Jeff Bezos is an Evil Genius

by Cinda Baxter on December 16, 2011

in Independent Retailers, internet, Marketing, Pricing, Promotions, Real life, The 3/50 Project

Do I agree with last weekend’s Amazon scan-for-credit sale? No.

Do I think it may go down in history as one of the smartest marketing moves ever? Yup.

Jeff Bezos (CEO, knew exactly what he was doing…and he got all of us, present company included, to help him. 

By the time “scanning Saturday” rolled around, nearly every buy local, shop local, and other “local” organization had emailed me to ask for The 3/50 Project’s support in their anti-Amazon endeavors. Invitations ran the gamut: sharing our creative ideas on someone else’s website…signing multiple petitions…and literally becoming “the face of [an anti-Amazon] campaign.”

None of which I accepted.

Here are the stark facts:

1. Most folks didn’t/don’t have correct info about what, exactly, the Amazon offer included. It’s wasn’t a straight $5 off all items—it was a skimpy 10% off, up to a maximum of $5.00 per item, on a maximum of three items ordered online. Technically, the shopper could opt for that $899.99 3D flat panel TV, but they’d still only get a $5 credit.

2. The vast majority of discounted purchases made through the Amazon app added shipping costs that exceeded $5.00. This made most purchases cheaper in the store than they were through the app. The good news for brick and mortars is that they most likely got the sale; the bad news is that Amazon learned a lot about what’s hot…and on store shelves.

3. Several petitions are circulating to get the Amazon app shut down. Folks, that just ain’t gonna happen. It’s been around for a while, has produced significant revenue for Amazon, and isn’t breaking any laws. The argument that using an app to compare prices, then offer a “buy it from us” discount violates fair trade laws doesn’t hold water. Not only is it legal—the same sales tactic has been used by brick and mortar merchants for decades. Believe me, Bezos didn’t sign off on this thing without having the legal department run it through the wringer every which way but loose.

4. He did, however, hold a press conference to announce the sale, which viralized its way through countless blogs, social media sites, newspapers, radio stations, and TV newscasts talking about the scan-and-save discount…without having to pay for all that air time. We (meaning all of us who support independent brick and mortars) did it for him. We screamed. We railed. We hollered. We blogged. And we managed to keep Amazon’s name in the news loop for no fewer than seven days running. Our bad. Bezo’s win.

5. Amazon didn’t make a ton of revenue doing this. They got something far more valuable—a virtual shopping list of what consumers want. Each scanned barcode sent the online behemoth SKU numbers. Consumers who photographed or spoke the item info into the app (both of which worked if barcodes weren’t available) provided everything necessary to identify SKU numbers.

Translated? Amazon turned your customers into their secret shoppers.

What’s the solution?

Accept the facts
The app isn’t going away. Amazon isn’t going away. And Amazon doesn’t play by “Gentlemen’s Rules.” They’re predatory; your customer is their target. It’s your job to hold that customer’s attention, not Amazon’s to help you do it.

Stop inviting customers to try their app
Every time a pro-local enthusiast railed about the horrors of Amazon’s scanning special, countless consumers thought “Wow..the app must be really great or small business owners wouldn’t be so scared.” Then they downloaded it. They tried it out. They used it. And guess what’s still on their phones? Yup. The app.

Rather than continue to help Amazon build the curiosity factor, spend time talking about you, about the services you provide, the extra mile you go, and the good that comes from spending locally. Make customers feel good about their actions and you’ll become a person they want to return to.

There’s only a week of holiday shopping left. Let’s point it toward you.

Dial down the reactionary attitude
Referring to Amazon with words like “exploitation,” “warfare,” and “raping” (terms actually being used by a couple of buy local organizations) is a major turn-off. Bitter will repel, not sell. For the love of God, please stop.

Focus on a realistic goal
Amazon has a successful app…but a serious Achilles Heel: internet sales tax, which continues to gain attention on the Hill. After the holidays have passed, check out the American Booksellers Association, whose actions have had measurable impact in various states. There are a number of organizations who have joined the movement, but the ABA is far and away the leader.

Final words
That’s exactly what this post is—my final words on the Amazon scanning sale. Like other pro-local fans, I succumbed to the initial waves of anger and disbelief, giving the online behemoth yet more visibility.

So why post this at all? Because someone needs to change the subject from what we can’t do to what we can. The 3/50 Project was born from my frustration with continual negativity, replacing it with positive action instead.

Time to revisit that mindset. Who’s in?

As a footnote:
I fully expect to get flamed for this post, and fully expect one particular pro-local organization (who shall remain nameless) to use the comments section as a promotional tool for their own endeavors. As always, the usual Rules of the Road apply. If you’d like to participate in the Comments section, please keep things professional, responsible, and don’t be surprised if I resist approving blatant self-serving sales pitches. 

