Amazon breaking into Discount Coupons

Groupon gets another discount coupon competitor…one with chops.

When talks with Google went down the drain, Google decided to offer Google Offers.  Not to be left in the dust, it seems Amazon also wants to get into the online coupon craze by introducing

AmazonLocal offering 50% Off

AmazonLocal offering 50% Off

AmazonLocal.  Basically, it runs like Groupon by promising discounts at a minimum of 50% for a limited time for restaurants, spas and other businesses.  Markets are currently limited to Seattle and Boise so AmazonLocal may not be available in your market today, but the expectation is new markets will be added in the coming months.

Amazon and LivingSocial

You may not be aware that in 2010, Amazon invested $175 million in LivingSocial, a privately held company.  It seems Amazon will act as an aggregator of daily discount coupons while Living Social is listed as the seller.  But, Amazon’s plans are to begin offer direct deals in the future leaving it unclear how this will impact LivingSocial.  This would suggest LivingSocial is being morphed into AmazonLocal, but maybe not.

Amazon Advantages

Amazon has significant and unique advantages over other Groupon-like discount coupon companies.  Here are a few Amazon features on its site:

~ an established customer base with 120 million active customers

~ Per comScore MediaMetrix, March 2011, Amazon customers are trained to purchase online and do so by spending seven times  more money online every month than the average Internet user and $55 billion in offline purchases every month.

~ Amazon has great brand recognition and a strong reputation as reported by Forbes.com’s study “2011’s Most Reputable Companies“.

~ Amazon customers will be able to use their Amazon account to shop on AmazonLocal

Bottom Line

Discounter Beware!  If you’ve seen any of my previous posts about these discount coupons from Groupon, this warning shouldn’t come as a surprise.  My reasons are simple.  These discounts cost small businesses too much, attract the wrong type of people (the majority will never return) and can dangerously erode the image of the brand.

But, if you absolutely, positively have convinced yourself  your business can’t live another minute without  giving away the store through a discount coupon campaign, Amazon may be a good option.  Just remember, you were made aware of the negative impacts of offering these discounts.  Beware!

Sheila Hibbard

Sheila Hibbard takes the fluff, hype and confusion out of marketing and social media. She provides small business owners with straight forward, no nonsense marketing guidance and techniques that produce results based on her 35 plus years in advertising, communications, research, strategic planning and social media. Author of Marketing Online Made Simple - WHO.

More Posts - Website - Twitter - LinkedIn - Google Plus

Posted in Marketing Lessons, Retail, Small Business and tagged , , .

Leave a Reply

Your email address will not be published. Required fields are marked *