If the only discernable difference between you and Amazon is the sales tax, you never had a chance in the first place.

If the only discernable difference between you and Amazon is the sales tax, you never had a chance in the first place.
Tags: Consumer Behavior, Marketing, Multichannel Retailing
January 3, 2012

The recent launch of Amazon's price check app was greeted with everything from retailer outrage to government sabre rattling! Some even called it evil! Really? An app...evil?

In case you missed it, to commemorate the launch of the app, Amazon offered consumers up to $15.00 off their purchases if they used the app to price check items in local stores, before ultimately buying the same items on Amazon. So, Amazon gets the pricing data and the sale, the consumer gets the discounts and the goods and the local retailers gets the pleasure of being the not-for-profit showroom.

As you can imagine, this caused an uproar. Retailers, industry associations and even a U.S. Senator joined the appeal for Amazon to halt the promotion. Some felt Amazon was preying unnecessarily on brick and mortar retailers when they could least afford it – during the holiday sales run up.

Many cited Amazon's "unfair advantage" on pricing. I'll grant you, the playing field isn't perfectly level. Amazon's exclusion from having to charge sales tax makes it tough on their brick and mortar rivals but that isn't exactly a new situation. Online retailers have never been required to charge sales tax in states where they have no substantial physical presence.

If the only discernable difference between you and Amazon is the sales tax, you never had a chance in the first place.

Among the new rules of retail, there's one that's ironclad. If your products, services and/or overall customer experience are not so substantially different from Amazon's that you defy direct comparison, your life expectancy is limited. And there's no level of outrage, complaining or Senatorial intervention that will change that. In fact, Amazon won't be your only worry – every competitor is potentially lethal when you lack any notable competitive differentiation.

And if you really don't like Amazon's price check app, brace yourself. As smart phone sales continue to grow exponentially, more and more consumers are going to be wielding the likes of Google Shopper, Red Laser and a host of other apps aimed at directing consumers to the best possible price – and all other things being equal, they'll take it. The best retailers will focus relentlessly on ensuring that that all other things are in fact, NOT equal.

It's just this simple: Differentiate or die.