Almost all shoppers, 90 percent, will compare your shop’s prices against Amazon, according to a survey by BloomReach.
55 percent of shoppers will start their search on Amazon, and a full 90 percent will end up there eventually, before making a purchase. Astounding.
More car audio dealers tell us they assume a customer has shopped Amazon when he walks through the door and many larger car audio stores are prepared to match Amazon’s prices.
What’s more, matching Amazon’s prices may not be enough. The web giant’s customer service is so strong and its reach so vast that some larger retailers feel they must be cheaper than Amazon to compete. BloomReach estimates 94 percent of consumers plan to shop on Amazon over the holidays, according to its survey in September.
“The new thing is you are not just fighting about price anymore, you’re fighting convenience. [Shoppers] want to stay in their boxer shorts and shop and I haven’t seen any people in boxer shorts in my stores. That’s what we’re fighting against. Sometimes I feel obligated to be cheaper than Amazon,” said Mark D’Elia, VP of Operations at Sound FX, RI.
To fight back, many larger car audio shops have switched to a model of selling radios and some popular amplifier and subwoofers at a discount and then selling accessories and labor at full price.
Al & Ed’s Autosound, CA has been price matching Amazon for years. The three highest grossing stores in the chain, are those that aggressively price match. And they are also the most profitable, said Product Manager John Haynes.
He led a seminar on competing against Amazon at KnowledgeFest this summer. “Millennials, given the choice, will buy online,” he said. So retailers should confront the Amazon elephant in the room. “Raise your labor rates and meet the customer head on, and match Amazon.” He suggests even putting a sign in the window that says “We match Amazon.” But the strategy doesn’t work unless you are willing to get the price for labor your techs deserve.
Foss Audio & Tint, WA won’t lose a deal to Amazon. Salesmen explain the store provides an extended warranty and soldered and heat shrunk wiring connections on the install. “If that’s worth something to them we usually come to a deal. So if an Amazon product cost $150 we may agree on a price of $200,” said Jay Small.
Most retailers said they are not seeing more customers walking in with Amazon product to install. And most said the number of customers who want you to match Amazon’s price is still small. Although one retailer said it’s as high as 25 percent of his customers.
D’Elia said, “I learned from a very successful retailer to do whatever you can to sell the radio and make money back on the labor and accessories. And have your push lines in amplifiers and speakers, but as far as the radio is concerned, sell them and do whatever you can to sell them.”
The same is true in TVs (which Sound FX also sells). “Everyone is always so concerned about the price of the TV and no one cares about the speakers and amplifiers. But they are super concerned about the price of the TV. If you, in their minds, overcharge them by $25 you hear about it.” In car stereo, customers are most concerned about the radio price, “Everyone always shops the radio so you’d be crazy to try to get more money there. In today’s world, it doesn’t work.”