Business
11:00 am
Tue December 27, 2011

Big Technology A Threat To Small Businesses?

Originally published on Tue December 27, 2011 11:15 am

Transcript

MICHEL MARTIN, HOST:

We're going to switch gears now and talk about the intersection of technology and retail. A recent Amazon.com promotion urged customers shopping in so-called brick and mortar stores to use its price check app. By scanning a bar code in the store, Amazon would give the customer a 5 percent discount, up to five dollars. Though only a small savings, the incident left a lot of local retailers, especially bookstore owners, pretty upset.

They say the tactic turns their store into a mere showroom while persuading shoppers to purchase online. One small shop owner struck back with an online petition that has received more than 11,000 signatures and a lot of publicity.

Here to tell us more about this is the woman who started that petition, Jasmine Johnson, whose grandparents started Marcus Books in San Francisco. Also with us, Omar Gallaga, who covers technology culture for the Austin American-Statesman in Austin, Texas.

Welcome to you both and happy holidays to you both.

JASMINE JOHNSON: Thank you for having me.

MARTIN: Now, Jasmine, I understand that this was a one-day promotion by Amazon.com and it didn't even apply to books. So what made you so upset?

JOHNSON: This is very true. What made me so upset in reading about the promotion, which I read earlier in December in an article on Gawker.com that was Amazon Launches Christmas Attack on Local Shops, and what really aggravated and upset me was the principle of incentivizing folks to go into local brick and mortar stores and to essentially document and survey their stock and encourage those customers to leave empty handed. Right? So it was a very explicit way to pay folks to not support, you know, small retailers in a particularly difficult economic moment.

I thought that the promotion was mean, for lack of a better word, and unnecessary, really.

MARTIN: OK. Well, that states the case. Omar, what about you? From a technology perspective, I'm curious about how this struck you because a lot of stores - big box stores, for example - encourage customers to price compare and they say, we'll match or beat whatever price you see elsewhere. Bring us a newspaper ad, for example. So is this really any different?

OMAR GALLAGA: Not really. I mean, I think what Amazon is doing is arming customers with information. You know, this is the price in the brick and mortar store. This is what we offer.

I think what really got people upset was that extra $5 and it was actually $15. You could do up to three items that way, so it was actually quite a bit more than just the one item. So I think that's what struck people. I think it seems a little shady. You don't really have to be a bookstore owner or a retail owner of a local store to see that that's - it just seems a little weird. It seems very aggressive on Amazon's part.

MARTIN: Well, you also were telling us earlier that it's almost as if Amazon was asking customers to do reconnaissance and gather price data for the online retailer. Do you think that that was their real motivation?

GALLAGA: I think Amazon's motivation was more to get people to try this app, to get people used to it. This was actually a separate app spun off from its original Amazon retail app where you could buy things directly. And I think it was a way to get people to kind of early adopt it, to kind of try it out and see what it can do and really get some traction for it. And it was also released earlier this month with enough time for people to get, you know, the cheapest shipping through Amazon.

MARTIN: That's technology writer, Omar Gallaga, and we're also speaking with Jasmine Johnson, who launched an online petition against the selling tactics she felt would harm the San Francisco Bay's family-owned bookstore started by her grandparents.

Now, Jasmine, though, technology, it would seem has already made inroads, particularly in the book selling business, although Amazon sells other things, you know, as well. Do you really think that this would make that big of a deal? Or what was it you think was a step too far? Because don't people already do that? Kind of say, oh, well, you know, I could get this, but I'll go there and they go to the bookstore for other things. Maybe conversation, for example, or they go for the store owner's recommendations, for example.

I mean, do you really think this would make that much of a difference?

JOHNSON: I do. And really, you know, I don't think any bookseller is anti-technology. Really, it's not the application that is the problem. The problem is the promotion and paying people to not shop locally. That's the rub. So, of course, technology has made huge inroads into the book industry, you know, in terms of pads and eBooks and, you know, the whole sort of things that are available online.

You know, we're not anti-that at all. I'm an academic. I read for a living. Right? But I do think that there's a way that we can still be open to new innovations in technology and also be thoughtful about our purchasing power. Right? Being delivered about shopping at those stores that we see as valuable because, when you're buying a book on Amazon, you're not buying community. But when you go into a local store, you're participating in a culture of learning and that's something that you can never get on Amazon.

