By Jordan Crook
Amazon (NASDAQ:AMZN) recently built a price-check app that has left many brick-and-mortar retailers frustrated. The idea isn’t revolutionary at all — many companies use price-checking as a way to beat the competition at the point of purchase — but with Amazon being an online presence, the idea becomes much more cut-throat. That said, retailers are asking customers to boycott Amazon as the new price-check app threatens their holiday sales.
You see, Amazon can already sell goods at lower prices than most retailers. Their costs of operations are simply lower. By offering a 5 percent discount on any product scanned at a retail location, Amazon is making it almost impossible for those retailers to land a sale, even though they already have the customer in the store.
At the same time, Amazon’s gotta do what Amazon’s gotta do. The only real flaw in Amazon’s business model is the fact that the customer never gets to play around with their desired product. By using brick-and-mortar stores as showrooms, Amazon effectively squashes that problem while undercutting the competition. As far as Amazon and the consumer are concerned, it’s a win-win. The only real loser are the brick-and-mortar stores who simply can’t compete with Amazon’s discounted prices.
According to a piece in the Huffington Post, there seems to be quite a bit of overreacting going down.
Store manager of Oakland-based Diesel, A Bookstore John Stich has been handing out buttons with “Occupy Amazon” emblazoned on them. (Is it just me, or are people just slapping the word occupy on anything these days?) Here’s what Stich had to say:
When we see shoppers taking pictures with their phones or using the app, we won’t go so far as to be rude or ask them to leave, but sometimes we’ll be sarcastic about it, and ask them, “Hey, what’s that app? How cool!” I think the only thing you can do is make people aware.
Yes, making people feel uncomfortable about saving money in a recession is a great way to notify them that you’re threatened by this Amazon deal. It’s not great customer service, but you win some and you lose some I guess.
Compared to some of the other responses, Stich’s is actually quite mild. America’s Bookseller Association CEO wrote an open letter to Amazon in which he stated that this offer is “the latest in a series of steps to expand your market at the expense of cities and towns nationwide, stripping them of their unique character and the financial wherewithal to pay for essential needs like schools, fire and police departments, and libraries.”
Um, what? I was on board with the whole “expand your market” bit, as that’s the purpose of every company in the history of Capitalism. But the bit about cities and towns nationwide being stripped of financial wherewithal, thus destroying the financial basis for schools and emergency services? Yeah, that lost me.
Then there’s David Didriksen, president of Willow Books & Cafe in Massachusetts. He called the deal “another in a long series of predatory practices by Amazon. You would think that a company of that size would be willing to just live and let live for small retailers who can’t possibly affect them. But, no, they want it all.”
Am I the only one completely shocked by statements like this? Since when, in the history of all time, has a company ever said, “No, we’ve got plenty of market share. Let’s just chill for a bit.” That’s not how business works. If Amazon can offer to offer a discount on products and pull you out of a competitors’ store, why wouldn’t they?
Fight fire with fire is what I say, and Third Street Books in Oregon agrees with me. The book seller has offered a deal of its own, offering 15 percent off of their purchase on Saturday, along with a gift certificate valued at $5. There’s a catch, though. You must prove that you’ve cancelled your Amazon account.
It’s a strong, confident idea and one I’m sure will pay off for the small bookseller, though it’s pretty far reaching. For one, nothing stops the user from making a new account the second they walk out of the store. Secondly, Amazon sells way more items than books, so it doesn’t make a whole lot of sense in terms of direct competition but it’s the survival of the fittest, am I right?