Tag Archives: daily deal

Amazon to Offer $10 Gift Card for $5 Next Week

Amazon will use a two-for-one gift card offer next week to get consumers to check out AmazonLocal, its daily deals service.

On Tuesday, March 20, Amazon will let consumers buy a $10 gift card for $5. The catch: They have to go to amazonlocal.com to redeem it. The card is good for any Amazon merchandise, though. The retailer is limiting buys to one per customer.

Mike George, vice president of AmazonLocal, says the promotion is the most high-profile yet for the service, which launched last June in Boise, Idaho. AmazonLocal is now in 90 locations in 26 states and Washington, D.C.

Though others, including Facebook, have backed out of the daily deals category after it seemed to cool off last year, George says Amazon is applying its experience in the online retail space to the segment. “Some of our customers have up to a 17-year relationship with us,” he says. “Our job is to make sure they can make really informed purchase decisions.”

AmazonLocal isn’t the retailer’s only competitor in daily deals. Amazon has a stake in LivingSocial, the number two player in the category, next to Groupon. Last year, Amazon lent its considerable heft to LivingSocial for a similar deal, offering a $20 Amazon gift card for $10. LivingSocial sold more than 1 million of the vouchers and greatly increased its visibility.

That offer came after Groupon partnered with Gap in August 2010 for a deal that offered $50 in merchandise for $25.

Original Article

Are Daily Deals Upping the Ante?

Daily deal juggernauts Groupon and LivingSocial have received some harsh criticism in the past year from angry business owners who have had nearly fatal experiences running daily deals, as well as from critics who feel the services do not promote loyalty among customers.

The daily deal scene blew up a couple years ago, with hundreds of Groupon imitators flooding the market. However, 1/3 of all daily deal sites shut down operations in 2011, finding that they simply don’t stand a chance amongst the sea of established competitors.

In response to the scoffs and sneers they have received, Groupon and LivingSocial have rolled out new programs to help establish loyalty and ensure customer retention.

Last October, Groupon launched Groupon Rewards to offer incentives for businesses’ most loyal subscribers. Now, the company is offering Groupon VIP to consumers in select markets—a paid loyalty program that gives shoppers a sneak peek at exclusive deals and the ability to request a refund for unused vouchers for $30 a month.

Similarly, Groupon’s rival LivingSocial also introduced Plus last November, where users pay $20 a month to receive access to closed deals. LivingSocial disclosed that it had a $558 million net loss in 2011, which could be a reason why it’s testing out the waters with a paid loyalty service.

The good news for these daily deal operators is that the numbers are looking up. According to a report from ForeSee, 44 percent of consumers who use daily deals return to the merchants that provide the offers and 47 percent plan to do so in the future.

The report suggests that daily deals may be on their way to becoming a service that brings in new business and inspires repeat business.

However, the question regarding the practicality of these paid loyalty programs is this:

If Groupon and LivingSocial save its best deals for its most loyal and paying customers, will that diminish the value of the “regular” deals? Is that a viable business strategy?

What do you think?

[Article first published as Are Daily Deals Upping the Ante? on Technorati].

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