M-Commerce

Backlash Against Amazon Price Check Builds Steam

A backlash is growing against an app designed to help consumers scope out products at local stores, compare them to similar goods on Amazon — and then leave the stores empty-handed to make their actual purchases online.

Critics of the app, called “Amazon Price Check,” include brick-and-mortar retailers and Maine Sen. Olympia Snowe.

Of course, Amazon has always competed on prices, and consumers are becoming adept at using their smartphones to comparison shop for the best deal.

Amazon’s Aggressive Tactics

One thing critics find particularly galling is the deal Amazon is offering consumers on Saturday: Anyone who checks a price while shopping in a physical store will get an additional 5% percent discount off Amazon’s price on up to three qualifying products in certain categories, such as electronics, toys, sporting goods and music.

That was too much for Snowe, who said what Amazon was really doing was just “incentivizing consumers to spy on local shops.”

The Retail Industry Leaders Association also took issue with the app, pointing to Amazon’s already lopsided advantage because it does not collect sales taxes from the vast majority of its online consumers.

Amazon did not respond to our request to comment for this story.

Election Year

It is not surprising that Snowe spoke out against the app, David Johnson, principal of Strategic Vision, told the E-Commerce Times. “She is running for re-election next year and for a long-standing incumbent is surprisingly vulnerable.”

Maine is a rural state that prides itself on its small business operations and fierce independence, he added. “Taking on Amazon in this way was almost a foregone conclusion.”

Still, an elected official objecting to a free market — and perfectly legal — sales campaign raises some hackles. As do the retailers’ complaints about Amazon’s unfair advantage.

“Doesn’t every consumer have a right to find the best possible prices out there?” asked Service Quality Institute President John Tschohl.

“Companies need to realize they are playing on a global level now and need to provide not only the best prices, but the best level of service,” he told the E-Commerce Times.

Snowe’s office did not respond to our request to comment for this story.

New Era of Mobile Competition

It’s likely that consumers will only step up their mobile price comparison practices as they replace their feature phones with smartphones, and apps like Amazon’s Price Check become ubiquitous.

“This is an inevitability for the industry — smartphones eliminate information asymmetries on pricing, and right while the customer is in the store at the moment of purchase decision,” Steven Kramer, president of Hybris North America, told the E-Commerce Times.

“Fighting it won’t help — just like fighting digital downloading of music didn’t help the record labels,” he said. “If it’s not Amazon, it will be someone else, so retailers need to neutralize it by adding more value to the customers’ experience rather than fight it.”

Seizing Advantage

In fact, an era of mobilized consumers can present as much of an opportunity to brick-and-mortar retailers as it does for Amazon, noted Kramer.

They should embrace multichannel retailing, for example, he suggested, offering their own mobile apps.

“It’s on them to come up with an in-store experience with a multichannel aspect in the store that neutralizes any price advantage Amazon has,” Kramer maintained.

Retailers also need to shift from a “we sell to the customer” mindset to a “we partner with the customer in solving their problem or meeting their needs,” he suggested.

“The difference between these two approaches is relevance, embracing information sharing and integrating the online/offline shopping experience,” Kramer explained. “If brick-and-mortar retailers can add value to the customers’ shopping experience in the form of examples like pushing relevant and personalized offers to the consumers’ smartphones while they walk the aisles, or offering multichannel fulfillment options such as buy online/pick up in store, they can effectively neutralize Amazon’s price advantage.

“Brick and mortar retailers have a huge advantage over Amazon with their stores,” he continued, “but they have to offer a multichannel shopping experience that partners with the customer in solving their problem. If they provide this, their experience will best any price advantage Amazon may have.”

7 Comments

  • don’t see a problem that brick and mortar stores can’t work with

    since it has become a global economy this was bound to happen. The stores don’t own the prices only the products so i don’t see how this is different then when i use to go to the West Side Market in Cleveland walk up and down to check prices then when cell phones became available would do it with a family member…..now it is the Internet and cell phones…..it is just the capitalist market evolving…..it is hard to adapt and i have seen many stores just that

  • Fry’s Electronics got ahead of this game with a ‘We’ll match any price’ policy.

    Check their website (frys.com) to verify they have the product you are looking for. (Saves gas.)

    Find the best price you can and go to the store to pick up your product. They will verify that the price match exists and sell you the same product for that price.

    Of course you can use your smartphone to do your price check right in the store if that’s more convenient.

    Net result is that you pay the same price plus any sales tax, minus any shipping costs, have ‘instant delivery’ and make any returns / exchanges directly to the store (again with no delay and no shipping costs).

    Fry’s has recaptured a lot of my business from both Newegg and Amazon with this tactic.

    ‘Bricks and mortar’ can compete it seems. Without legislation!

  • Good to know I can use a phone app to comparison shop while I AM actually in a store. I usually do all my comparison shopping before I ever leave the house. Especially with these economic times. I AM just sorry they drove to a store without checking online or CALLING them so wasted the gas. Free enterprise works. There is nothing illegal about it. Everyone is mad because they came up with a good marketing plan??? Wow get a grip. Most of us are so broke these days from unemployment and being screwed by the gov’t that saving money anyway you can is second nature now. The Maine congress person makes enough money that she doesn’t need to comparison shop for anything. Retailers need to step up and maybe offer a price match to the folks standing in their store who can show them the lower price on their phone as proof. Just saying……

  • When a company incentivizes customers to act unethically then just boycott, (at least temporarily) that company and if you are a shareholder sell some of your shares. Personally I think Amazon has gone too far! Before you shout to some bureaucrat "There aught to be a law", shout to the company instead and change your behavior. Join me in boycotting Amazon for 90 days or until this incentive is removed. The free market comes with responsibility, just because it is legal doesn’t mean it is right.

  • the same way congress protected the music, film and software companies… there should be a Digital Millennium Pricing Act. If a store catches someone on their premises just price shopping, they should be able to sue them for $100,000 per infringement.

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