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What Are Amazon's Real Intentions With Local Register? Carnage Suggests ShopKeep

This article is more than 9 years old.

Update - Amazon PR contacted me and had the following statement to make with regards the alleged data aggregation from Local Register:

Please note that all data from Amazon Local Register customers is securely protected and walled, it will not be used for any purpose other than fraud protection and risk management for Amazon Local Register.

Amazon announced this week its Local Register product and many commentators suggested that this was hugely impactful on Square. Local Register consists of a free application and a $10 card reader (although that cost can be ignored since Amazon gives customers an immediate $10 transaction credit).

In its usual style, Amazon is competing on price, charging merchants a mere 1.75% per swipe on both debit and credit transactions. That rate is a full 1% lower than Square’s rate.

There has been much written about the impact upon Square and the other payment providers, but little attention to what that means for the broader industry.

An email today from point of sale vendor ShopKeep aims to clarify those impacts on businesses. ShopKeep co-CEO Jason Richelson believes that Amazon’s true intention is to decimate customers and that, rather than enabling them to compete, this is really the continuation of an ongoing theme for Amazon.

The key thing here is that whatever a small business is selling, chances are that Amazon sells it themselves, only cheaper. Amazon Local Register becomes a massive data capturing exercise which then helps it to market its own products. Given this fact, Richelson suggests (bearing in mind, of course, that Amazon’s retail forays also threaten his own point of sale business), any small business owner taking advantage of Amazon Register is creating unnecessary competition for itself.

Dear Small Business Retailer,

Amazon is not your friend. Yes, you love their low prices and how they know what you want before you want it. But imagine if Amazon opened a shop right next door to you. They would destroy your business!

Today, Amazon announced their new product, Amazon Local Register. This is a Trojan horse they want you to put into your store so that Amazon can learn everything about your customers and your business. They are doing this, of course, to put you out of business.

Amazon is a ruthless competitor and they will stop at nothing to own all of the retail world. But you, the small business retailer, have something that Amazon does not have and never will.

You have a smiling face that greets the customer when they come in and helps them find what they are looking for. It is that personal relationship that you have with your customers that will win in the end. Servicing your customers well is the most important part of success in retail.

Of course the difficulty here is that Amazon Local Register delivers a lot of utility for small businesses. Sure they can deploy their own cloud-based point of sale, and tie it in with their payment processor of choice. But there are significant time and efficiency gains to be made from an integrated solution. Add to that the fact that solutions like Amazon Local Register save money on the usual processing fees, and things become more complex.

Small businesses can’t and shouldn’t try to compete on price. They compete by providing better service, knowing their customer and offering the personal experience that Amazon never can.

While Richelson raises some valid points, he does so from a position of self-interest and fails to point out the ways that small retailers can reduce the threat of behemoths like Amazon. Personalization, service, small-town friendliness, those are all ways to break out from under the shadow of the monsters.

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