The Amazon App Attack

The Price Check by Amazon app encourages shoppers to price-check while in store, and offers shoppers the same items for $5 less than they would pay at a brick-and-mortar store.

Image: Amazon

Now that comparison shopping has come to smartphones, the uneasy truce that has existed between retailers with storefronts and online shops is about to be broken.

Amazon’s 27-hour incursion begins 12:01 a.m. this Saturday at a store near you. When in-store shoppers use the Amazon.com smartphone Price Check app to check the price of a product available in store, the online retailer will let users buy the product for $5 less, up to a total of $15 in discounts on three purchases.

From the perspective of Amazon, the move feeds into the American consumer’s well-documented desire to save money this holiday season (on top of that unfortunate pepper-spray incident, there’s plenty of data that says the same). Plus, it seizes on the technological advances that have made it easier to do so.

“The ability to check prices on your mobile phone when you’re in a physical retail store is changing the way people shop,” Sam Hall, director of Amazon Mobile, said in a press release about the app Tuesday. “Price transparency means that you can save money on the products you want and that’s a great thing for customers. Price Check in-store deals are another incentive to shop smart this holiday season.”

While the deal is limited to electronics, toys, sports, music, and DVDs, retailers of all stripes are outraged at the two-front attack. Not only is Amazon using consumers essentially to spy on other retailers’ prices, they are also undercutting them on price and taking away business.

Among the disgruntled is Stu Hennessey, the owner of Alki Bike and Board, which describes itself as West Seattle’s oldest and friendliest bicycle shop.

With the Amazon app, available free for iPhone and Android, users can price check four ways: scanning a bar code, snapping a photo, saying a product name, or typing in a search query.

"Don't try to hone in on everybody else's business. There are plenty of small businesses that are going to suffer because of that," Hennessey told King5 in Seattle.

The Retail Industry Leaders Association and the Alliance for Main Street Fairness have also raised the issue of Amazon’s avoidance of state sales taxes.

"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 said, according to a Los Angeles Times report.

On the other hand, some contend that the anger from and on behalf of independent stores is misplaced. It’s the big-box retail stores that will suffer the most, predicts one Fortune blogger.

No doubt some independent, locally owned stores will take some incidental hits. But if such promotions are going to truly hurt those businesses, they're in trouble anyway—probably thanks much more to Wal-Mart and Target than to Amazon.

That's definitely true, but if Target gets hit by Amazon, you can bet that the chain will come back swinging with their own promotions, and the race to the bottom of the price structure isn't going to help the big boxes or the small bike stores.

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