In its second-largest acquisition, Amazon buys the company for $970 million.
With a big assist from LivingSocial, the world’s largest online retailer launches AmazonLocal.
A day after Groupon filed its initial public offering, Amazon.com, not to be outdone, has attached its name to a daily-deal service called AmazonLocal.
AmazonLocal deals are available only in Boise, ID, for now. The new venture represents a deepening of the relationship between Amazon and daily-deal provider LivingSocial. While marketed as AmazonLocal and doing business as AmazonLocal LLC, the new service’s deal pages and checkout pages list LivingSocial as the seller. Amazon, the No. 1 e-retailer according to Internet Retailer’s Top 500 Guide, last year invested $175 million in LivingSocial.
LivingSocial is helping Amazon source some local deals in Boise and will continue to do so as AmazonLocal expands to other markets, a LivingSocial spokeswoman says. “AmazonLocal will be quickly expanding to other cities and LivingSocial is happy to assist in bringing together Amazon’s millions of customers with the thousands of local merchants that LivingSocial has direct and ongoing relationships with,” she says.
Consumers who click to buy an AmazonLocal deal are asked to create an Amazon account or log into their existing one. For existing Amazon.com customers who store credit card information with the e-retailer, their payment card information is provided.
The deals offered today by LivingSocial in the Boise market are different than the deal offered on AmazonLocal, a 52% discount on go-kart racing. The AmazonLocal offer is listed as available for purchase for two days.
The AmazonLocal page for merchants says Amazon has more than 120 million active customers and that it will e-mail customers in the merchant’s area every day with an offer, and that a merchant’s business will be marketed “front and center with the Amazon brand.” It also says a merchant pays only a referral fee for customers the merchant acquires through an offer. It is unclear whether the merchant pays based on the number of vouchers sold or the number of vouchers redeemed. Amazon.com did not immediately return calls for comment.
Local retailers may find value in associating themselves with the Amazon brand. Marketing and branding firm Interbrand ranks Amazon.com as No. 1 most-valuable online-only retail brand in the United States this year, and as the No. 9 most valuable retail brand overall in its Best Retail Brands 2011 Report. It estimates Amazon.com’s brand value is $9.65 billion. The calculation is based on Amazon’s financial performance, the role the Amazon brand plays in a consumer’s decision to purchase, and brand strength based on the retailer’s ability to secure the delivery of future earnings.