Retailers: Customers Trust Amazon Price Checker, Can You?

December 14, 2011

Imagine going to a baseball game; say the Yankees. (Ok so I'm a fan.)

Jeter hits a bases-loaded home run.

As he crosses home plate they credit Posada for the game-winning homer.

You'd look baffled as you had just seen Jeter hit it out of the park and round the bases - and Posada happened to be off that night and wasn't even in the stadium.

That analogy works when talking about how Amazon Is Looking to Turn Every Store Into Its Showroom.

While Amazon has always had an app, coupled with their free shipping, no tax in many states and reputation to carry about everything, they can snatch your customer away just as they decide to buy.

Amazon says the app is to, "compare prices instantly with and its merchants while on-the-go." Like trust us, we're just making shopping easier for everyone.

But it's gaining them access to your retail customers, have them shop on their smartphone once they know what they want and have them leave your store empty-handed.

No borders.
Jeez, we used to avoid radios playing in stores in the off-chance a competitor's ad might be heard. Now there are no borders and why some retailers feel such smartphone apps are trespassing.

Some pundits say this is the future as customers are choosing to use mobile and that you must develop your own (expensive) ways to connect to them. I'll get to that in a moment...

Several mobile fans have taken to telling retailers to just "accept it." Like this woman, the associate editor on Mobile Commerce Daily.

Such comments seem naive at best.

While bookstores are leading the news on this, there is a greater danger to premium retailers with higher priced name brand products.

Imagine... your #1 best electronics salesperson (your Jeter) is waiting on a customer for a system for his house. The commissioned salesperson takes about an hour to describe how it all goes together and what is needed.

At the moment the customer says, "I'll take it," he whips out his smartphone and says, "Let me just check Amazon."

The woman in the clip above would have you believe the employee should then embrace the customer using his smartphone and get him to switch to the retailer's app or mobile site.

Be serious.

The price the customer finds on Amazon is the price they will say is "fair." Regardless that Amazon has no showroom overhead, CAM charges, etc as part of their pricing.

At that moment, the employee is thrown into a situation to either accept the price or walk the guy.

Why this is so bad for luxury brands
Most luxury brands have strict policies on who can sell their products and who can't. A quick mobile search can deliver off-price, unauthorized reseller's prices. Now the salesperson is forced to try to discredit the mobile site.

The number one reason a sale is lost is the lack of trust.
The customer will trust their smartphone more than a knowledgeable salesperson because we've so vilified the profession. This could result in customers who might have a problem with an online product who go into an authorized luxury dealer only to find out it is not covered by the manufacturer. Again a potential struggle ensues because they believe the "overpriced" retailer is just being difficult.

Customers will say they have a right to it.
Of course, they have the best of both worlds right now - free advice from knowledgeable salespeople and low prices.

Except businesses only exist to make a profit. A retailer risks knowing what products will sell by investing their hard-earned money - no matter the size - into real estate to show off the products. Some are best-sellers; most are not. They invest in employees to deliver a great experience. They spend money with other businesses as well. The risks they take are rewarded with profitable purchases that allow them to reinvest.

Disruptive retailing is the new norm from Amazon to Groupon and more.
They seem to be able to get your all for their business. It's not a future that builds wealth for retailers but redirects it to a few.

And that employee, the #1 salesperson? How long will he be on the floor if he is not rewarded for his skills?

I'll have more thoughts on the Amazon assault in a subsequent post. In the meantime, have you read my Manifesto: Bricks and Mortar Retail at Risk in the Digital Age?


If you'd like some help with anticipating and meeting these challenges in 2012, especially in regards to your retail sales training or marketing efforts, please contact me.

What say you?
Do you trust the Amazon app? Do you ignore it? Have you had to deal with it with customers? Please enter your comments below...

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