MARTIN: So is it not just the discount because people already experience a discount often when they buy, particularly bestsellers. Is it that the additional five dollars seemed a step too far? Or was it the fact that this discount would apply, perhaps, to the kind of less popular books that aren't perhaps typically featured on Amazon? Was that the step too far, that you get this kind of immediate gratification? Or, Jasmine, what do you think?

JOHNSON: Well, I think that the step too far is nuanced. I think it's certainly about paying people. Right? It's about incentivizing, collecting data from other bookstores. It's about collecting that data explicitly. It's about Amazon not taking responsibility for that promotion. In fact, I have not been able to find any record or trail of it.

It is about, you know, mostly, though, encouraging folks to be more thoughtful about the things that we get when we shop locally, which is about a culture of learning, but it's also about a local tax base. It's about employing people in your community. It's about putting money into your space to develop it for the future and, you know, in the state of California, Amazon does not pay taxes. I know that it will next year, but it has done so begrudgingly and I think we need to think about that, also.

MARTIN: As I mentioned, we did reach out to Amazon for a statement, as you would imagine. I just want to tell you what they said. This is the statement that they sent us. I'll read it.

Amazon helps more than two million small businesses and individuals expand their reach beyond their hometowns to 150 million customers around the world. This year, almost 40 percent of the items purchased by Amazon customers were sold by these small businesses and independent sellers. The one-day promotion you're referring to specifically excluded books. We will continue to work together with small businesses in all product categories to lower prices for customers.

So, Jasmine, I'll get your response and, Omar, I certainly want to hear what you have to say. So, Jasmine, you first. What's your response to that?

JOHNSON: I understand that. I also understand that the promotion didn't apply to books, but I'm not necessarily speaking on behalf of book owners. I'm speaking on behalf of owners of small independent businesses and I know very well that Amazon does provide a platform where smaller local businesses can, you know, sell their merchandise to broader audiences. I am not against that at all.

What I'm saying most strongly is that there is a value in putting our bodies into businesses and supporting them. Amazon does not offer free author readings. They cannot recommend you something based on what you say you like and not based on your previous clicks and purchases. Right? Those are things that we get from shopping at institutions.

MARTIN: Omar, your response to that?

GALLAGA: Yeah. And I think, also, that the tax issue that you brought up is interesting because I think the vast majority of Amazon shoppers still don't pay taxes on their purchases. And the other thing that struck me is the timing of it. This is the time of the year when retailers are making their biggest push, when they're really betting the most on their discounts and getting people into stores and the timing of the introduction of this app and the promotion seems especially hurtful.

MARTIN: So, Jasmine, how do you feel about the - you only have 30 seconds left. How do you feel about the response you got to your online petition and how do your folks feel about what you've tried to do here?

JOHNSON: I think it's been wonderful. Seeing how many people have joined the campaign on Change.org has been really remarkable and I think it's even better that folks are going into local shops deliberately after seeing it and deciding to put their money there. I think it's a great, great thing.

MARTIN: Jasmine Johnson is the granddaughter of the founders of the independent bookstore, Marcus Books in San Francisco. She was kind enough to join us from our bureau in New York.

Omar Gallaga covers technology culture for the Austin American-Statesman and he joined us from member station KUT in Austin.

I thank you both so much for speaking to us and Happy New Year. Happy reading, however you read.

JOHNSON: Thanks for having us.

GALLAGA: Thank you so much. Happy New Year.

(SOUNDBITE OF MUSIC)

MARTIN: Coming up, we'll talk about the most powerful moms of 2011. On a list this year, a first lady, a ground-breaking CEO and a woman known for her comedic chops.

TINA FEY: First, Lord, no tattoos. May neither the shiny symbol for truth nor Winnie the Pooh holding the FSU logo stain her tender haunches.

MARTIN: In a moment, we'll talk with our powerful moms about comedian Tina Fey and others who made the list compiled by Working Mother media group. That's coming up on TELL ME MORE from NPR News. I'm Michel Martin.

(SOUNDBITE OF MUSIC)

MARTIN: Many movies have taken on the trials of adolescence, but now a new film by a standout young director tells the story of what it's like to be young, black and lesbian.

DEE REES: It's not cool or OK to be gay, like there are still challenges that these kids have to go through.

MARTIN: Writer and director Dee Rees is with us to tell us about her talked about new film, "Pariah." That's next time on TELL ME MORE.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.

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