Amazon offered a $20 gift card for sale through LivingSocial, a 1-day deal website, for $10. 1.35 million people grabbed the deal. People grabbed it too: more than 1.35 million of them. Analysts are saying that while the discount was steep, Amazon got more value from the buzz of the deal than it cost in the discount given. Then there is the breakage – the gift cards which are not used.Finally, Amazon recently invested in LivingSoial so they are boosting their investment.
What is interesting here is how deals are now promoted. Companies used to pay for advertising in TV and in newspapers and magazines to promote special offers. In today’s world, smart companies are using sites like LivingSocial and Groupon and their communities to drive more immediate success for their deals.
Here in Australia, deal a day sites are still in their infancy. I’d encourage newsagents to check them out. They can offer a low cost marketing opportunity.
The New York Times has published a piece offering perspective on the Amazon deal.
Mark – in the light of your recent updates on Groupon et al – I wanted to also point out there are lots of risks and it is no panacea> A friend of mine already wrote about it and I would encourage anyone interested in thsi topic to read about it – and the cartoon is funny as… http://www.drewsmarketingminute.com/2011/01/groupon-winner-or-goat.html
From the article Dennis posted
‘Can your business handle a huge influx of buyers? ‘
This was recently a problem for Groupon over new years, however they have put in measures to prevent it from happening again. Some of the deals on there (for me) are hit and miss, but other times you grab something great.
I wrote an article about Groupon a few weeks back which was given a run in Business Insider
http://www.businessinsider.com/is-groupon-the-small-business-messiah-2010-12
Interestingly, none of the Australian business media outlets were interested in running it.
While I think group buying sites are good for service businesses with excess capacity, I’m not sure how a newsagent would use it. I’d be interested in a discussion on how you’d use it.
Paul I don;t see much use for groupon by individual newsagents. The concept, however, of deal a day sites is one of which the newsagency channel needs to be aware.