Amazon Local Launches for Daily DealsBy: Chris Crum - June 2, 2011
Clearly the daily deals space is on fire. That was true even before Groupon filed for its IPO today.
Now the web’s largest retailer has something called Amazon Local, which is featuring deals from LivingSocial, the Groupon competitor that Amazon has invested in.
The Next Web gets credit for first reporting on this service, which didn’t launch with any big announcement from the company. The service itself is only available in Boise, Idaho at the moment, and this was evidently inspired by Boise State’s football field. The company told TNW, “[The] blue football field represents just the kind of adventurous spirit we want our customers to experience every day. We will quickly be expanding to other cities, but we liked the idea of starting in a city that embraces fun.”
Rather than offering its own Groupon clone, Amazon will provide deals from other providers, and LivingSocial is just the first. Aggregation and the method/timing/location of the delivery of deals is going to keep becoming more important in this space, which makes Amazon’s decision seem pretty smart. Pascal-Emmanuel Gobry at Business Insider makes some pretty good points to this effect:
“The daily deals market is huge and Amazon needs to be there. At the same time, it’s a bit difficult to tackle. It requires a huge sales force and a presence in every state. It poses serious tax issues for Amazon. And daily deals are as much about advertising as they are about commerce, and does Amazon really want to tackle Google and Yelp and Foursquare in local advertising?”
So the aggregation route, like investing in LivingSocial, is a smart way to get intelligence, relationships, and of course money, in a huge fast-growing space without having to go all-in.
Amazon Local stores deals purchased by customers in their Your Deals section, and until the end of the year, users can reportedly earn five points for each dollar they spend at Amazon Local with the Amazon.com Rewards Visa Card. After that these customers can earn 3 points on each deal.