Can the Kindle Out-Deal Groupon?
I’ve been giving some thought to the implications of the still fairly new Kindle w/Special Offers as far as directed marketing goes, especially in light of the increasingly common speculation about Kindle Tablet PCs. The fact that this made such a splash, both in terms of controversy and in its success, only serves to emphasize the importance of the concept they are dealing with. It seems like Amazon is in a good position to capture the attention of huge numbers of deal seekers, and that there is some reason to believe that this is exactly their intent in the near future.
We know that people get excited about a good deal, even when it is on something they don’t necessarily need. The site Groupon has become amazingly popular recently for providing exactly this sort of deal. You sign up, log in, grab the deal of the day in your area, and likely end up making a purchase that would otherwise either have never occurred to you or been dismissed as wasteful. They basically rely on the fact that they can localize the deals to the point where hundreds of communities have something interesting going on in their area at any given time. It isn’t exactly a new concept, but it can be powerful when properly executed.
Amazon is in a position to take a swing at something like this from multiple angles at once. The most obvious approach is through the newest Kindle. You have to have an Amazon account to use it in the first place. Amazon has, as a result, potentially detailed information about the purchasing habits of just about any of these customers and can use something along the lines of their recommendation system to personalize deals to individual tastes. This is on top of the more widely ranging deal options. Already we’ve seen things like the $20 Gift Card for $10, which you can’t really go wrong with but which also guarantees Amazon a sale that might not otherwise have taken place. They also made the acquisition of popular deal of the day site Woot.com last June that offers a framework for even more impulsive buying opportunities. All of this is in addition to the Gold Box Deals, sales, and otherwise plentiful discount opportunities to be found on any given day on the Amazon.com website itself. There’s a lot going on here.
If at all possible, I expect to see this concept extended to the upcoming Kindle Tablet as part of the most basic experience of using the site, whether it focuses on media, app sales, or simply referrals. The success of such an effort would be exactly the thing to allow Amazon to undercut the competition on purchase prices without putting themselves at a disadvantage. While I don’t expect it will be nearly this amazing, I doubt anybody would mind getting the occasional special offer screensaver on their Kindle Tablet if it means that they get iPad-like functionality for less than the cost of a Nook Color.