Buy.com hunting in the Amazon: Part I

I will admit, the motivation of this article was ignorance. A few months ago I noticed a TV commercial where the CEO of Buy.com is standing on the roof of his headquarters toting Buy.com’s promotion of "10% off Amazon.com prices". I sat on my couch thinking, "done! I’ll just buy all my stuff at Buy.com from now on". However, my trick ear was acting up and I had simply misinterpreted his message – it was 10% of in-stock books, not the breadth of Buy.com’s inventory. Regardless, my confusion led me to briefly abandon my beloved Amazon, thus I’m wondering how many other people did the same.

Buy.com’s "10% off Amazon.com prices" promotion officially began on September 12th, 2005. We decided to look at traffic from January ’05 and monitor the relative growth of Amazon and Buy.com before and after the promotion began. We indexed all traffic to January ’05 levels.

In the coveted holiday months of November and December Buy.com traffic grew relatively faster compared to Amazon. Whereas Amazon only showed relative growth of 22% and 38% compared to January ’05, Buy.com exhibited growth rates of 32% and 54%, respectively.

This is not to say Buy.com overtook Amazon during last year’s holiday season. In fact, Amazon attracted 52M U.S. visitors last December, compared to only 2.8M at Buy.com. Yes, Buy.com has a long way to go before they can be considered an equal peer of Amazon’s; however their promotion appears to have yielded a small win during last year’s holiday season.

In terms of conversion rate, Buy.com’s campaign had a minimal effect. In fact, the majority of Buy.com’s conversion improvements, relative to Amazon, occurred before the campaign was launched.

To what extent has the "10% off Amazon.com prices" contributed to Buy.com resurgence? Given the ultra dynamic retail market it’s never safe to directly attribute success to a single promotion; however it’s clear the promotion has not hurt Buy.com’s performance. Immediately after launching the campaign Buy.com increased the percentage of Amazon visitors evaluating buy.com for three straight months. When Buy.com initiated the promotion in September ’05 they announced the promotion would only last four months, yet as of August 14th (11 months later) the promotion is still available and aggressively promoted on Buy.com’s homepage.

Either my curiosity or my pride has the better of me and I want to dig a little deeper on this promotion. To satisfy my curiosity Compete will interview members who have shopped at both Amazon and Buy.com and understand their intentions, motivations and attitudes between the two retailers. Stay tuned"¦.

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