You Can't Win on Price

Posted by David Dorf on Oracle Blogs See other posts from Oracle Blogs or by David Dorf
Published on Thu, 16 Dec 2010 15:41:20 -0600 Indexed on 2010/12/17 17:08 UTC
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This year I did the majority of my Christmas shopping from the comfort of my home office. There aren't many things in stores you can't find online these days. I find it easier to search, research, and compare products online rather than walking the mall anyway. But there's a segment of the population that likes to be in the store, touching the products. For those people, smartphones avail them some of the e-commerce features I mentioned right there in the aisles.

Amazon PriceCheck.PNGFirst it was RedLaser, then TheFind, ShopSavvy and many others. But the one that should be scaring retailers is Amazon's PriceCheck application. It lets you scan the product barcode, take a picture of the product, or speak the product's name. Once the product is identified, it shows the online prices, with Amazon at the top of the list. Within 10 seconds you can order the item and Amazon Prime members get free 2-day shipping too.

I don't think fashion and grocery retailers need to worry much, but I have to believe smartphones are helping Amazon win a little more of the brand-name hardgoods market. So what's a retailer to do? Best Buy has begun to put QR Codes on their shelf labels that are easily scanned by smartphones and take the consumer to a Best Buy Web page where they can get extended information about the product. The consumer is getting the additional information they want, and Best Buy avoids the price comparisons. Of course if a consumer chooses to use the Amazon PriceCheck app, then all bets are off. That's when Best Buy has to hope the in-store experience and customer service will save the sale.

My point is that the internet makes information available to everyone, and smartphones make it available anywhere. Unless you want your store to be Amazon's local showroom, you need to be price-competitive but differentiate on other aspects of the shopping experience. With the cost of running a physical store, you can't win on price.

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