Local Business Can Compete with Amazon

Amazon’s $5 Deal

Perhaps you’ve heard the story about Amazon dispatching an army of smartphone wielding shoppers, enticed by $5 and discounts on items.  Shoppers go to local retailers to scan products with Amazon’s Mobile App, see that they get a better deal on Amazon and walk out of the store empty handed and the promise of $5.

I’ve heard phrases such ‘retailers are becoming showrooms for the online marketplace’.

The story though, doesn’t have to be about how Amazon is killing local brick and mortar, it can be about how local brick and mortar can adapt to online competition.

I’m one of those buyers

I’ve done something similar recently, where I went to a local music shop to look at Ukuleles.  The price on Amazon was nearly $15 cheaper.  I went to the owner of the store and presented him with the price and an opportunity to match it, he made a quick phone call to his distributor then turned to me and said, “I just can’t do it, I’m sorry.”

There I was, standing across from the owner and the guys who do the repairs on instruments in a store that has been there for years.  There was the Ukulele in front of me and even though he was certain I would walk away, I laid down my card, bought it and was home and playing in an hour.

I bought it because of the relationship, service after the sale and my desire to have it that day.

Applying Daily Deals Thinking

Another familiar story is the rapid growth of the daily deals industry and t’s industry leader Groupon.

Many Small Businesses have been more than willing to jump on this opportunity, offer a 50% discount, and pay 40% of the sale to Groupon for the promise of increased foot traffic and new customers who will buy more and return later.  This is the key to the success of those promotions.

If this is a successful model for local business, then….

Launch a campaign that takes on the Amazon shoppers directly

Why not use the energy effort and promotional resources of Amazon’s multi-million dollar campaign to your advantage and apply calculations that you’re already considering investing in a daily deal promotion.

As a small business with little to no marketing budget, there is an opportunity to leverage the publicity that this story is getting and swing the doors wide open to the Amazon Scanner Army.

Here’s a sketch:

Announce to the world that you invite all Amazon scanners to your business.  Contact local news outlets who are always hungry for a unique story to get the word out.  This is leveraging the publicity with your own twist.

Welcome the scanners and the foot traffic.

Ask customers to scan whatever items they would like and present it to you for the opportunity to match the price.

Match the price when you can, be honest when you can’t.

Wow them with personal service and provide the instant gratification of getting the product THAT DAY.

Not everyone of those customers will be a win, but neither is the daily deal you’ve been thinking about.

Write a new storyline

We hear it everyday.

“Local Business can’t compete”

“Local Business is dying”

“Your neighbor is losing her job because we shop online”

and my favorite; “Every time you One-click Buy, a puppy dies”

Alright, I made that one up.

There are alternatives.  There are opportunities.  There are new story lines to be written and the first line is:

Local business can compete.

Comments

  1. Derek Barney says:

    Well said Robert! Rather than crossing your arms and saying the pool is to cold, jump in and make some waves of your own. Small towns like my local town of Exeter, NH should get all the retail shops together and get them to harness the messaging to compete with a smile.

  2. @Derek You just named the new role of local Chambers of Commerce that must emerge in areas like Exeter. Oh, and hello from Maine, neighbor.

  3. I don’t like puppies anyway. :)
    (just kidding – and as always, well said.)

  4. @Emily, thank you and thanks for stopping by. If it were kittens, local retailers would suffer greatly from all my clicking. ; )

  5. Great post, Rob. I hadn’t thought much about this before now. I scan in the store a lot and often find it cheaper on Amazon. That’s about the only place I look and buy.

    Something interesting happened last week though. I had giftcards to Amazon to the tune of $200 (thanks to frequent flier miles), so we started Christmas shopping.

    Later, we were in a store and found we greatly overpaid on 3 items, to the tune of about $45. We actually went through the hassle of shipping those items back to Amazon and paying $7 for the shipping, then bought the same items in the local store.

    Lots to think through here. I love giving the local guys the opportunity to price match, though it’s sometimes hard for them to beat the deals that Amazon is getting.

  6. Justin –

    I completely agree that it isn’t going to be easy for them to match (taxes, etc) and that they will sometimes lose the sale on price.

    I do think that by welcoming the tech and being more open, it offers an opportunity to engage in a conversation and build relationship. At that point, I (as a buyer) am much more likely to think about spending the extra 5 or 10 dollars.

    The retailer may also be able to match or beat on one item and have to hold firm on the other two or three. There are all sorts of creative ways to get the sale, once the customer is there and I think being open and honest about it will go a long way.

    Thanks for the comment.

  7. Well said and played! This is a struggle for many of my clients and I think it’s time they face it head on!

  8. Thank you, Dani.

  9. My FLGS has a deal to foster customer loyalty; the customer cards. He takes a business card and writes on the back how much you spent and the date. Once you reach the 1st benchmark, you get 10% off. The next benchmark is 15%, the next is 20% and the final is 20% for life. At the year anniversary of your first purchase, he’ll take the total, half it and start your discount from there.

    Because of that and his willingness to order and make recommendations, I always order and buy from him first.

  10. Arlene -

    Wow, that seems so much more engaging than a typical “punch card” approach. It demonstrates to you and to the owner the investment that you are making in the store and in the relationship.

    Thanks for sharing that and for stopping by.

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