October 26, 2014

Grumbling About Amazon

In Madison, about 80,000 fans pack the stadium (students pack it a bit after the 11:00am starting time, but whatever), paying a lot of money to attend a game that is being freely televised across the country.

Oh, I know, you're going to nitpick this, telling me it is only available on certain cable systems or satellite providers. Fine, point taken.

Have you ever looked at what it costs to purchase football tickets? Click here, it's an expensive proposition. You have to pay a "contribution fee" that is several hundred dollars, just to earn the right to purchase season tickets. That's like paying Gap $49 for the right to purchase chinos.

Then you're looking at $420 per seat, for seven home games.

What if you want to buy season tickets for you, the spouse, and for little Timmy and Gemma?
  • $420 x 4 = $1,680.
  • A $200 contribution fee, which allows you to spend the $1,680 in the first place.
  • Total = $1,880.
Or you can watch the games, at home, for free.

For free.

So why are at least 70,000 people (80,000 for conference games) filling the stadium seven times each fall? Fans could put this money to better use elsewhere, right?

Sports teams are able to get you to come to their retail channel (the stadium) to pay a lot of money for something you can do at home, for free. Obviously, the entertainment experience provides an emotional benefit greater than the cost required to obtain the emotional benefit.

Back to Amazon.

Amazon is like watching a football game on TV. It's easy. Given the choice between the customer having an easy experience on your website (or in your store), or an easy experience on Amazon, the customer will choose Amazon. Think especially about your retail store. Is the customer amazed, dazzled, sort of like when the customer walks into Cabelas or an Apple store? Or does the customer have eleven different, boring choices to buy chinos?

Be honest ... when is the last time you got an energy rush buying a t-shirt in a retail store? Or online?

So grumble about Amazon all you want. Have at it. But think carefully about the source of your grumbling. Amazon does "boring" better than almost anybody else. They've cornered the market on boring. You're not going to compete with them, they do boring better than you. 

Either you sell something Amazon doesn't sell, or you give the customer an adrenaline rush, much in the same way sports teams do. The latter is terribly hard work, it's expensive, and it has a much lower probability of success. But ask yourself what the probability of success is competing on boring?