Living Social offers $20 Amazon gift card for $10
A better marketing promotion could not be conceived.
Amazon just invested $175 million in Living Social, a Groupon competitor. After today, you won’t need to add that qualifier.
This is genius. A $10 acquisition cost is a steal for an email/mobile services site. Plus, the $10 could even be positioned as a loss-leader for Amazon who will reap a bit of revenue during a slow season by customers who take on a few more items to counter shipping costs. Then there’s the PR value, which Living Social is deeply in need of given Groupon’s momentum and IPO chatter.
Further, for $10 Amazon has created an explicit link between Living Social and Amazon users. If the deal is picked up by a majority of users, how long do you think it will take them to shift Living Social to Amazon’s payment platform. Plus, with Amazon’s existing consumer data they could unload not local deals but relevant deals through the LS network. Their warehouses will never have a pile of unsellable goods again.
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