Amazon Fire Phone: Why Retail Businesses Better Take Notice and Strengthen Their Customer Relationships

Yesterday, Amazon unveiled it’s newest innovation and product – the Fire Phone smartphone.  With cool features including holographic images, hands-free scrolling and software that can recognize items viewed through the camera lens, this smartphone looks like an amped up version of those that exist on the market today. But appearances can be deceiving – and retail businesses need to take notice. This smartphone is much more than just a phone with cool tools. It’s a mobile shopping assistant and cash register rolled into one and it’s on the prowl and your customer is it’s next target!

So here’s how it works. Amazon’s Fire Phone employs Firefly technology, which allows you to use the phones camera as a scanner to recognize merchandise, signs, music and television shows, 100 million cataloged items that users can buy. Basically, I can walk into a store with my Fire Phone, scan an item and FireFly will find the item and advise me where I can buy it and at what price. I can then purchase it automatically through whichever vendor (possibly – or most likely –  Amazon) I choose.  While FireFly isn’t designed to be used solely as a commerce application (you can also point the camera at a painting and learn more about the artist or other relevant information), it’s more than likely that this is the reason that Amazon has decided to jump into the very difficult, and competitive world of smartphones.

For the small business retailer, this is a huge disruption in the universe and one that you’ll need to step up and notice. Why? Well – let’s play out the scenario. You’re a small retail electronics store. A customer walks in looking for a flat screen television and finds the make and model that they want. They whip out their Fire Phone, scan the UPC on the television and within seconds they see it listed on Amazon for $999. You sell it for $1299. Now the customer can do one of two things:

1. In one click, the customer can buy the item and check out on Amazon – getting the item shipped to them for FREE with delivery in 24 – 48 hours with the one-year complimentary membership to the Amazon Prime program that came with their Fire Phone. (Amazon Prime has already single-handedly boosted overall sales and frequency of purchases over non-Prime customers). The customer then goes home and simply waits for the item to come to their door.

OR

2. The customer can choose to pay $300 more, track down an associate at your store, tell them the model they want to buy, purchase that at the counter and then wait for the stock associate to bring it out front. The customer can then get the television out to their car and load it (I hope they don’t have a Mini-Cooper or Fiat!) and head home for a night of watching World Cup Soccer.

What would you do?

If you noticed, there is one major component that plays into the customers decision. Most of you probably think it’s price, but you’d be wrong. According to Accenture Global Customer Satisfaction Report, price is not the main reason for customer churn, it is actually due to the overall poor quality of customer service.That’s right – customer service!

Many say that customer service is dead in this country, and maybe that explains why a power house like Amazon, that exists beyond our reach and physical interaction, is dominating in sales of everyday items while traditional retailers across the country are closing their doors at alarming rates. So here exists the golden opportunity for all small retailers with their doors still open- providing GREAT customer service! No – not just good customer service or okay customer service – GREAT (or if you are a New Englander like me – WICKED AWESOME) customer service!

Here’s something else that small retailers should take note of: The probability of selling to an existing customer is 60 – 70%, while the probability of selling to a new prospect is 5 – 20%. This means that your time is better spent on strengthening your existing relationships than trying to find new ones. Here’s three quick ways you can do that:

1. Get to know your customers better. By knowing who your customers are – their birthday, what products they buy, etc.  – you can customize marketing campaigns that make them feel special and send a message that you care that they are your customer. This goes a long way in creating customer loyalty.

2. Create a customer loyalty program. Creating a customer loyalty program will further strengthen your relationship and the customers connection to your brand.

3. Hold VIP Customer Events. Whether it’s once a quarter or once a year, hold a special ‘by invitation only’ event for your customers to come into the store when it’s not open to anyone else. Let them meet you, your employees and share more about what your business is. This will go far to building a lasting relationship with them!

If these tips aren’t enough, check out a previous article on 5 Ways You Can Treat Special Customers Special and Increase Sales.

So, while the new Fire Phone from Amazon might seem like an immediate threat, you have the tools and knowledge to ward off the giant and protect your piece of the pie. Recognizing your current customers and providing them with an experience that makes them feel warm and cozy and leaving with a smile might be all it takes to keep the doors open and come out victorious.

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Carolyn Crummey is a business and technology strategist and the owner of VirTasktic (www.virtasktic.com), an agency dedicated to providing high-level virtual services to small businesses and entrepreneurs. A lover of technology and small business, Carolyn has built a career on the intelligent use of technology to increase business efficiency and productivity, which ultimately leads to greater profitability. Carolyn works closely with her clients to understand their challenges and helps them integrate the best technology solutions into their businesses so they too can enjoy great successes. You can follow Carolyn on Twitter at @CarolynCrummey or @VirTasktic.

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