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Amazon Will Pay Shoppers $5 to Walk Out of Stores Empty-Handed

108 points by 8bitliving 15y ago

pavel_lishin 15y ago
I remember reading a story about a year ago, reporting that stores would ask people using their smartphones to leave - they were worried that they were checking for lower prices in the area. This seems like it might be met with the same sort of attitude, at first.
- jtreminio 15y ago
  When I'm in a store, I like to scan product's barcodes to see what the reviews are on Amazon. If it's a few dollars difference in price, then I'll still purchase the item, depending on if the rating is good enough. If the price is more than several dollars, though, I'll have to decide whether to pay extra for instant gratification, or if it's worth waiting a few days to get to me. If a store attempts to stop me from scanning barcodes in this manner, I just mark it as a store that is not competitive price-wise and will no longer go there.
  - ceejayoz 15y ago
    > If a store attempts to stop me from scanning barcodes in this manner, I just mark it as a store that is not competitive price-wise and will no longer go there. Precisely. If they're doing that, it's because they know you can do better elsewhere.
  - danso 15y ago
    But you see how this is a one-way relationship between them and Amazon, right? Even if they match the price of Amazon, they are on the losing end-of-the-stick because: 1) They have to pay the expenses for physically hosting that product 2) They may also have to collect state tax So what they get out this relationship is that the customer uses store resources to investigate a product, and then either a) goes home and orders the product or b) buys the product at the store out of instant gratification. Amazon either wins big in case a), or in b) incurs the slight cost of hosting the online resources that allowed you to do that research. The store obviously loses big in case a) and it still might lose in case b, if the product was priced so low as to be a loss-leader but you ended up not buying anything else. Not saying what you're doing is wrong or bad. Just pointing out that the store is kind of against the brick wall, so to speak. Perhaps the future for retailers is to adopt a gas station model: depend on Amazon to do the supplying, and make money off of something totally unrelated, just as gas stations make more profit off of a cup of coffee than they do for a full tank of gas.
  - esrauch 15y ago
    What you are saying is completely valid if you are comparing the prices between two physical stores in the same general area. The problem (which may or may not be an actual problem) is that the overhead of operating a store that allows browsing demands the price to not be competitive against amazon (if you are defining not competitive as 10% more expensive). This will only become an increasing problem as more people do what is discussed in the article. Best Buy will have to handle all of the foot traffic for both their own sales and for Amazon sales, that will lower their conversion rates which means they have to have an even higher markup which will drive more people to buy online and so on. At some point the store will go out of business and you won't even be able to pay the $10 extra to be able to physically compare products even if you wanted to.
- tomkarlo 15y ago
  I've been in a few stores where they were clearly placing stickers on top of the bar codes to make it more difficult to price check... fortunately, most big ticket household items like TVs have unique product numbers that are relatively easy to search for, but I could see this discouraging a few shoppers. For things like TVs, Best Buy et al tend to be price competitive. It's add-on things like the HDMI cables and extended warranties where they screw customers with hugely inflated margins.
  - yesimahuman 15y ago
    I ended up buying a TV on black friday at Best Buy that was cheaper than on Amazon, even after state sales tax, which was surprising.
  - west1737 15y ago
    You can also take a picture of most things- it's a little less accurate, but it still works. Also, when a store puts their own barcode over one, I generally don't feel any guilt about peeling it back a little and scanning the original.
- danso 15y ago
  I love buying things off of Amazon, but almost always -- out of a dumb sort of courtesy -- I will buy a product that I became interested in from seeing it at the store. Brick and mortar has its own inherent expenses, and I can see why such stores would get annoyed when shoppers take the best from both worlds: being able to touch and test a product in the flesh and the cheaper prices of an online retailer. In what ways can a brick-and-mortar store improve their business model to compete with this? Providing excellent customer service and expertise won't do anything to address the problem (as I can always suck up a salesperson's time and then go home and buy the product). On the other hand, Apple stores have this exact same problem...even more so because a) their markup is even higher than electronic retail and b) the literally allow you to see how much more expensive their prices are compared to online listings, right from their own demo computers. I don't buy much from the Apple stores but when I do, I feel even more compelled to continue my dumb-courtesy and pay the extra $10-$20 in-store. But I don't how extendable the Apple magic is to every kind of retailer
  - Pheter 15y ago
    Apple still get the money if you buy their products elsewhere.
