Amazon.com Inc. (NASDAQ: AMZN) has a new promotion. Order in and stream your favorite movies and TV shows all month. It combines two services offered by Amazon Prime. The hook is that food delivery is free.
Amazon’s offer is another step in competing with companies that include Netflix and Walmart. A critical advantage for Amazon is its relationships with a vast number of restaurants. These relationships allow people to order food through Amazon and get discounts and free delivery. While Netflix has a movie library that matches Amazon’s, and Walmart is often described as the most massive grocery operation in America, the new Amazon deal cannot be matched by either. And Amazon is one of the American companies with the best reputations.
The way the Amazon deal works is simple. Amazon e-mails Prime customers with the offer. People who want to use the service are asked to put in a promotion code: SPRINGFREE. Amazon uses geolocation based on the customer’s address. It then offers lists of local restaurants that can be searched by type: American cuisine, Thai, Indian, Chinese, Mexican, pizza, sushi, Japanese. Customers can essentially browse by menu. Amazon offers one more incentive. “Once the promo code is entered, your discount will automatically be applied to future orders over $20 at checkout.”
The free delivery page links the customer’s location next to a “find restaurants that delivery here” section. In some large cities, the restaurant partners number into the dozens by location. In some cases, restaurants also offer additional discounts. Amazon shows what times the delivery options are available.
While Amazon has over 100 million Prime members and a grocery business that includes Whole Foods, and it is the largest e-commerce company in America, perhaps the world, it continues to face large and growing competition. Apple has entered the streaming media business. Several other established players, like Hulu, vie with Amazon for market share. Each of these companies also has begun to invest billions of dollars in original programming to challenge what has become Amazon’s own in-house studio operation.
Can Amazon get people to watch more shows on Prime? If so, it likely reasons people who use the service most often will tend to keep it. The ability to sit and home and not leave to get food, the company reasons, is attractive. The “Get ready to order in and stream your favorite shows or movies all month with FREE delivery from Amazon Restaurants” is another chess move against a huge world of streaming media competition. For the winners, there are tens of billions of dollars in revenue at stake.