Recently, the people at Amazon.com launched a mobile app called Price Check, allowing anyone to use the camera on a web-enabled phone to scan a barcode, and then the app scours Amazon’s site for that product, letting you compare prices. This news should be entirely unremarkable given how long this technology, and others like it, have already existed. Not only that, but other longstanding barcode scanner apps, such as RedLaser and ShopSavvy, will search a wide array of online merchants, not just Amazon.
Quite simply, this isn’t news – rather, it’s something else entirely: PR. Egads, we’ve been hoodwinked again, this time by Amazon marketers who cleverly repackaged something you already had, and sold it to you again with extra glitter and some hot fudge topping. No need to fear though, because it’s a technology thing, and technology things change really fast, so by the time I finish writing this, it could all shift again. The more time we worry about what’s already happened, the less likely we are to spend time actually thinking about what’s about to happen next. That, right there, is the important bit. You can stop reading now if you like.
It’s worth noting that the fans on this particular PR flame were powered in part by the company I work for, and specifically by our President, Mike Sinyard, in a letter he wrote to all Specialized dealers in the USA alerting them to this technology – but not for the reason you might think. Mike was letting dealers know that if products they carried from other brands were also available through Amazon, either directly or indirectly, that this meant their shops were becoming showrooms for these online sales channels of other retailers. This is absolutely true, and has been true for some time. Specialized has a long (and at times imperfect) history of selling only through independent retailers, and the logic is that if a retailer elects to only sell products that are available in other independent retailers, you’re unlikely to lose the sale to an undercutting online competitor. If you haven’t seen the letter, you can read it (and some related commentary) here.
Bike shops, along with many other retailers, are vulnerable to this brave new world where information symmetry between retailer and customer is coming into ever-sharper focus. People buy stuff online for all kinds of reasons: convenience, geography, selection, less pressure, online reviews, and for sure, price. And even within a trusted retail environment, it’s pretty reasonable to use a smartphone to check online reviews, whether of the product or of the retailer you’re in, and yes, to compare prices.
Back to Mike’s point: by carrying brands that Amazon doesn’t sell, bike shops (and other retailers) are ‘defended’, which is true to a point. They’re certainly better off than bike shops who sell products widely available online at deep discounts. But this defensive strategy only goes so far. If I walk in looking for new bike tires, and I can pay $NUM for brand X tire that I quickly learn is not available online anywhere, then sure, I might feel confident in my purchase. But imagine what will happen when Amazon (or any other similar app) gets smart enough to suggest a comparable tire from brand Y that *is* available online, for 30% off, and it has 17 reviews that are all 5 star, and 8 of those reviews are from riders who live within 100 miles of me. Eventually, information symmetry will mean this: every retailer is competing not just with retailers that also sell the same products, but also with retailers who sell products that are ‘comparable’ in terms of whatever the salient metrics might be: performance, weight, color, style, size, material…anything. Everything.
That’s the piece that I think seems to be missing, and that’s where I think this will end up: retailers (bicycle and otherwise) are not just competing with on price. They’re competing in a pair of landscapes: one of “same product for $NUM less”, as well as a parallel landscape of “comparable-or-better product for $NUM, now on sale!”. A customer’s ability to cross reference products as being comparable has never been more powerful, but we’re only seeing the start of this trend: through something as simple as a google search, or as advanced as aggregated user-generated reviews and feedback, cross-brand comparisons will become common. Just look at the comparison sites that level the field for TV’s, cameras, and computers. This means that retailers will need more than just a brand amazon doesn’t sell. Unless they’re comfortable being a high-volume, low-margin retailer that can survive by operating at large scale, then retailers should probably be looking to combine four things:
1. Trusted and respected brands that are effectively controlled online – perhaps unavailable, but more likely: just consistently priced & presented.
2. Products that are, in the eyes of customers, incomparable with others once they’ve committed to a favorite (think: perfume).
3. Perfect, individualized customer service.
And lastly, but most crucially,
4. A digital strategy that accepts, and supports, the reality of sales channel agnosticism. Customers don’t see much difference between buying in store and buying online anymore, and that’s only going to become more true. Related: did you know that Ebay is the world’s largest car dealership?
I think, in general, this is all good for customers right now, and eventually it will be good for many bike shops. If we can reduce the intimidation factor in bike shops by empowering people with information, buying a bike gets less scary, and (maybe) we get more people willing to go into a bike shop instead of relying on the comfortable anonymity of a Walmart or Costco. Years ago, car dealers bemoaned their fate when people could walk in having already researched the invoice price of a car that was on their showroom floor. Today, buying a car is less intimidating, and the brands and dealerships that offer great service and an integrated online/offline sales channel are thriving. That better service and seamless sales experience creates reviews, social buzz, and endorsements. It’s a virtuous cycle, as long as you’re on the right side of it from the customer’s perspective. Just ask Apple, they’ll tell you.
So retailers need to assume customers know everything – that’s the information symmetry in full effect. Many times, people will willingly pay more for something when the purchase experience is as good as the ownership experience. And seriously, and speaking as a customer myself: if you try to prevent me from scanning a bar code in your store, I will assume you have something to hide. Instead, try treating it as an invitation to a conversation, and an admission that I’m actually considering buying that product, and not “just looking, thanks.”