By December 8, 2011 0 Comments Read More →

Amazon vs Retailers: No Christmas Cheer

Amazon is running a 24 hour trial this weekend (12/10) that has retailers upset. The trial uses the Amazon application “Price Check” and offers a $5 discount based off the Amazon Price as an incentive for consumers to share in-store advertised prices with them. At issue is how many consumers will choose to purchase steer their decisions to Amazon based on the $5 discount and 6-10% sales tax avoidance? Likely very few. Amazon price check app is not new and there are similar apps like Red Laser that consumers use to price shop.

I suspect in the short-term, that the anxiety here is not based on business metrics and more about the emotions about Amazon making such an overt move right in the middle of the holiday shopping season. In the long-term, initiatives like this may help provide some insights to the key issue: Will brick and mortar stores evolve to become the showrooms for mobile purchases?

My advice: Retailers should be extending their online and brick and mortar channels with mobile apps. By taking control of the channel, including discounts and coupons, the retailer is likely to raise the average spend / shopper and keep them coming back. Even if the lift isn’t much in the short-term, its good, inexpensive insurance, and the retailer can learn from the consumer business intelligence that can be collected.

Amazon’s deal is shown here:

Here’s a statement that the Retail Industry Leaders Association’s Katherine Lugar issued today about the promotion

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