Cryptocurrency: Too Risky – or a Strategy for DR Survival?
Cryptocurrency – such as Bitcoin – is volatile, easily hacked, plagued with fraud issues, and has even been compared to Ponzi schemes. Sounds great, right? Well, regardless of the risks and challenges involved, it continues to take the world by storm, with major companies – possibly including Amazon – getting involved in the exchange. With so many companies trending toward accepting cryptocurrency, it may be necessary for direct response and other performance-based marketers to get in the game.
Many heavy hitters believe that cryptocurrency is the cash of the future, including Shark Tank’s Mark Cuban and Robert Herjavec. While Herjavec is a bit more cautious and won’t be diving in just yet, Cuban recently announced that fans would be able to use Bitcoin and Ether to purchase season tickets to Dallas Mavericks games for the 2018-2019 season. This will make the Mavs the second NBA team (after the Sacramento Kings) to delve into the cryptocurrency market.
More notably, retailers such as Overstock.com, Expedia, Newegg, Shopify stores, Etsy sellers, Subway, and Dish Network are among companies currently accepting cryptocurrency as payment for some or all of their products/services. Though these companies are not in direct competition with DR players, there is some overlap, which could make shopping at these retailers more appealing to consumers than those that do not accept cryptocurrency.
Still not convinced? Rumor has it that the big kahuna, Amazon, may be all in. In November, Amazon purchased the domains amazonethereum.com, amazoncryptocurrency.com, and amazoncryptocurrencies.com. Such purchases suggest that not only might Amazon be accepting cryptocurrency soon, but it may also be setting up its own exchanges. While the domains could mean nothing at all (three years ago, Amazon purchased amazonbitcoin.com, which merely redirects to amazon.com), with so much activity in the cryptocurrency market right now, it would be foolish to think that such a forward-thinking and progressive company that doesn’t shy away from new ventures wouldn’t have cryptocurrency in its game plan.
If Amazon does get in the market, it will put direct response companies at an even bigger disadvantage. Currently, Amazon is perhaps the biggest distributor of counterfeit and knockoff goods, and now it is even in the market of manufacturing its own competing products. Add a new purchase payment option, such as Bitcoin or Dash (commonly used to purchase consumer products), and it could be game over for the direct response industry.
Think about it. If a consumer has a choice between going to a product website and paying $19.99 plus processing and handling and (P&H) waiting possibly weeks for delivery … or going to Amazon and paying $19.99 or less in cryptocurrency and receiving the product in two days with Prime shipping, the choice is obvious. While many distributors do sell their products on Amazon, as well, the return is certainly not as high as the online and phone sales that allow for upsells and marked up P&H charges. Of course, distributors can always add Amazon Pay as a payment option on their sites (assuming cryptocurrency becomes an Amazon Pay option), but this may not be enough to keep sales on product websites. If product distributors and their merchants begin accepting cryptocurrency, it may help keep those sales competitive.
Despite the volatility of cryptocurrency right now, demand for it appears to be there. With kinks needing to be worked out, the house is not on fire just yet, but it is certainly the time for performance-based marketers to at least start doing their homework. There are whispers that some companies may be doing just that.