What's a company to do with 164 million users and a desire to become a bigger player in the daily deals arena?
For Amazon, the answer is to offer $10 Amazon.com gift cards for $5.
The e-commerce giant is hoping the promotion will boost demand for its AmazonLocal daily deals service. Amazon is the fourth-largest daily deal provider in the U.S., following Groupon, LivingSocial and Travelzoo, according to Yipit, a deal aggregator that tracks the major sites.
Mark Eamer, a director of product at AmazonLocal, told All Things D that this is the first time the company has sold Amazon gift cards for 50 percent off. The one-day deal was limited to one per customer.
There's lots of competitors in this space, and we all want attention from the merchants, Eamer said in the article at All Things D. We know how to work with merchants and connect with customers. It's unique to Amazon.com.
Expanding into local service offerings makes sense for Amazon, but does it make sense for the customer? The real trick in the daily deals business is the customer's experience when visiting the merchant, restaurant or service provider, notes a payments processing expert at US Dataworks.
Amazon may provide a great experience online, but it's much more difficult to control what happens when the user goes to cash in on the deal at a retail store or beauty salon. The question is whether Amazon can add any value to this space.
Source: All Things D, March 2012