Editor's note: Endless' 110% price guarantee states that if shoppers find a better deal on an item on another site within two weeks of ordering, it will credit the difference between the two prices plus an extra 10%. A previous version of this article stated otherwise. We regret the error.
For investors who fixate on Amazon.com's (NASDAQ:AMZN) profit margins, the online bookseller has done it again. It has announced an aggressive promotion for its new site, Endless, which peddles shoes, handbags, and accessories -- and this promotion does even more than provide free overnight shipping.
Through February, Amazon said it will ship orders overnight for negative $5. That's right. Shoppers can receive their orders the next day, and not only will shipping be free of charge, but $5 will be knocked off the order. It's meant to be a come-on to shoe connoisseurs who haven't experienced Endless yet.
As standard procedure, Endless offers free overnight shipping for orders placed before 7:30 p.m. ET on weekdays, as well as free returns for 365 days after a purchase. There's also a 110% price guarantee -- if shoppers find a better deal on the same item on another site within two weeks of ordering, Endless will credit the difference between the two prices and kick in an extra 10%.
Endless' standard policies, as well as this February promotion, must give a few other companies the willies. For example, Gap (NYSE:GPS) recently opened up its own online shoe store, Piperlime, and it could use a little success there, given its difficulties getting its merchandising on track in its more mature bricks-and-mortar brands. And of course there's Zappos.com, a first mover in providing shoes over the Internet with some pretty aggressive policies in its own right.
By comparison, Piperlime provides free standard shipping and returns, gets products to its customers in four to seven days, and gives users a mere 60 days to send items back. Meanwhile, Zappos.com, which bills itself as "The Web's Most Popular Shoe Store," is currently pushing free overnight shipping through Feb. 28. However, it also provides 365-day returns and 110% price protection.
So it looks as though the war is basically between Zappos and Endless for your online shoe dollars at the moment, and Amazon's made quite a gesture by knocking $5 off every order. Given its recent troubles, I'd say Gap isn't really in much of a position to do too much competitive maneuvering with Piperlime in this kind of promotional battle.
And of course, Amazon's no stranger to offering innovative deals to online shoppers in an attempt to draw them in and garner loyalty. It has long provided cut-rate shipping, and then there's Amazon Prime, through which Amazon regulars pay a yearly fee and get free and discounted shipping on all Amazon.com purchases -- although not including any items sold by third-party merchants. And I also can't help flashing back to 2004, when Amazon offered the interesting, albeit strange, "pi" discount to A9 users, Anyone who bought something on Amazon as a result of an A9 search would automatically get an additional 1.57% discount -- pi divided by two -- on their purchase. But as we now know, that token discount didn't really help A9 take on search heavyweights like Google (NASDAQ:GOOG), Yahoo! (NASDAQ:YHOO), and Microsoft (NASDAQ:MSFT).
I'm not entirely convinced that either Gap or Amazon should have gotten into online shoe sales, but I wouldn't underestimate Amazon, either. Of course, while the recent promotional discounting may be right up Amazon's alley, it also illustrates that it has serious competition to contend with. It remains to be seen whether Endless will put Amazon's best foot forward when it comes to such standalone retail sites.
For related Foolishness, see the following articles:
- Rick Munarriz examined Amazon's "Endless" possibilities.
- He also commented on Gap's move to push pumps.
Amazon.com, Gap, and Yahoo! are Motley Fool Stock Advisor recommendations. Gap has also been recommended in Motley Fool Inside Value, as has Microsoft. Check out either service free for 30 days.
Alyce Lomax does not own shares of any of the companies mentioned.
