How Amazon's Smart Kindle-Coupon Deals Could Challenge Groupon
Amazon (AMZN) is incorporating its AmazonLocal coupon deals into its Kindle e-readers. Ads and books don't traditionally mix, but Amazon has already primed the pump to make it work. It will take full advantage of a captive audience -- something coupon competitors like Groupon can't match.
A captive (and willing) audience
The daily AmazonLocal deals will appear as screensavers on the Kindle. Leave the device idle for several minutes and the deal will pop up.
The key wrinkle here is that they'll only appear on the two Kindles with Special Offers. Priced at $114 (Wi-Fi) and $139 (3G), they are cheaper than the regular Kindles because of the ads they'll run. That means the AmazonLocal ads will automatically -- even painlessly -- target people who've already consciously opted into seeing ads on the Kindle.
Groupon and other AmazonLocal competitors have self-selecting audiences, too. But once they find a great deal, they can just as quickly opt out of the daily newsletter. Kindle with Special Offers users won't have that choice.
We've got your credit card
Amazon's got another advantage here, too, because it already has your credit card information. After all, that's how you purchase e-books. And, like Apple (APPL) iTunes, it can steer you towards other purchases without you needing to grab your wallet.
Earlier this week I was one of the million people who bought the Living Social-Whole Foods deal offering $20 of groceries for $10. However, to get the deal, I had to:
- Click on the email
- Click on the buy now button
- Log into my Living Social account
- Find my password that I had forgotten
- Update my credit card information
- Click on the buy now button again
- Wait for the email confirmation of the purchase
- Get my coupon 24 hours later
A smart move
On Tuesday, I wrote about Amazon looking into a Netflix(NFLX)-like book service. Couple that will the heavily-rumored tablet launching next month and AmazonLocal on Kindle is yet another move to expand Amazon's business reach in 2011.
Will AmazonLocal's Kindle push be enough to stop Groupon? Hard to say, but it does help Amazon get a better grip on the saturated coupon market.
Photo courtesy of Amazon
Related:
- Amazon's Netflix-Style Book Rental is Good for Publishers, Who Are Still in Denial
- Living Social Gets Buzz, But Still Needs a Business Model
- Why Apple iBooks Still Can't Compete with the Kindle
- Steamy Novels Drive E-Book Sales. No Wonder Amazon Can't Fully Ban Them!
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
