LivingSocial Offers $1 Lunches on Friday

Hey Washington, D.C., lunch Friday is on your hometown tech star, LivingSocial. Well, almost.

In an effort dubbed “Dollar Lunch Day,” numerous restaurants will be offering lunch for $1 between 11 a.m. and 2 p.m. EST on the daily deals platform. “They’ll be everything from burrito shops to four-star restaurants,” Maire Griffin, LivingSocial spokesperson, told ClickZ.

The daily deals company is attempting to make a big splash with its month-old “Instant Deals” feature for its mobile app. The GPS-enabled app creates a list of deals within a half-mile of the user. On Friday, D.C. dwellers can purchase a limited-time $1 offer via the app or the web. While three-year-old LivingSocial has been known as a web and email-based marketer, Instant Deals signals a shift for the company toward mobile.

“We have millions and millions of app downloads for iPhone and Android,” Griffin said. “We are finding that our subscribers like to purchase through all of our channels, on their phone, via email, and the web.”

Instant Deals already seems to be a hit among Washington, D.C.-area restaurants. On Wednesday, as many as 48 establishments were offering between 50 percent and 80 percent off purchases for time-limited deals. The restaurants were in neighborhoods like Georgetown, Adams Morgan, Chinatown, Dupont Circle, and Capitol Hill, as well as suburbs like Bethesda, MD.

On a larger scale, LivingSocial’s mobile offers feature represents how the daily deals, location-based services, and social media niches are converging. Indeed, “geo-social deals” – or simply “geo-deals,” perhaps – is a new marketing terrain.

LivingSocial’s chief competitor, Groupon, last month released an upgraded mobile app that entails “Groupon Now.” The feature offers a pair of choices on a user’s smartphone: “I’m hungry” and “I’m bored.” When a user selects one, they see numerous choices based on the time of day and their location.

And other location-based deals features have recently been introduced for Facebook Places, CitySearch, CardStar, and AT&T, among others.

According to a recent BIA/Kelsey report, those companies’ focus on deals may pay off. The Chantilly, VA-based research firm estimates the daily deals niche will be a $4 billion industry by 2015. In 2010, BIA/Kelsey found daily deals services captured $873 million. If correct, its projections indicate a 35 percent compound annual growth rate during the next four years.

Groupon and LivingSocial are the clear leaders in a space involving around 200 deals-based brands. Issues that many of the players will have to endure include market fragmentation and whether they can attract enough subscribers.