Amazon Local

Marketplace for local deals
Amazon Cemetery
GENERAL INFORMATION
Category:
e-Commerce
Started:
2011
BUSINESS FAILURE
Cause:
Unprofitable
Closed:
2015

Description

Amazon Local was an application and website launched by Amazon in August 2012. The service sold spa, restaurant, and entertainment deals based on users’ locations.

This was Amazon’s foray into the daily deals market back when it was a lucrative business. Amazon also partly owned a popular Washington-based daily deals company called LivingSocial that was quite similar to Amazon Local.

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Cause of Failure

In 2015, Amazon Local’s homepage displayed a message by Amazon stating that it would be closing the website and app as of December 18, 2015. The statement given by the Amazon spokesperson at the time was quite vague and explained that Amazon had “learned a lot from the daily deals business” and looked forward to applying these lessons more innovatively in the future.

The closure didn’t come as a surprise as the once-lucrative daily deals business had started to lose steam. This was proved when Amazon Local’s counterpart LivingSocial laid off 200 people and declared that it was moving away from the daily deals model and shifting its focus to experiences instead. Another popular daily deals platform, Groupon, also announced layoffs for 1,100 employees costing it $35 million and closed operations in many markets around the world. It is highly likely that Amazon Local was not generating enough profit for the company as it wasn’t even users’ go-to option to shop for daily deals.

While Amazon was closing its main daily deals platform, it still promised to offer some deals through its main website including its Deal of the Day, Gold Box Deals, and Kindle Daily Deals. In addition to that, Amazon did not completely exit the local commerce market and still offers Amazon home services.

Apart from Amazon Local, another initiative by Amazon, called Amazon Destinations, was also affected by their decision to exit the daily deals business.

References

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