Now that’s what I call a price war

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Price comparison sites have been around for a while. However, for the most part, they were only really of use for online shopping comparisons. When you were out in a store you would face a dilemma between paying the price there or going home to check the online price. To be sure, with smart phones you could do some price checking but it was a hassle.

Today, Amazon.com have made price comparisons simple. Really simple. Their price check app allows you to scan the barcode or even photograph and item in a store and get the Amazon price. If it is cheaper, you can buy it right then from the app and Amazon will ship it to you. If you are a big Amazon customer that shipping (in the US) is free. Suffice it to say, this is price search at (almost) its easiest. I say ‘almost’ because you will compare the price to Amazon but not with other online retailers.

The simple implication of this would be, as smart phones proliferate, there may be little difference between store and Amazon prices for lots of things. But consider, if you will, a world where everyone had this app and used it regularly. Then the only physical stores you will end up with are ones that act like distribution centres — that is, where the shipping cost to the consumer is avoided. That is, the shipping function is something you pay someone to do or you do yourself. The middle where you travel half-way may well disappear for lots of goods. From Amazon’s perspective you are now focused on the real service it provides: shipping to your door. If you can wait, that will be attractive.

There is an important wrinkle to all of this: throughout much of the US, if you buy from Amazon you don’t have to pay sales tax. You might think that that cuts in favour of Amazon but also consider that the price you are comparing to in a physical store is the price without tax. You find out the tax+ price at the checkout. So Amazon has carefully avoided this app drawing attention to the sales tax issue which, let’s face it, is something they shouldn’t be able to avoid. Interestingly, the app could check your location, get your price and tell you the full price but it doesn’t. Nonetheless, for consumers who know comparisons have become easier.

2 Responses to "Now that’s what I call a price war"
  1. “If you can wait, [shipping] will be attractive.” I think patient consumers would benefit even more from an app that notifies them when a product’s price falls below some pre-specified level. No retailer like Amazon would make such an app, though.
    (It looks like I’m the only person commenting here this week…)

  2. Interestingly, for Australians this also works as a Borders Online comparison app, since they’ll price-match Amazon (and have free shipping!).

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