roll down a hill. Everything from that to - just like you mentioned -(unintelligible) restaurants that are 50-60-70 percent off. And so, it's just been great.

I will say that I don't agree with, necessarily, that purchasing going out into shopping malls is boring, but getting deal in any case is fantastic. And so that's an exciting part of it - that you're saving money, you're saving sometimes more than 50 percent off the price and, you know, and they're good products, good deals. And so, it's just fun and exciting and so that's why I do it.

NEARY: So Ruben, I just want to clarify here. You are being awakened every morning at by this?

RUBEN: Yeah, exactly. I got a little ringer that notifies me that I got a new email and it's always been the same time, usually around 4:00, 4:30 in the morning. And it just lets me know that there's a new email, which is Groupon sending me my email, sending me the Groupon for the day.

(Soundbite of laughter)

NEARY: Well, happy shopping to you then, Ruben.

RUBEN: Well, thank you. Have a great day.

NEARY: OK, that's a very different personality from my own, I have to say, Matt. So maybe you could describe who are the people who really are so enthusiastic about this.

Mr. SCHWARTZ: Yeah, and I think we're talking about two groups of folks here. They're folks like Michelle Harrison - the woman from North Carolina - who are using couponing(ph) techniques and trading them in order to buy things for their own use, to get things that they need, like basic staples - food and groceries.

And then there are folks who are going to Groupon and other sites, who are looking a more experiential coupon experience, to buy things they might not otherwise buy. And I think that's another reason that Groupon has drawn such a high valuation and so much enthusiasm is that, even in a recession, it's found a way to get consumers to open up their pockets and to spend money in places that they otherwise wouldn't.

NEARY: Yeah. And that whole idea of buying something that you might not otherwise buy - I mean, we just heard from a caller who, you know, obviously bought something he'd never thought of buying before. I don't know, is that a good thing, Matt?

(Soundbite of laughter)

Mr. SCHWARTZ: I'm not sure it's a good thing or a bad thing. I mean, I think it kind of depends. I mean, if you're enjoying it and it's within your budget, it's probably not the worse thing.

But another phenomenon that's sort of similar is stockpiling, where, you know, there's a lot of folks who they buy way more groceries than they need at the deepest discounts possible. Then take photographs of them, post them to the Internet and sort of turn their houses into these gray market warehouses. And then they take the stuff and it at flea markets or they give it to charity. But it's clearly not about the value of the item anymore, which I think has some parallels with the caller's comment.

NEARY: All right. Let's take another call from Chris(ph) in San Francisco. Hi, Chris.

CHRIS (CALLER): Hi, how's it going?

NEARY: Good, thanks. Go right ahead. You still there?

CHRIS: Oh, well, I had a restaurant and I participated in Groupon and I found it was a double-edged sword experience, leaning much more towards the bad side. The Groupon staff had the very high-pressure sales team that goes after businesses to offer deals that don't make any financial sense whatsoever for the businesses. And you don't really realize that until you've already done your deal. And then you resell...

Mr. SCHWARTZ: What do you feel like was the difference between what they promised you and what you got?

CHRIS: Well, we just got a lot of customers that were way outside of our target demographic and Groupon, they inspire you to do a deal that is well below your cost. And I see a lot of restaurants - like there was a Thai restaurant, the other day, that did a deal in San Francisco, and they sold 2,600 of these, and I was like: Oh my God, that's going to put them out of business.

NEARY: Why, because they wouldn't be able to handle that kind of business?

CHRIS: They can't handle the amount of volume. You get overrun by Grouponers, and then you just can't handle it.

NEARY: So would you ever do this...

CHRIS: It alienates your regular customers, and you're not making any money. You've got to hire additional staff to satisfy these Grouponers, who are also highly active on Yelp, as well. And see, a lot of people who had an unfavorable Groupon experience go right to Yelp. And it's like: Well, hold on, this isn't really fair because you're not listening, you're not reading the fine print of the deal, you're not following the guidelines.

NEARY: Chris, let me ask you something. Did you feel you got anything out of this, that you got the name of your restaurant, you got some marketing out of this? Was that a good thing?

CHRIS: We did, yes. I mean, but what it's done is it's created this dichotomy of consumer, that instead of being a repeat-type consumer, they're just going from one deal to the next to the next.

NEARY: Interesting.

CHRIS: And most small businesses are already working on very slim margins. So when we take these margins away from small business, you're not giving them any benefit whatsoever.

NEARY: All right, thanks so much for your call, Chris, and...

