It didn’t take long for LivingSocial’s new retail space at 918 F Street NW to cause backlash toward the daily deals company’s aims of hosting its own pop-up restaurants, classes, concerts and other events.
The Post reports today that several creatively inclined companies are “up in arms” over the six-story, 28,000-square-foot building that opened last week with a four-day pop-up restaurant by Graffiato chef Mike Isabella, who used the venue to preview his forthcoming Mexican spot, Bandolero. With LivingSocial’s ability to sell culinary and artistic experiences at discount prices to its vast membership list, some groups like painting-and-partying society ArtJamz are feeling undercut.
“It’s a free market, but LivingSocial is using Wal-Mart principles against the creative community,” ArtJamz founder Michael Clements told the Post.
Clements was troubled to learn that for one of the first events at its venue, LivingSocial offered a two-hour painting class, complete with wine, for $29, half the price he typically charges. Adding insult to injury, 3,326 people purchased tickets for the event, about the total number of customers ArtJamz hosted in 2011.
Pink Line Project founder Philippa Hughes was also wary of the new space. “All of these people did these events and made them cool, but then LivingSocial gets to come and replicate them less expensively,” she told the post.
If there’s any underselling going on with 918 F Street, it’s more likely in the non-food categories, which as off-the-menu events are tougher to apply a fixed cost. Isabella’s Bandolero preview, for example, sold for $119, while an upcoming series of dinners by the chefs and beer experts at Birch & Barley goes for $85.
But Doug Miller, LivingSocial’s senior vice president for new initiatives, told the Post he was a bit stunned by the reaction. LivingSocial sees 918 F Street as an enticement for merchants to work with the company, its communications director, Maire Griffin, told DCist last week. In the Post article, Miller even suggested ArtJamz could be a potential future business partner.
That might not be necessary, though. ArtJamz, which since launching at the Corcoran Gallery of Art in June 2010 has hosted about 80 pop-up events around town, is opening its own permanent studio in Dupont Circle next month, where it will be able to sell its paint-as-you-mingle events at its own price of $65.
Clements still owes some of ArtJamz’s success to the daily deals industry, telling DCist a sale he conducted in 2010 with LivingSocial’s chief competitor Groupon provided his business with an early bump.
“But when any merchant runs a deal, they have to establish in commerce a retail price,” Clements said in a phone interview. The $29 LivingSocial asked for the painting class at 918 F Street is less than half the cost of an ArtJamz session, a price Clements hinted was gleaned from a survey of art classes around town.
LivingSocial hosting events under its own roof might also tip the balance of how it divides up its sales, Clements said, though LivingSocial keeps guarded about such information. When just selling a coupon for an art class for $30, Clements suggested, “it’s probably you get $22 and they get $8. Now LivingSocial gets $29.”
Just as he said LivingSocial is “evolving,” Clements said the same is happening for ArtJamz, albeit on a much smaller scale. The forthcoming Dupont location is a testament to the growth of the District’s creative economy, he said, and will allow ArtJamz to have a consistent revenue base while continuing its series of pop-ups and other offsite events.
But LivingSocial trying to draw one-off arts offerings from galleries and warehouses to its retail locations?
“Maybe it’s a little bit of a Trojan horse,” Clements said.
