Despite regular tales of the daily deals market tanking it seems to stumble upon in varying degrees of health. So it was interesting to read today that Amazon are to launch a UK version of their daily deals site. The service, called Amazon Local, will be rolled out in London, and email users with a daily deal that they can subscribe to, with extra points awarded if they do so via their Amazon credit card.
All of which got me thinking what the rational behind Amazon launching such a service was. From a merchants perspective the obvious appeal of signing up with a daily deal site is that you get x number of certain customers for £x each. You either work out the sums so that you make a profit from that initial sale (which seems rare) or you hope to convert these bargain hunters into regular customers (again, this seems rare).
So what does Amazon bring to this that Groupon doesn’t? On the surface I can’t really think of anything except the obvious brand and the reach that comes with it. Unless they’re offering merchants a better deal though I can’t see them being any more attractive than Groupon et al.
That is of course if they persist with the traditional daily deal model. For I can see there being a use for this kind of social shopping model on Amazon that would be attractive to retailers, and that’s in helping them to clear excess inventory.
If Amazon could offer their retail partners a service whereby shoppers could buy products at a discount providing x number of other shoppers agreed to do likewise, it could provide retailers with a nice way of shifting stock that was previously hard to shift.
Suffice to say I doubt this would benefit Amazon themselves so much as their stock management already seems very lean and so I doubt they have much excess stock to sell off, but for smaller retailers that aren’t so finely tuned it could be a nice chance to utilise Amazon’s brand and sheer size.
It doesn’t seem that revolutionary an idea so maybe Amazon have already mulled it over and decided that isn’t something that would work, but I really can’t see why there’s a need for yet another daily deals site in a market that already seems overstocked.
I suppose it will be a case of watching that space.