’s Imminent Take-Off

By the time you read this, will have been open for business to the public for several hours now, and reviews will undoubtedly be pouring in. Hopefully consumers will view the site more favorably than Amazon’s #PrimeDayFail – though this does perhaps explain the timing, if not the execution of Amazon’s promotional day. I’ve fielded a lot of questions about’s pricing strategy, so now that the rubber is literally on the road, I thought I’d go over the two aspects of the company’s pricing strategy that intrigue me the most.

The first is’s blatant discounts-for-data offers. I was never able to get my preview invite to work (it’s okay – I honestly didn’t try that hard), but from everything I’ve heard, participating retail partners will be able to set prices according to how much information consumers are willing to share. So, for example, you might get $1 off your purchase for providing an email address, and $2 off if you provide a phone number.

Retailers have been offering these kinds of discounts for years, just never so explicitly. Loyalty programs, when done poorly, are just discounts-for-data offers. Consumers know that retailers are tracking information about them, and they know that they get access to offers in exchange for letting retailers keep track. But all of that has historically been done with a wink and a nod – not with explicit offers to give discounts for specific types of data shared.

My interest in this part of’s offering is two-fold. One, what will this do for consumer behavior? Does it spoil the game for other retailers to expose “the man behind the curtain” – to baldly state what we all have kind of known all along, which is that loyalty programs at their core are about collecting customer data over time? Will consumers take up these discounts-for-data offers, or, having seen the man behind the curtain, will they express distaste over the practice and shun it, preferring to pay a little extra for anonymity? Or will they just shrug their shoulders, assume their email address is already out there anyway, and grab the discount?

And, speaking of that, how many times can a consumer sell his or her email address and still collect a discount? Will the offer evolve over time to include the gender of your dog? Your mom’s birthday? I can’t wait to find out.

The other aspect of’s pricing strategy is similar to the first, except instead of focusing on consumers’ personal information, it focuses on behavior. So, for example, the company might offer 5% off an order if the consumer selects 7-day shipping over 2-day.

What fascinates me about this aspect of the strategy is the idea that consumers might be willing to save money in order to get it slower. Right now, I think most retailers operate under the conventional wisdom that consumers want it faster faster faster. And for free. Some of this perception has been set by Amazon Prime, where consumers perceived 2-day shipping as free, even thought it’s not (it’s included in their membership).

But even Amazon has struggled with its 2-day shipping – some financial analysts estimate the Amazon loses money on its Prime membership because Prime customers tend to abuse the whole 2-day thing. I admit it. I have abused it. I have ordered something at 10am, only to go back and order something else at noon – treating Amazon almost like a vending machine. I usually feel wasteful for about thirty seconds, until I realize that even if I had ordered the 2 items together, I’m mostly likely to get 2 separate shipments anyway, as Amazon seems to operate under weird shipping algorithms that tend towards maximizing packaging and air, rather than minimizing it.

And Amazon has tried to provide incentives for consumers to take slower shipping. If you opt out of 2-day shipping, often there will be $1 credits for Kindle or Amazon digital music or video downloads.

The difference between Amazon and jet seems to be that Amazon’s discounts for slower shipping come after you receive the order and you have to remember to apply them to Kindle or digital purchases, which I have found to be a convoluted process that feels very un-Amazon. It sounds like jet will offer theirs of the top of the order that you agree to take more slowly.

So one again – will this change consumer behavior? Do retailers have it wrong that consumers want faster, free shipping, or are they willing to trade that for some savings? My sense is, sometimes you’ll always want to receive your goods faster, and sometimes you don’t care. It won’t be all or nothing.

But whether can take down Amazon or not, the next few weeks promise to be fun to watch!