ChrisLTD 15y ago
How long before stores start deliberately finding ways to kill cell phone reception?
- davidblair 15y ago
  The FCC strictly prohibits this I believe.
  - ChrisLTD 15y ago
    That's my understanding as well, but they could try some surreptitious methods that would stop shy of using an actual jammer.
    - Vivtek 15y ago
      "We've been meaning to get that cash register fixed." Although the FCC wouldn't take that excuse more than once. (And maybe not once.)
  - freehunter 15y ago
    They can't prohibit a store from building thick cement walls or putting metal cages around the walls. The only thing banned is cell-blockers.
    - Florin_Andrei 15y ago
      Once they start messing with that, legal or not, I feel there will be a huge political backlash. While the confrontation will be fascinating to watch, I believe the "stop messing with the cell phone" party will win.
      - freehunter 15y ago
        It really depends on if you can prove malicious intent. I know in the back of Wal Mart, for example, my cell reception is terrible. There are metal walls everywhere, thick metal shelves, and the back of the store is made of concrete and rebar. When I go into a store, I really expect my cell service to drop out. I expect a lot of people have the same expectation.
rosariom 15y ago
This is what I was kind of doing for books in Barnes and Noble: check the contents, read a few pages, then buy the e-book or physical book online. With this app it would make it super convenient to compare prices and order instantly after doing such a thing. I would imagine this will extend to clothing and other things, i.e. people will try the clothes and look at stuff in physical stores then order online if there is no rush to have the item. Who would have thought the online world would be such a force to reckon with?
jrockway 15y ago
I love this. Stores hate it when people do stuff like this, and that's what makes it so fun.
ineedtosleep 15y ago
This is exactly what I've done at Fry's (50% of the time as they match prices lots of times) and any of the bigger bookstores ever since I got 3G. I'm surprised Amazon, or any other online retailer, has come up with this strategy this late.
- Florin_Andrei 15y ago
  I feel no remorse doing this at Fry's. But at a place such as Books Inc. (your basic friendly neighborhood book store), well, I'd rather just buy it from the store. Borders is gone. If Books Inc goes too, downtown will be a much less interesting place.
freehunter 15y ago
Now when are they going to add this feature to their Windows Phone app? Windows Phone already has the capability built-in (through Bing Vision) to scan barcodes and price-match, but Amazon's app adds more features on top of that. Kinda ridiculous that they haven't added that to their app on this platform.
raganwald 15y ago
Retailers aren’t all lumbering behemoths being driven into extinction by online merchants. Many have figured out that they are actually running showrooms and charge the manufacturers rent for displaying their wares. Supermarkets have been playing this game for years, renting shelf space by the foot to people like Coca-Cola. Meanwhile, people like WalMart make a business out of logistics, they only carry stuff where they have a strong financial advantage. It’s not impossible, but it’s hard to beat their prices when you factor in shipping. It will be interesting to see how Amazon and WalMart match up against each other over the next decade. I wouldn’t be surprised if WalMart start displaying higher online prices right beside their merchandise in the store.
- nitrogen 15y ago
  I wouldn’t be surprised if WalMart start displaying higher online prices right beside their merchandise in the store. WalMart will compete if they are threatened. A new bargain supermarket moved into the area that puts price comparisons between them, WalMart, and the other local chains in its weekly flyers. In response, the local WalMart started putting signs up in the store showing their price and the competitor's price (and name) for items where WalMart is cheaper.
- jader201 15y ago
  Maybe not WalMart, but this is exactly what Best Buy has become for me. I love going into Best Buy, just to be surrounded by all the high tech goodness, but I never buy anything there. I go to check stuff out, then go home and jump online and order the same thing for 20% or more less from Amazon or Newegg.