CHRIS: And I've also founded a Website called boycottgroupon.org.

NEARY: I guess you're really opposed to Groupon if you've done that. Thanks for your call, Chris.

Matt, there's one very unsatisfied retailer. I mean, what are you hearing from retailers about this? Maybe consumers...

Mr. SCHWARTZ: Yeah, there have been a lot of complaints similar to Chris's, particularly from restaurants. I've never been on the receiving end of a Groupon sales call, so I can't really speak to that.

I do know that they let retailers cap the number of deals that they've offered. But ultimately, if you're selling your product at a loss, then it needs to be - the idea is that the money you're losing has to come out of your advertising budget. You can't support your business on, you know, selling things for less than they cost.

So Groupon's pitch is that some of these customers, if your product is good, are going to stick around and turn into repeat business. The question is whether - will consumers pay full retail price, you know, having already gotten something for half-off? Or is that to cause them to, you know, see this as like a one-time thing that isn't worth the sticker price?

NEARY: Well, and I'm wondering how the scales are going to tip, ultimately. Is this going to be something that going to really continue to be a big thing, or if a lot of retailers start being dissatisfied, it won't work unless you've got the retailers buying into it, will it?

Mr. SCHWARTZ: Oh, no, not at all. It depends on Groupon being an honest and trusted broker between their users and between retailers. And I think what's going on now, is Groupon has to fine-tune their own methodologies, how they're presenting this to users and to businesses in a way that gets them in, and gets them excited about it, and gets them to sign on the dotted line, but also makes them feel like they've been treated fairly afterwards.

NEARY: We're talking about what happens when social media meets shopping. Sites like Groupon and Living Social are booming. If you're a retailer that's participated in these daily deals, how did it turn out? 800-989-8255. And the email address is talk@npr.org. We're going to continue our conversation after a short break. I'm Lynn Neary. It's TALK OF THE NATION from NPR News.

(Soundbite of music)

NEARY: This is TALK OF THE NATION, from NPR News. I'm Lynn Neary.

Two-and-a-half years ago, nobody had ever heard of most social shopping sites. Now, Groupon expects to pull in more than $500 million in revenue this year. Other sites are growing, as well, including LivingSocial. We'll talk with one of its executives in a moment.

If you're a retailer that's participated in these daily deals, give us a call and tell us how it turned out. Our number here in Washington is 800-989-8255. Our email address is talk@npr.org. And you can join the conversation at our website. Go to npr.org and click on TALK OF THE NATION.

Matt Schwartz is our guest. He's a freelance writer and wrote the article in Wired "Bargain Junkies are Beating Retailers at Their Own Game." There's a link to it at npr.org. Click on TALK OF THE NATION.

And joining us now is John Bax. He is the CFO at LivingSocial. He joins us here in Studio 3A.

Good to have you with us, John.

Mr. JOHN BAX (Chief Financial Officer, LivingSocial): Thank you.

NEARY: So how is - is your site the same as Groupon? Is it different?

Mr. BAX: It's quite a bit different. We are a local commerce engine. We're, today, in about 11 countries. We have close to 20 million subscribers offering deals in about 200 markets every single day and providing our local merchants and our consumers with a daily experience of something unique and different that often is things that they hadn't bought before or hadn't considered buying.

You know, different from this experience that this prior merchant had, the one that called in a little bit ago, we have local boots on the street in every single that we're live in. So today, we have about 450 people in the streets.

We have a salesperson in Lubbock. We have two people in Des Moines. We have multiple people - whether it's in St. Louis or Kansas City or Tulsa - selling this face-to-face, eye-to-eye with that local merchant.

And what's important to us is that we structure a deal that works for the merchant, works for the consumer and works for us. And if it doesn't work for both of those parties and then us as the local commerce engine, then it doesn't work, and we don't want to run it.

We're going to make a few mistakes, but all in all, we have to structure a deal that works for them, because we want repeat business, both from the merchant and from the consumer.

NEARY: But so then how does it work? I mean, do you then not sell, for instance, so many deals that a particular business won't get overrun?

Mr. BAX: Yeah. We do a lot of due diligence on that particular business to make sure they can handle the sort of volume that we'll send to them. We'll let them cap any deal. It doesn't matter what it's at. We'll let them cap it. And we do a lot of investigation to make sure that the business can handle the sort of volume that we feel we're going to be able to send to them.

We've been in, you know, live around the country for, you know, a little over a year. So we have a very good experience about knowing, based upon the size of our email list, how many consumers we're going to send to that merchant. And again, we'll make a couple of mistakes, but all in all, we do a pretty darn good job of making sure that that merchant can handle the sort of volume that we're going to send to them.

