Is Amazon's New Offer an Attack on Local Business?

Is Amazon's New Offer an Attack on Local Business?

Mike Tyson
Dec 9, 2011

Amazon recently announced a new plan to increase the usage of their price check app. In typical tech news fashion, the story has been making its way around the blogosphere but not everyone is singing its praises. Many people are looking critically at Amazon and claiming their most recent tactic is a veiled attempt to disrupt local stores. But is it just good business? Find out after the jump as well as how Amazon will give you free money this weekend.

Amazon is already well known for often being the cheapest in the business. It's hard to compete with their daily discounts on books and other popular offerings. But now Amazon is hoping to take it a step further with the introduction of the weekend-long Price Check reward.

All Amazon asks you to do is go to a store and scan a barcode. Simple enough, right? Doing so can get you $5 off a single product (in total 3 products allowed for a savings of up to $15). Why does Amazon want to do this? A few good reasons. First, it encourages people to download the app. The higher the app download numbers, the better it looks for Amazon. It also engages people with the application. If they haven't played with it for a while, they'll be sure to take it out this weekend and begin hunting. There is also the clear benefit of finding a better price on Amazon and ordering there. So what's the big deal?

Well some people see this as a backhanded way of undercutting physical stores (and more important, small, local business.) These smaller stores sometimes don't even have a web presence and rely entirely on their physical location. But many store owners realize just how detrimental online shopping can be to their business. People will go to the store simply to test out a product or see it person. Then they return home to buy it online.

Another aspect to this deal is the vast amount of data Amazon will likely cull from it. This is an inexpensive way to crowd source valuable information to Amazon: what is cheaper and where. But is it wrong?

We're still working that out. It leads us to questions similar to those that we have for the publishing business right now. Should people continue to buy printed material (or products in stores) simply for the novelty? No. So what makes them better? Local stores are simply going to continue to get pushed out of the market unless they can learn to co-exist along with major companies like Amazon. What can local businesses offer that Amazon cannot? Better customer service? More personalized shopping experience? So no, we don't think Amazon is in the wrong here (although they certainly have gotten a lot of negative press.) They're simply using their assets in a smart way. And besides, people don't have to price check tiny hole-in-the-wall businesses. You could price check and compare other big box retailers and hopefully create a clash of the titans.

(Image: Flickr member mackarus licensed for use by Creative Commons.)

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