Will Free Pizza Delivery Be the End of Amazon?

Retail's boldest stab at Amazon.com's (Nasdaq: AMZN  ) Prime member loyalty program wants to know if you'd like some boneless wings with your pizza.

GSI Commerce's (Nasdaq: GSIC  ) ShopRunner is teaming up with Domino's Pizza (NYSE: DPZ  ) to include free delivery of web-based orders as a perk, hoping to stir interest in its subsidized shipping service.

ShopRunner was introduced just before last year's telltale holiday shopping season. It's identical to Amazon's club in that it offers free two-day shipping at Prime's $79 a year price point. However, while Amazon's deals are limited to its growing warehoused inventory, ShopRunner represents a collection of largely familiar brick-and-mortar chains.

There are more than three dozen active retailers in the program including Toys "R" Us, PetSmart (Nasdaq: PETM  ) , GNC, and RadioShack (NYSE: RSH  ) . More are on the way.

Taking on Amazon and its millions of Prime subscribers won't be easy, but at least ShopRunner is creatively trying.

This month's promo is tied to Domino's. ShopRunner subscribers will not have to pay the chain's modest delivery fee for orders placed through the pizzeria's website. Domino's is also promoting free 30-day trial subscriptions to ShopRunner and giving away three grand prizes of free pizzas for a year.

Couch potatoes will argue that Amazon's recent push to include streaming of a limited digital catalog as a benefit for Prime subscribers at no additional cost may be greater than saving a couple of bucks on pizza delivery fees, but ShopRunner isn't backing down.

Will ShopRunner dent Prime's base? I doubt it. If anything, ShopRunner will expand the audience, since its appeal will rest primarily with shoppers who already frequent the participating merchants.

This move may actually have a deeper impact in the pizza niche -- as Papa John's (Nasdaq: PZZA  ) and Yum! Brands' (NYSE: YUM  ) Pizza Hut weigh their delivery pricing if free Dominos.com deliveries take off -- than it does on web-based retail.

Either way, ShopRunner isn't going down without a fight -- or the chance to send a Domino's driver to your door for free.

Can ShopRunner make a dent in Amazon's Prime model? Share your thoughts in the comment box below.

Amazon.com and PetSmart are Motley Fool Stock Advisor selections. The Fool owns shares of and has written puts on Papa John's International. The Fool owns shares of Domino's Pizza, RadioShack, and Yum! Brands. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Rick Munarriz has been shopping online for about as long as Amazon.com has been in business. He does not own shares in any of the stocks in this article. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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  • Report this Comment On April 20, 2011, at 3:01 PM, ripper94 wrote:

    Domino's Pizza ?? so maybe this will help those part of the country who do not know what good Pizza is.. Boston and Prob NY and Chicago wont be using this service anytime soon.

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