NEARY: All right. We're going to go to the phones now. We have a lot of people waiting. We've got Anthony in St. Louis, Missouri, on the line.

Hello, Anthony. Hi, Anthony?

ANTHONY (Caller): Hello?

NEARY: Hi, go ahead.

ANTHONY: Yeah, my wife and I have a fitness business over in St. Louis. We got contacted by LivingSocial, I'd say, last November. And at the time, it sounded like it was a really great thing for us. Then we started really looking more into it, and after doing it, we've been contacted from places like DealOn, and recently, my wife got contacted by Groupon not too long ago. And it's just not something we want to do anymore.

NEARY: Why is that? Why didn't it work out for you?

ANTHONY: Well, because we take into consideration, you know, we have a small - it's a small fitness studio, you know, for women, you know, which we didn't expect to get a lot of sales. We got enough, you know, where we could handle, which wasn't bad.

Unfortunately, you discount 50 or 60 percent from whatever we're offering, and then you have - like LivingSocial, they took a certain percentage out, which really didn't leave us with very much. And then the turnaround for the clients that came back to us was very small. It was a lot less than what we were looking for.

NEARY: Let me ask John Bax to respond to what you're saying, and thanks so much for your call, Anthony.

I mean, what is the benefit for retailers? I mean, do they really get return business through this?

Mr. BAX: Yeah, they do, and that's how we structure the deals to work for them. We do run a lot of fitness studios. We run a lot of yoga studios, a lot of fitness boot camps, those sorts of things. And what really works for the merchant is one where they'll get new customers that'll come in, they'll try it for 30 days or for 90 days, and then turn into repeat customers of theirs.

And, you know, it's really about getting a new customer in the door for them and offering that consumer a value that gets them to try something they might not have tried before.

NEARY: Yeah. Let's take another call, from Linda in Nashville, Tennessee.

Hi, Linda.

LINDA (Caller): Hi.

NEARY: Go ahead.

LINDA: Hi. I actually had a wonderful experience as a Groupon retailer. And I think the main thing that people need to focus on is that, like with any other kind of advertising that you do, you have to be strategic about it.

I teach belly-dancing classes, and - which apparently is - there have been a lot of belly-dance retailers around the country using these types of things. And it's been working really well for me, actually.

I did not have a flood of students show up all at once, at least not beyond what I could handle. And even though I really was only making about $2.50 a class, whereas I normally take in, you know, about $10 a class from my students, there were classes I was going to have, anyway. I had room, anyway. So it's like I'd rather have them there.

And I'll tell you: Of the people that bought the Groupon, I sold 145, and I've probably only had about 30 of those people come to classes so far. And of the people that came to classes, I'd say half of them either bought product from me - because I sell, like, hip scarves and things, and jewelry. They either bought products, or they bought further, you know, classes and things like that.

So I can see how restaurants wouldn't do well with it, but I think any kind of service-based industry could do really well with it. But it depends on the kind of capacity that you have and what you need out of your business.

I mean, you have to be smart about it. If you don't want 100 new customers to come in in the next two months, don't go on Groupon. So...

NEARY: All right. Thanks for your call, Linda.

LINDA: Sure, thank you.

NEARY: Maybe you can explain a little bit more to me how this works, John Bax, because you have to get enough people buying in to make it a value to those people, right? I mean, the more people that buy, the better. Is that correct?

Mr. BAX: Yeah. It depends on the sort of volume that the merchant wants, which is one of the keys that you have to set up before you set that deal is to figure out how many customers that merchant really wants and how many they can handle.

A lot of our larger cities, we split them into two, three, four lists. If it's a really big merchant, they'll be very popular with our customers who can handle a lot of volume. We might run them citywide. Other ones, we might run them in specific neighborhoods and not run the entire city.

You know, the businesses she mentioned, businesses that have a high fixed cost and a low variable cost, it works extremely well for. A couple weekends ago, we ran a deal for skydiving here in Washington, D.C. We sold 3,700 deals for $150 a pop. You know, we sold a little over - it was about $555,000 of volume for this particular merchant. So far, it's worked extremely well for them, worked well for us.

And the thing that's really interesting, going back to one of your very first callers, is most of those people, when they woke up that morning, they didn't realize that they wanted to jump out of an airplane until we put that deal in front of them. And so it's really - in some ways, it's economic stimulus for, you know, people trying things out they never would have tried out before.

