Groupon and eBay Launch So-Called Anti-Amazon Promotions
In what many saw as strike-backs against Amazon’s controversial promotion that rewarded consumers for using its mobile app to compare prices in-store and then buy online, both Groupon and eBay have recently launched offers that drove shoppers to stores.
On Dec. 6, Amazon set off a firestorm after announcing a one-day promotion tied to its mobile Price Check app. Consumers who used the app on Dec. 10 to scan select products in store and then purchased those products from Amazon received a discount of up to $5.
Many retailers complained that Amazon was only using their stores as a showroom, with some calling for a boycott. Senator Olympia Snowe, a Maine Republican, called the promotion "an attack on Main Street businesses that employ workers in our communities." In an op-ed piece in the New York Times, Pulitzer Prize-winning author Richard Russo concluded that, "Lawful or not, it’s an example of Amazon’s bare-knuckles approach."
By comparison, both Groupon’s and eBay’s promotions declared their support for local businesses and local communities.
The Buy Local from Groupon promotion gave customers $10.00 in Groupon bucks if they purchased any of the site’s daily deals in a physical store. The deal was introduced Monday and sold out by Tuesday after the 150,000 sign-up limit had been reached.
"We think it’s unfortunate that there’s this meme that people believe they have to make a difficult choice between supporting local businesses and great price," Rich Williams, Groupon’s senior vice president of global marketing, told the Wall Street Journal. "Groupon is further proof that you don’t have to make those decisions."
The deal came as Groupon is building up its "merchant productivity" tools for local retailers. For instance, Groupon Scheduler, introduced Dec. 6, enables consumers to instantly book appointments online with a local merchant, avoiding having to call or email. Those include all appointments; not just those associated with Groupon.
In a similar manner, eBay launched its own brick-and-mortar promotion on December 16. Participating retailers — Toys ‘R’ Us, Dick’s Sporting Goods and Aeropostale — gave customers $10 in in-store credit if they bought $100 worth of merchandise from the respective retailer’s websites. EBay’s GSI Commerce unit helps run the e-commerce operations of these stores.
EBay is "trying to be the anti-Amazon in a sense," Colin Sebastian, an analyst at Robert W. Baird & Co., told Bloomberg News. The company is "positioning itself as a partner with traditional retailers, whereas Amazon is trying to accelerate that shift away from stores."
- Groupon Launches Anti-Amazon Promotion of Sorts – The Wall Street Journal
- Groupon: Defender of Main Street?
- Groupon Announces Groupon Scheduler, Easy To Use Appointment Management – Groupon
- Al’s Emporium: Info-Age Shoplifting – Wall Street Journal
- eBay Rewards Online Shoppers With $10 to Spend In-Store This Holiday – eBay
- Amazon Price-Check App Is Attack on Small Stores, Snowe Says – Bloomberg News/San Francisco Chronicle
- ABA Responds to Amazon App Promo – bookweb.org
- Amazons Jungle Logic – Amazon
- For Amazon, Lashes and Backlashes – New York Times
Discussion Questions
Discussion questions: What do you think of Groupon’s and eBay’s local-retailer promotions? Which one will likely benefit more from such retail-traffic driving campaigns? Is there a backlash against Amazon emerging?
This kind of competition and innovation is what will help e-commerce and m-commerce become even more mainstream, and it’s great that new ways are being found to connect the virtual and physical shopping environments. Customers only want the best price and a backlash against Amazon for helping them save money is unlikely — consumer loyalty to store brands is essentially dead, and retailers have themselves to blame.
That’s fantastic! Long live capitalism! I was a little put off by the Amazon’s app myself. What irked me is Amazon’s claim that they did it for the benefits of customers. If that were true, they would also have highlighted whenever a product was in fact higher priced than an in-store product (and would have directed the would-be buyer to the local store). That would have been reciprocal, fair and truly to the benefits of customers. Of course they didn’t do that. They wanted to do this for customers only when it served their interest. That’s why I found the app predatory and essentially unethical (and a PR fiasco for the Amazon brand. Talk about damaging the brand with overly aggressive predatory tactics.). I am glad other online businesses are responding and I will definitely take a look at eBay before shopping at Amazon next time.
