Amazon Local $5 for $10 Gift Card Deal Analysis

What a wild ride today! Amazon Local just set a record for the second fastest selling Daily Deal since the industry inception in October 2008 [Correction: LivingSocial's Whole Foods deal reached 1M in 14 hours]. Their deal was $5 for a $10 giftcard which ultimately sold-out at 1 million units sold. It took them 17 hours, 12 minutes. Their slowest hour saw 10,038 deals sold (2am-3am) and the fastest hour was 162,490 deals sold (7am-8am).

Recap and interactive chart is available at: Savvr Analytics Real-Time

What does this mean for Amazon Local?

This deal was designed to grow their subscriber base. Analyzing Groupon’s data and general industry trends, the price for a daily deal subscriber is around $5 per person. Amazon not only paid that amount but they also acquired substantially more valuable subscribers: Customers who are known to make purchases online and now these customers can place 1-click orders as well. These subscribers are substantially more valuable than a regular list subscription that may never materialize into a buying customer.

Amazon Local’s History

Since they launched, their highest revenue deal was Gourmet Steak which sold $806,800 worth of deals. Their largest deal by quantity sold was for Fresh Flowers which sold 27,135 deals.

This chart shows AmazonLocal’s weekly revenue. Recently they see around $1.2M per week. They just made $5M in 17 hours today.

Amazon Local Weekly Revenue

What will the future hold for Amazon Local? Only time will tell but with an influx of new subscribers, they definitely have a lot of opportunities to sell more deals. We will be keeping a close eye on their performance in the upcoming weeks and have a follow-up post to see exactly what happens. Will this deal be a one time thing, or forever change their business model?

Just for fun, here’s the same chart as above after today’s deal:

Amazon Local Weekly Revenue - After

We will be keeping a close eye on Amazon Local. If you want to do the same, be sure to try out our free beta of Savvr Analytics