NEARY: Yeah, and people buying things that they never would have bought before. I mean, when I was reading about this, I thought: This is one -this is, like, a good step towards somebody who might be a hoarder. I mean, it just seems like - you could see how some people might just be buying things for the sake of buying things - which is good, I guess, for you, but, you know...

Mr. BAX: Well, there's certainly a little bit of the shopping experience, too, with the 24-deal, and there's a sense of urgency about it. But again, I think it really gets people to try things that they've never tried before.

And, you know, we have, you know, just hoards of happy customers that have done things that they never thought they were going to do until they tried out LivingSocial.

NEARY: Janice Fitzgerald is one of the many retailers who have gotten in on social buying. She's the owner of By the Side of the Road Inn & Cottages, and she joins us from Harrisonburg, Virginia.

Welcome to the program, Janice.

Ms. JANICE FITZGERALD (Owner, By the Side of the Road Inn & Cottages): Thank you. I'm glad to be here.

NEARY: So how did you learn about LivingSocial?

Ms. FITZGERALD: LivingSocial came to my attention because I have a family member that went to work for them. It's as simple as that.

(Soundbite of laughter)

NEARY: So you decided to try it.

Ms. FITZGERALD: Sure. In Harrisonburg, we wouldn't have been exposed to LivingSocial as early as we - we certainly know about it now, but our deal ran April 30th of last year, 2010. And LivingSocial was brand new, and I don't mind confessing I'd never even heard the word Groupon.

I didn't know what it was about, but I started researching it because of my interest in my loved one, and was intrigued by the opportunity that it may present. I thought it might be a great way to deliver me to some people that I'd like to reach in the Washington, D.C., area.

NEARY: And how did it work for you?

Ms. FITZGERALD: It worked fantastic. In fact, it was an extremely interesting to LivingSocial, as well as to By the Side of the Road. My house is By the Side of the Road Bed and Breakfast, named after a poem by Sam Walter Foss, "The House By the Side of the Road," by the way.

We sold 702 two-night getaways in less than 10 hours. To put that in perspective for you, my inn, which has been in operation almost 12 years, was happily rolling along with about a 35-percent occupancy rate, which isn't great, but it's not - it's a little bit under the industry standard. And in 2009, that meant about 645 room nights for me the entire year.

In a 10-hour period on LivingSocial on Friday, April 30th, between 7 a.m. and 4 p.m., 5 p.m., something like that, I sold 1,400 room nights. It was absolutely incredible and totally unexpected.

NEARY: And do you see customers coming back then?

Ms. FITZGERALD: Well, if you think about a stay at bed and breakfast, our guests started redeeming those vouchers that they purchased from LivingSocial on April 3rd, just a few days after they bought it on the 30th of April. And most people come to a bed and breakfast about once a year. I won't experience my return guests until probably this coming April.

However, what I can tell you, because I'm a very analytical person by nature, is I've been collecting a survey from each guest and we've redeemed 350 of those two-night getaways now, so I have a great database of information that I have been accumulating about the value of this kind of marketing. And every one of them has said, yes, they will come back. They've even said as - been as specific as if there's another great deal or even without one. So I hope we're doing something right, and I certainly am counting on that as part of the, you know, expense of this kind of marketing.

NEARY: Well, Janice Fitzgerald, thanks so much for joining us today.

Ms. FITZGERALD: You're more than welcome. I was glad to be here. Thank you for having me.

NEARY: Janice Fitzgerald is the owner of By the Side of the Road Inn & Cottages, and she joined us by phone.

And we have an email here now. Wine bar owners in Portland, Oregon, used Groupon intending to attract customers to their newly opened wine bar. It was a disaster. They had to put on extra staff to cope with the flood of Grouponers. Material costs went through the roof. And the Grouponers just moved on to the next deal and never came back. They closed the wine bar down two months ago. Groupon might work for pure service businesses with spare capacity. But where material costs are a factor, it doesn't pay.

Matt Schwartz, I want to bring you back into the conversation because I want to say what - where is this all going? We're hearing some very mixed things, I think, from people in the retail business who have used these Web services, these Web deals. Where do you think it's going? Do you think this is going to last?

Mr. SCHWARTZ: I think it will in some way, shape or form. You know, what John said about fixed costs and variable costs, we're hearing a lot of negative feedback from restaurants and wine bars and a lot of positive feedback from skydivers and bed and breakfasts and places that had to be up and running anyway, so I think that's one big point.