Nadeen Steffey December 16, 2011 at 12:58 pm

i’m in! well said, as always!

Melanie December 16, 2011 at 1:19 pm

I agree Cinda. All the hype gave them plenty of free exposure, and most people are enough like sheep to just run with what they think the rest of the flock is doing.

The answer is almost always to turn the conversation back to what we’re doing that’s special. It’s more effective to focus on what you want the customer to hear – “I have what you want and need, and I will take excellent care of you. You’re in the right place.”

Monica Roland December 16, 2011 at 1:28 pm

Great column. I have reposted it. Good luck with all your great work. (No disclosures necessary — I do NOT own a store. But I patronize many fine local shops, including bookstores.)

Lisa December 16, 2011 at 2:04 pm

We had no problems over the weekend with the Amazon deal; no customers mentioned it and I never saw anyone price checking anything. The one thing that I did find alarming was a lady at checkout told us she always shops local and that included Amazon because they sell from independent shops. Now what do you think about people thinking Amazon is local???

Marge December 16, 2011 at 2:14 pm

I said this on the 3/50 FB page, and will repeat it here. I used the app. It was extremely useful. I did NOT buy from Amazon, I bought from the local dealer. Here’s what the app had that was attractive. I saw a new product that I knew nothing about, but that looked like a good gift idea. I tried to get assistance, but the store was understaffed to handle the customer load. So, I scanned the bar code and immediately got a description of the product and a list of reviews. After doing so, I made my decision to purchase (locally). If Consumer Reports, or some other (independent) group had a similar app that would allow me to scan a bar code, get a description, and read reviews, it would have been equally as useful.

Editor’s note: This makes complete sense, and is a comment I truly appreciate. Thanks for chiming in. If only we had the financial resources to add that to our LookLocal app….

Jan Brockway December 16, 2011 at 2:55 pm

Very well-said, Cinda! Thank you for cooling the flames and making sense of it all.

Editor’s note: My pleasure, Jan. Thanks for the thumbs up. :)

Phil Wrzesinski December 16, 2011 at 6:15 pm

We actually had a reversal on Saturday. Guy came in the store, saw a wooden toy kitchen we were selling, pulled out his phone and CANCELED his Amazon order for that product right there on the spot. Walked out with one loaded in the back of his Jeep. Oh yeah… and he paid cash:-)

Sally December 16, 2011 at 6:17 pm

I agree Cinda! I never even HEARD of the Amazon app until I heard about it from other pro-local organizations. I don’t view Amazon as a threat at all. Their shipping charges + delay in getting the product + lack of personal service = great competitive differentiator for local stores!

Des Bennett December 16, 2011 at 7:41 pm

Well stated Cinda. You are one smart lady! We never mentioned or talked about this A thing and not a single customer mentioned it in our store. It was a dead issue as far as we saw it. My customers are smarter than the average consumer.

Sissy Blanchard December 16, 2011 at 8:40 pm

We’re in!! Totally ignored it and it wasn’t a problem!! Here’s to a fantastic week!!

Diane Mc December 16, 2011 at 10:44 pm

I am so in. I almost started my own rant and got half way through before I realized I was working for Amazon. I am ready to come up with our own ideas and plans.

Scott Shepardson December 17, 2011 at 12:13 pm

I have to agree with Marge. I’ve found Amazon to be a nice place to research a product I’m looking at. I’m then confident that that wonderful item I’m buying at my local retailer is just what I’m looking for. With the added benefit of actually handling and inspecting the product and leaving with it intact. I doubt that is what Mr. Bezos had in mind for his site, but, oh well.

Holly Myers December 18, 2011 at 12:17 pm

I continue to believe that this will effect “Big Box” the most. After waiting for over 1 hour in a “Big Box” store on Friday, Amazon came to mind. I waited until I could be helped with my purchase and then left the store loving independently
owned business even more! It’s “Big Box” that better get their service in line. As Independents we are already there, just keep loving your customers and I believe their loyalty will stay with you! So Pick 3. Spend 50. And save your community 3 stores at a time.

Scott Heiser January 8, 2012 at 8:35 pm

This article, and many more, are the reason I totally support the 3/50 Project. Although I am not a retailer or store owner, I work closely with the local small businesses in my home town and shop local even when the price is a little higher than the big-box stores. Customer service is the most important influencer for me. You have great lessons to teach and our local proprietors have many lessons to learn so I will continue to push them to participate in the 3/50 Project and no other ‘shop local’ organizations (as most of them have become self-serving.)

Cinda Baxter January 10, 2012 at 11:37 am

Thanks, Scott H., for the kudos. Guess all those years owning an independent brick and mortar (stationery and gift) served me well.

To this day, the most level heads I know are those who have invested at least part of their adult lives “behind the counter” as the holder of the company checkbook. Best MBA program in the world.

(Thanks to Scott S. too—someone whose opinion I’ve respected for years.)

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