There may be a backlash against Amazon by the elite writers, but the public loves it, as evidenced by its record sales. Last I checked, Dick’s, TRU and Aeropostale are national chains, not local retailers. It’s a competitive world out there. Amazon played to its strengths with the promotion of its price comparison app, and retailers (both big and small) need to play to theirs.
Seems like a lot of sturm and drang over a practice that has been in place for a long time, namely looking at the product in the stores and then buying on line. All Amazon did was streamline the practice with some nifty software. No surprise there, they’ve been doing this for years.
What’s interesting is the response — more and larger markdowns. Perhaps having products that Amazon didn’t carry and/or being in-stock to provide instant gratification and/or having an exceptional customer experience would make the challenge moot.
If you’re going to compete strictly on price on broadly distributed products, you should expect this. As far as a backlash, who’s lashing back? The customer is getting a better deal.
Local retailers will always be fighting the giants with apps and algorithms. I’m not happy Amazon did what they did with their app, but I still shop there, pay for my Prime membership and happily enjoy the conveniences it offers.
On the other side of that spectrum, I’m also a huge fan of very local retail. I’m glad to see they are using traffic generating tactics but I hope it’s not at the expense of profits. If they’re savvy about buying into specific merchandise to use as a loss leader, at least they’ll have a fighting chance to stay alive in this crazy retail marketplace!
Happy Holidays everyone from Shopper Annie.
Amazon is merely guiding consumers to test the waters on finding added value. Select consumers, who are comfortable shopping in this manner, will appreciate the savings they may experience.
Politicians like Olympia “the Regulator” Snow are off base on this issue. She would perhaps disqualify QR codes, comparative price shopping, ordering online, etc. Let the marketplace move forward, and the overall marketplace will grow.
If there’s a backlash against Amazon, it will be from the retailers only. I don’t think consumers will care enough to react. However, the Groupon and eBay promotions will strike a chord with consumers and retailers. Building in-store traffic fosters the connection between consumers and the retailer. Seeing the crowds on Fifth Avenue during the Christmas shopping season makes me believe that consumers still enjoy and will be grateful for opportunities to buy in stores.
Software is going to devour the retail world we are used to.
As much as many commentators laud their creativity, Amazon’s price checker isn’t the same as shopping in-store and comparing online; it appears at the moment the customer thinks, “I’ll take it.”
That’s why Amazon is a huge threat to retail like I covered recently. The joke will be if NRF awards them “Retailer of the Year” in a couple weeks.
Holding Groupon up as a model of local resources to combat Amazon is astounding.
Sorry, retail isn’t all about the customer — it’s about being a profitable business first.
If anything, you have to appreciate when one company can benefit and get free PR from their competitors’ perceived misstep.
There could be an Amazon backlash, but not with the average consumer. I know a lot of retailers were unhappy with the Price Check app promotion, but then again, these people were unhappy with Amazon to begin with. This will be a non-story in another week.
I’m concerned that once again, consumers are focused on price and discounts, rather than choosing to buy in-store rather than online. Yes, such endeavor may drive traffic in the short run, but consumers may switch back to price comparison as soon as they walk out.
This seems like a news angle more than a trend. Groupon and eBay are being opportunistic by positioning their small business offerings as a defense against Amazon.
Neither Groupon nor eBay (especially GSI, which serves large retailers) are in business to thwart Amazon and save Main Street. It’s convenient that Amazon’s Price Check app appears to threaten local businesses. But the real business opportunity for Groupon and eBay is 18MM+ small businesses seeing the yellow pages dry up and trying to play digital catchup with the larger sophisticated chains.
Groupon is playing Microsoft’s game, imitating the online services of smaller internet companies and launching knockoffs under a single brand. Groupon Scheduler co-opts DemandForce, Groupon Now co-opts ScoutMob. Eventually the services will be bundled in a suite like Office. As Groupon and eBay grow large enough, they will ultimately face their own backlash.
Unless Groupon can create more sustainable economics, it isn’t the answer here. But eBay’s move is much more intriguing. Amazon is going to keep pushing, which gives eBay room to create powerful partnerships with retailers defending their own turf. If eBay can help retailers better articulate the value proposition of their physical stores during online interactions, that could be a winning model.