Another is that consumers are being trained here to see price as something negotiable and to see it not as like a fixed fiat quantity that they either have to take or leave, and I think that's going to be -you know, one lasting lesson of these sites is you're going to see more and more consumers utilizing their bargaining power across the counter.

NEARY: All right. Let's take a call now. We're going to go to Raj(ph) in St. Cloud, Minnesota. Hi, Raj. How are you?

RAJ (Caller): Hi, Lynn. How are you?

NEARY: Good. Thanks. Go ahead.

RAJ: Thanks for taking my call. I'm a consumer and I actually received both Groupon and LivingSocial deals, but I actually have never used either. And the reason I've never used LivingSocial or Groupon is that it just doesn't fit in my budget.

I'm a recent grad from college. I'm 24. And there are a lot of really great options that I've thought about and wanting to buy, but when it comes down to it, it's not something that - it's always something new. Like Tom was saying earlier, it's not something that I already plan to do.

If I plan to go to a bed and breakfast, and that was something that I needed to do, I absolutely will use the Groupon to buy that deal. But if it's skydiving or, you know, Amazon book discard when I don't need a book from Amazon.com, I'm not going to use a Groupon.

So one thing that I think, for me, by being in the target demographic that would make it even more accessible or even more useful to me is if it's something that's an everyday use that provides a discount to me. And then that brings in, I guess, the question for the retailers. Is it valuable for them...

NEARY: Right.

RAJ: ...to, you know, to offer them?

NEARY: Because as we said before, it has to be a two-way deal.

RAJ: Yeah. I'll take my comment off the air. Thank you.

NEARY: Okay, thanks so much for your call, Raj.

I just want to remind you that you're listening to TALK OF THE NATION from NPR News.

And, John Bax, if you would want to just respond to it.

Mr. BAX: Yeah. It's interesting. So we'll run items that are as cheap as, say, $5 for $10 worth of bagels or $10 worth of yogurt, and then we've also run items as expensive as a $2,100 LASIK surgery, and both have done very well for us. And so there's a very wide range of price points that work for the consumer and for the merchant.

And one thing that's a little bit of a misconception, sometimes people hear about the deal and they think they've only got 24 hours to use the deal. It's really 24 hours to buy the deal. Most of them are held open for six months, sometimes as much as a year. Janice, I believe, is holding hers open for a couple of years for people to redeem. So it's not like you need it on the spot and, you know, right that day, right that instant. It's really anything that you can use for the next six months to a year, typically.

NEARY: And now, if enough people - if you don't get enough people to buy in, do you have to drop the deal? I mean...

Mr. BAX: We don't have a tipping point. We tell the merchant that is, you know, whether we sell one or we sell 5,000, we're going to run that deal and we're going to honor it. So it's not like a certain number of people have to do that. And for some consumers, it's a little bit troublesome if they sign up to buy the deal and lay down their credit card and those sorts of things and then not know that the deal is going to go unless it hits a certain amount. So for the consumer, we make sure that really on deal one, first one, it's - is available.

NEARY: Okay. Let's go to Trey(ph). And Trey is calling from San Antonio, Texas. Hi, Trey. Trey, are you still there? I think Trey must - may have gone away. Thanks for - sorry about that, Trey. We'll go on to somebody else. Let's go to Sabien(ph) who is calling from San Jose, California. Are you still there, Sabien?

SABIEN (Caller): Oh, yes, I am. Good afternoon. Groupon, it's a very good idea. My parents live in Europe and I used to send them boring flower for birthday, and now with Groupon, I just hit a Groupon in the city where they live in France. And we go, they can have restaurants, massage, everything. It's a very great idea.

NEARY: All right. Well, thanks for calling. And Sabien brings up an interesting point, which is that you can give these as gifts.

Mr. BAX: Yeah. We have a very large number of our items that are not used by the person that bought it for them. For example, one of the large items we did that did very well was NASCAR driving lessons. And about 40 percent of the buyers of those were women and we're moderately confident that a good portion of those were given to others.

(Soundbite of laughter)

NEARY: Okay. John Bax is the CFO for LivingSocial. And also joining us today was Matt Schwartz, freelance writer and contributor to Wired and other publications. He wrote the article in Wired, "Bargain Junkies Are Beating Retailers at Their Own Game." Thanks to both of you for being with us.

Mr. BAX: Thank you.

Mr. SCHWARTZ: Thank you, Lynn.

NEARY: And up next, what the protests and violent crackdown in Libya and other Middle Eastern countries mean for oil prices.

I'm Lynn Neary. It's TALK OF THE NATION from NPR News.

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