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Amazon’s HQ2 beauty contest a wake-up call to many cities

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“Head up, shoulders back, be sure to smile, and always look them in the eye.” Amazon is close to completing its beauty contest for the city — or cities — to build its second headquarters. Like any such contest, there was a cash reward for the winners.

Being chosen as the recipient city would have a huge impact on employment rates. Hence, the tax base for the city, property values and the demand for goods and services, such as restaurants, hotels and air flights in and out of the city would all see large influxes.

{mosads}The stakes are high. For many cities, being chosen would change the image of the city itself, attracting additional businesses to support Amazon as well as transforming the city into a “new age” metropolis with contemporary and futuristic commerce, replacing business dominance from the previous century. 

Each city had an opportunity to not only show itself off, but also “to go to the gym” to help reshape what it could do to improve its image in the minds of the judges — a small committee of Amazon executives. 

Cities showed off their respective infrastructure plans, their available human capital, their diversity, their access to universities, their crime rates and more. The cities could also make pledges to other things they would do if granted the second headquarters — i.e., tax credits, providing land and transportation systems. 

Nearly 240 cities entered the contest. Many others were interested. I suspect some did not enter because the cost of entry was too high given the low odds of winning. After a while, Amazon announced the 20 finalists. The competition was getting really intense as the judges presided behind a veil.

Only one … or maybe two cities will be rewarded with the grand prize. But for many cities, the Amazon beauty contest was an awakening. While Amazon is the crown jewel, there are many other companies that are always looking for a second or third site for alternative headquarters or major facilities.

Most companies will not be nearly as public as Amazon in their quests for a second city, but the processes will be similar. They notify cities they are under consideration, and they have an internal committee to assess their choices. 

For many cities, the Amazon beauty contest was a wake up call. To attract new business, they need to pay attention to what the business decision-makers consider important when selecting a site for a new location. That might seem obvious, but to many cities it was not.

The process is very similar to what companies do for selling products. They ask the questions:

  • Who is the target market?
  • What are the criterion the targeted customers will use to evaluate what they will buy?
  • Do I have those features?
  • Are we even in the consideration set?
  • What will it take for us to change in order to fit what they are need?
  • How do we get perceived to be the best fit to those needs?

It is no different for a city. Yet, cities and city management are not often structured to think this way. They should be though. 

The Amazon bid was an awakening for Philadelphia, for an example. The city currently has a major project underway with the objective of “re-branding” itself. To do that, it needs to start, like a business, by asking: “Who is the target?”

{mossecondads}If the target is tourists, then they need to look at Las Vegas and New York, two cities that have clearly positioned and branded themselves with catchy slogans: “What Happens in Vegas, Stays in Vegas,” and “I Love New York.” 

But branding is more than a slogan and an ad campaign. Without the gambling and entertainment, Vegas would not have caught on with advertising alone. There must be legitimacy to the claim for it to really stick. 

Alternatively, if the target is businesses with a desire to move to their city, then it is necessary to research what dimensions draw a business to a location and position the city’s image around those dimensions.

Interestingly, the winner of the Amazon beauty contest will just have gotten more beautiful. Overnight, the city becomes more enticing to other businesses looking for a high-tech area with a significant number of high-tech aspirants.  

As the Amazon competition has come to its final days, it is a matter of moments before the next contest begins. My advice to other cities is to watch what you eat, get plenty of exercise and pay attention to what you will be judged on.

David Reibstein is a professor of marketing at the Wharton School at the University of Pennsylvania. 

Tags Amazon Amazon tax Economy of the United States Las Vegas Marketing Publishing tax breaks

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