All about Technology: Amazon Local closure will force small businesses to rethink daily deals

Friday, 30 October 2015

Amazon Local closure will force small businesses to rethink daily deals

Small business owners looking to entice new customers through deals and discounts will soon have one less option to market themselves. Amazon announced that it will shutter its Amazon Local service starting December 18.

The move is unsurprising given that Amazon Local competitors have not fared well. Groupon announced it would lay off 1,100 employees last month and LivingSocial announced this month that it is trimming its workforce by 20% as it moves away from deals.

"From October 30, 2015 until December 18, 2015, you can continue to purchase deals at Amazon Local as usual," Amazon announced on its website. "All purchased vouchers will not be affected by this change and remain valid according to their terms."

What this means for small businesses

As deal hosting companies like Amazon Local, LivingSocial and Groupon change their business models, small businesses will also have to evolve the way they market to consumers.

LivingSocial, for example, is changing its focus to delivering experiences to customers.

"We've learned a great deal from the daily deals business and will look for ways to apply these lessons in the future as we continue to innovate on behalf of our customers and merchants," an Amazon spokesperson told TechCrunch.

Amazon's new direction with local commerce seems to be around partnering with local merchants rather than highlighting individual businesses. For example, Amazon Home Services allows customers to choose and hire a local repairman that's part of the Amazon network, and Amazon is working with local restaurants for food delivery through Amazon Prime Now.

Amazon is also working on expanding the availability of its same-day Amazon Prime delivery service, which means the company will be competing more directly against local merchants. If you're a business that sells goods on Amazon, the e-commerce giant still offers platform-wide deals through its Deal of the Day and Gold Box Deals.

There are still opportunities for small businesses to promote, but new business models from Amazon and LivingSocial may be less centered on discounts, and more about quality service, like a local pizzeria offering fast delivery through the Amazon Prime Now network.