Amazon Tests Catalog, Restaurant Listings

Amazon.com (Nasdaq: AMZN) is testing two new features -- catalog merchant pages and restaurant listings -- in an effort to generate additional revenue and drive more traffic to its Web site.

The services, introduced last week, give catalog companies and restaurateurs a chance to catch the eyes of Amazon's more than 29 million customers, according to company spokesperson Carrie Peters.

Home and Business

The catalog pages encompass both consumer and professional products. Companies such as Cartier and Lighting By Hammerworks can use Amazon's service to post electronic versions of their print catalogs on Amazon, and customers can call the retailers' 800 numbers to place orders.

"We also feature catalogs that offer industrial, scientific and medical supplies because these types of products aren't necessarily easy to find online," Peters told the E-Commerce Times.

The service currently is free to both vendors and visitors. Peters declined to comment on how long the trial period will last or whether Amazon plans to charge catalog merchants if the service continues. However, analysts predicted that fees eventually will be an integral part of Amazon's strategy.

All About Revenue

Generating more revenue is especially important now that Amazon is lowering its book prices. Last month, the e-tail giant announced a 30 percent discount on most books priced above US$15.

"The relationship with catalogs is a win-win situation," Yankee Group analyst Paul Ritter told the E-Commerce Times. "It can generate additional revenue for the catalog companies because of the 29 million Amazon customers, and it can generate significant revenues for Amazon in a way that adds to gross margins."

While Amazon is helping catalog companies benefit from the convenience of an online presence, the company also has struck deals with brick-and-mortar chains in an effort to benefit from an in-store presence. Amazon customers can pick up orders at Borders Books, for example, or electronics from Circuit City (NYSE: CC).

Fighting for Domination

Earlier this year, Amazon also launched its Wedding Registry, hoping to attract engaged couples and their entourage of family and friends. At the registry site, visitors can purchase products from well-recognized brands, including Pfaltzgraff and Cuisinart.

These moves are all part of the ongoing battle for e-tail dominance among Amazon, eBay (Nasdaq: EBAY) and Yahoo. Could Amazon's latest schemes push the Seattle, Washington-based e-commerce giant into the lead? Ritter said such plans represent steps in the right direction.

Market researchers measure leadership in this space based on such metrics as number of visitors, number of repeat customers and transaction volumes. Analysts said the new relationships Amazon has forged with catalog companies could add to any or all of these metrics.

Hungry for More

But Amazon is hungrier than ever; and perhaps that explains the company's unexpected move into restaurant listings.

The restaurant listing service is being tested in Seattle, Boston, San Francisco, New York and Chicago. Visitors can view menus from area restaurants online, read customer reviews and make reservations by phone.

Ritter called Amazon's foray into this niche "experimental."

"Not every product that can be sold online should be sold online," said Ritter. "The same thing with restaurant listings. If it's just to drive additional traffic, it may not pan out to be the best strategy for them. Updating menus can be a real headache."

For Amazon, this initiative goes back to the old analogy of a corner grocer with limited inventory who serves customers by pointing them to a nearby retailer that carries the product they need.

"If you can't find it on our site, then we want you to be able to find it easily and in a way you are familiar with," Peters said.