  - Jun8 15y ago
    I've got to say: This is the rational, homo economicus way that textbooks say buyers should behave and, to me, it's just terrible! You may find it pedantic, but I think that if BB provides a utility for you you should reward them. The same thing is happened to large bookstores, music stores, etc., people checked out the wares and then bought it online.
redthrowaway 15y ago
This is an ingenious move by Bezos & co. Not only do they train consumers to price-shop using Amazon (which usually beats brick & mortars), but they gain a treasure trove of information on their competitor's holiday pricing. I'd hate to be a competitor Amazon takes seriously.
mrpollo 15y ago
I was shopping for toys for my 4 year old this black friday, and I scanned a few of them ( if not all ) and the discounted toys where at the same price as Amazon. eg: Lego Train Set Store: $21.99 Amazon: $19.99 while the store price is marked as 20% off, and the Amazon price is marked as Prime, i went with Amazon Prime for the most part, the free shipping always wins for me, I wish this promotion was already active back then.
klinquist 15y ago
This is why stores should start offering free wifi - so they can see how much this is affecting their bottom line.
- xer0 15y ago
  But wouldn't the store have to be sniffing the actual content of the traffic? Not a great move if it got out, and I might just assume that's happening anyway and not use it.
harryf 15y ago
The problem here is this isn't a sustainable strategy long term. While Amazon has succeeded in killing the bookstore, this works because consumers are willing to accept "browsing" for books online. The same is not true for many other types of goods, such as clothes. Shops are performing a useful function in letting consumers see, touch and try what they buy. So what Amazon is doing here basically parasitical, but a smart parasite doesn't kill it's host. There's a reason why Jeff Bezos invested in SecondLife ( http://goo.gl/PluAT http://goo.gl/PluAT )...
- tomkarlo 15y ago
  Shops also enjoy _insane_ margins on clothing relative to any other retail line (except maybe cosmetics.) On average, 50% of the retail price is markup by the retailer. Clothing has a lot of issues that make in harder to sell (in particular, the need to carry a range of colors and sizes for each product makes inventory less efficient) but that's not enough to justify those kinds of margins. It's an industry ripe to be picked off by more efficient operators.
- kyleslattery 15y ago
  Zappos has just about solved this problem for me though. They realize that people want to try on shoes and clothes, and so they offer free shipping and free returns, and if you're a VIP member (just ask and they'll give it to you), everything ships with next day delivery. So, if I see a few pairs of shoes I like, I'll order them all, receive them the next day, and ship back the ones I don't like. It's great.
  - cpeterso 15y ago
    What does Zappos do with returned shoes? Do they resell them at a discount? They must anticipate higher returns for shoes than online retailers selling books and music.
    - kyleslattery 15y ago
      I'm pretty sure they just restock them and sell them at the same price. They only accept returned shoes that are unused.
mquinlan 15y ago
It sounds gimmicky when you add on top of the 3 item, 2 day, and 5% off restrictions that it's only on select products and valid in select stores. Nice headline news, but shouldn't Amazon be looking to find people who'll become long-term users?
- tghw 15y ago
  This is finding long term users. It's getting people into the habit of checking Amazon's prices using their phones. Generally, Amazon is competitive enough that they can beat brick and mortar prices, especially when you take sales tax into account (in some states, at least). It's also trying to get people who don't normally shop online to try it out, under the assumption that once they do it a few times, they'll feel more comfortable doing it in the future.
vijayr 15y ago
Last weekend, I was at a used books shop. I saw a guy with some iphone app, checking the price of each and every book in the shop (there were lots of books for $1). The store people noticed, but didn't say anything, at least I didn't see them say anything. I bet they weren't happy about it. How long before we just place an order, online, in a centralized place, and pick one of these: cheapest fastest delivery highest quality or some combination of these, and the app finds the best place to order (amazon, walmart etc) and automatically places the order?
- pyre 15y ago
  I'll bet that guy was looking for steals as far as the $1 discount goes. He was checking the Amazon price to see what he could flip them for. There were a couple of stories like this about flea markets and such on HN a while back.
  - vijayr 15y ago
    Probably. I wouldn't have noticed at all, except for the beep sound, every single time his phone read the barcode. He looked experienced in this, as he was going through 15-20 books a minute (never reading the title or anything, pick the book, read the barcode, check price, move on).
    - InnocentB 15y ago
      Slate ran an interesting article last year about this aspect of the used book market: http://www.slate.com/articles/arts/culturebox/2010/10/confessions_of_a_usedbook_salesman.single.html http://www.slate.com/articles/arts/culturebox/2010/10/confes...
