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Amazon makes a move which could fundamentally change retail sales

Amazon makes a move which coul...
The Price Check by Amazon App is creating a storm in the retail industry
The Price Check by Amazon App is creating a storm in the retail industry
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The Price Check by Amazon App is creating a storm in the retail industry
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The Price Check by Amazon App is creating a storm in the retail industry

Amazon, one of the companies at the very forefront of online retailing in the United Statesis to make a compelling offer this coming Saturday for one day only - use its smartphone app (Android or Apple app) to compare prices, and they'll effectively pay you $5 to walk out of the store.

It is an historic move in the evolution of retail sales.

Mobile sales make up around 5% of American retail sales right now, but with the population heading for blanket smart phone penetration, the price comparison app might go mainstream quite quickly from here and retail advertising may never be the same again. Several such apps exist, but none with this level of promotional effort behind them.

The Price Check by Amazon App is designed to let users compare prices with Amazon.com and its merchants when you are standing in front of a real product in a bricks and mortar store. Products are identified by scanning a barcode, taking a picture, speaking the product name or using text search, then compared to Amazon prices. You can then, of course, purchase the product online.

On Saturday December 10 Amazon is sweetening the deal by giving customers who use the app (with geolocation switched on) a discount of 5 percent (up to $5) if they buy the item they price checked through Amazon (within 24 hours) instead of accepting the price in front of them for the convenience of taking immediate possession of their purchase. The offer is valid for up to three items per customer.

The advantages of getting a customer to use a mobile app are obvious from the point of view of the customer, but in grabbing the lion's share of attention on a critical shopping day, Amazon's move seems well calculated.

A mobile app gives online retailers the ability to make a bid on a customer's patronage at the time- and point-of-sale, inside a competitor's bricks and mortar. Offers can be made and thresholds established for changing behaviors with incentives, at the same time as creating a marketing intelligence tool par excellence.

The offer could cost the company a lot of money if everyone downloads the app and plays along, though its move establishes it clearly as an online thought leader and with the news coverage likely to be massive. The stunt offers good value for money, particularly when you consider the price comparison app looks set to go mainstream as a new weapon in the war between bricks-and-mortar retailing and online retailing and Amazon will be leading the charge. The knowledge it gains will enable it to discern patterns on the exact deals their bricks and mortar competitors are prepared to do, and react in real time.

For bricks and mortar retailers, this could be a telling blow, and it is a fact that the industry is very aware of:

"The Retail Industry Leaders Association (RILA) reacted to a new smartphone App from Amazon.com that encourages holiday shoppers to use brick and mortar stores as showrooms to then purchase merchandise online from inside the store. Central to this tactic is Amazon's continued practice of using a pre-internet loophole to avoid state sales tax collection, a move that gives them an unfair competitive advantage over Main Street retailers." (RILA)

Regardless, it's going to be worth watching the take-up of the app, as the news of this offer will focus enormous attention on Amazon's shopping comparison app and its abilities to tell you where you'll get the best deal.  The app is available at the Apple App Store and Android Market.

This is big! Mobile phone retail is about to become a significant factor in purchasing decisions.

19 comments
Loz
This is such a dick move. It's nasty, it's predatory and it plays to the worst instincts of the shopper. When people talk about the demise of small retailers, who put time, care and expertise into their shops, this is the sort of thing that's killing them. What's worse is that Amazon is deliberately aiming to rob regular retailers of the one thing Amazon can't provide - actual touch and feel shopping. When you encourage shoppers to take the expensive 90% of their transaction through your competitor's store, and then hijack them at the till, I can't see how that's remotely fair. People are already aware of online shopping, there's enough of this sort of retail-killing behaviour going on already without Amazon directly encouraging it. Way to destroy more jobs, Bezos! At least give the retailers a reach-around.
Alex Angel
This is not going to end well. Honestly, I\'d completely understand stores banning anyone caught barcode scanning their merchandise.
chinna
The simplest way to stop amazon is to just put up a board in the store saying \"NO PHOTOGRAPHY\" for security reasons...LOL
William H Lanteigne
I wouldn\'t get all that excited, unless the Amazon comparison price includes shipping. It doesn\'t pay to buy an item for $10 less if you have to pay $20 for shipping. I do a lot of internet shopping, especially for items I can\'t get locally, but I\'ve learned to compare the \"price plus shipping\" price against the \"brick & mortar store. Of course, any innovation that promises greater efficiency and lower cost is going to be \"unfair\" competition- except for those retailers who get with the program and operate their own retail websites.
Alan Belardinelli
This is unlikely to work for Norway (not that our puny population makes us that big of a target). Here, any import gets levied with the 25% VAT anyway as it comes across. Amazingly, they also apply VAT to the cost of shipping, making most any internett purchase (apart from books, which are exempt) shipped from the online retailer as expensive as the crazily priced merch in the shops here.
Serge Richard
As much as I like to shop at Amazon and save a few bucks. This one is below the belt to the local and perhaps small retailers. Amazon gets a -C ... Regardless, I bet they\'ll reap the benefits.
Stlheadake
+1 Loz, I buy A LOT of stuff online. But encouraging customers to actually GO to the store, touch, feel, try on items THEN order them online is just wrong! There have been grumblings in congress about passing internet taxation laws, and this might just be the straw that breaks the camel\'s back! @chinna - once I was standing at Target with my smart phone in hand. I was comparing the item I was looking at with the item in Target\'s sale ad (you know you HAVE to have the EXACT SKU # or it creates a frackus), and a Target Associate asked me to put my phone away. He told me that I couldn\'t \'take pictures\' at the store. I explained what I was doing, and that was OK. I DID want to take him and Target to task on that policy though. I hadn\'t seen that posted anywhere. But I didn\'t....
Mark A
Retailers do provide a valuable service: inventory immediately available, smell, touch and feel products, \"shopping\" in a real social setting (where else can you sip Starbucks and shop if not at the mall). Large mega malls and stores have killed the mom and pop stores that used to call you by your first name when you entered their store. So long Mayberry, hello computer.
Ed
\"The app is available at the Apple App Store and Android Market.\" So once again, users of *OTHER* smartphones are SOL! No Windows Phone, no Symbian, no Blackberry, no WebOS... I guess unless you are one of the annointed few, you don\'t get to be a part of this elite class of people!
DR. Fickes
Good luck trying to beat the internet.