Is Amazon's Price Checking App A Threat To Small Businesses?
A garden retailer raised the alarm about the new app on Fresh Air Forum. Business author Laurie Brown explains why she thinks the retailer is right to be concerned.
December 13, 2011
Amazon raised hackles of small business owners across the country when it encouraged shoppers to download its new price-checking app and to head out to local stores to scan prices from Friday to Saturday night (Dec. 9 – 10).
“Of course, stores have long encouraged shoppers to snoop on competitors, and rewarded them for doing so. Amazon has just found an extraordinarily efficient way, one befitting its behemoth status, to do it,” Robb Mandelbaum wrote in The New York Times.
Garden retailer Donna Kutil had an even stronger reaction. “Get ready for a new level of evil,” she wrote on Today’s Garden Center’s Fresh Air Forum. After explaining last weekend’s planned promotion, she stakes out exactly why she is worried: “Not only will this hurt small businesses that can't compete with big box prices, but it will also add to Amazon's growing level of intelligence on what their customers want to buy.”
For its part, an Amazon spokesperson told the New York Times Mandelbaum that the new app is not really designed for small local stores. Rather, she said it is “primarily intended for customers who are comparing prices in major retail chain stores.”
We asked business consultant Laurie Brown, author of “The Greet Your Customer Manual,” to weigh in on the issue.
TGC: What exactly worries you about the new app?
BROWN: I worry that with the use of this app that all purchase decisions will come down to lowest price. Consumers, with money being tight, do want to make smart buying decisions. But a smart decision is not only based on money. Let’s take a garden center, for example. Perhaps I can buy my plant food on Amazon and save a couple of dollars. Fine and dandy. But, how can I take a leaf that has some burning or bugs and show it to the folks at Amazon and have them analyze and prescribe a solution? You can’t.
So, my concern is that if people only choose lower price, they will, in essence, kill off the place they go to when they need help.
TGC: How widely do you believe the new app will be used?
BROWN: I truly don’t know how widely it will be used. I think with money being tight consumers feel that they need to seek the lowest price.
TGC: What do you think the long term affect will be?
BROWN: My worst fear is that small garden centers will go under.
How can they combat that? Education.
I think that small businesses need to fight back and let consumers know what they get when they purchase from them. (i.e., local hires, knowledgeable staff, personalized attention, knowledge of the community, etc.) I guess a business might want to offer a price match to anything found on Amazon... but I think that is the wrong way to go.