- droithomme 15y ago
  Yeah, that guy was definitely a reseller. Shop didn't mind because he likely ends up buying some books at the price they have set. Logical result is that shopowners buy iphone ISBN scanner and start repricing according to online prices, or open their own online store.
- 15y ago
droithomme 15y ago
Very interesting move by amazon. No doubt the retaliation will be political in nature and focus on the unfairness of no sales tax, well the retaliation is already underway and lobbyists have been hired and working on this issue for some years now. I have always had a paper notebook I carry around with me. Sometimes I will be shopping for something and the local store will have many models but none on display and almost no information about features. Let's take BluRay players for example. The local store has about 30 models of these. A couple are on display but not plugged in. What is really important to me is the player not take 5 minutes to cue the movie because the processor is underpowered and the DRM on BluRay uses a complex scheme involving Java code and decrypting. I also want to know how the menus are arranged, because most remotes are infuriating to use and user interface is important. You would think this would be an ideal situation for brick and mortar because knowledgable sales clerks would be able to answer my questions and allow me to test the merchandise using the large screen TVs they have set up for the purpose. Alas, no. The era of sales clerks knowing accurate information about products ended many years ago. Such places can not be found. The era of being allowed to test things in store has likewise ended. So what I do is write down the model names of a half dozen of the most likely candidates and then go read online reviews to find if there are complaints about cuing speed. Finding out about the menu design is nearly impossible though unless I can find a pdf manual to download that comprehensively documents the menu structure (seldom the case). Having found the best product, I return to the brick and mortar store and purchase the item. What happens sometimes in these endeavors is a manager comes up to me and accuses me of being a "price checker" for the competition. He will tell me that the license that governs my entry to the store prohibits this and that I am now banned from the store and police will be called in the future. I assure him I am not a competitor's price checker, I am trying to get information about the product since his own people don't know anything. He is not interested. I am now banned from the store. So then I buy from amazon. If the product sucks I return it. This is an inefficient process, I would much rather buy locally but local merchants aren't hearing of it.
- colanderman 15y ago
  He will tell me that the license that governs my entry to the store prohibits this and that I am now banned from the store and police will be called in the future. That is absolutely hilarious. I'm suddenly eager to walk into random Best Buys and try this. If it doesn't work, I'll try purchasing something and leaving without stopping at the receipt checker.
oldgregg 15y ago
I think Amazon will eventually open a big box store. They won't carry any inventory-- just one copy of each item. You scan the items you want and choose shipping to your home or next-day pickup at the store. With so many big box stores shutting down the real estate will be cheap. And with no inventory turnover there would be relatively no employee overhead. If walmart has 100k SKUs an Amazon storefront could offer 250k SKUs. It would be massively disruptive for items that are more difficult to browse/evaluate online (read: clothing).
- rscale 15y ago
  Do you know if anybody has tried a showroom/ship model for those sorts of purchases at any scale? I've wanted to see somebody try the model for a while, because without testing I have trouble guessing the balance between 'get to see things in person' and 'still have to wait a day or three for delivery' and I'd love to see the results.
  - eru 15y ago
    > Do you know if anybody has tried a showroom/ship model for those sorts of purchases at any scale? Britain's Argos comes to mind.
  - freehunter 15y ago
    Sears does this in some locations. They'll have a small storefront with a low amount of inventory. Some best-selling products and seasonal products sit on the floor/shelves to be seen, there are product specialists working in the store who know the catalog, and you order what you're looking for. The employee will answer your questions, then the item gets shipped to the store or to your home. It's not a huge operation, but they do this in a lot of small towns across America, towns that can't support a full store but would still like the benefits of having a location to visit.
  - wtracy 15y ago
    Dell was doing this at one point. I don't know whether they still do.
  - 15y ago
hallman76 15y ago
Given Amazon's history of displaying different prices to different users, I wonder if they'll use this technology to optimize their prices to beat a specific competitor but perhaps not go as low as they could.
- jrockway 15y ago
  Amazon's prices are rarely the lowest.
- jrabone 15y ago
  Not this again. Amazon does not do this in the way that you imply. They try to have a single page for a given item (not always successfully). On that page, different users may see an offer for the SAME item from a DIFFERENT merchant - the price is set by the merchant, not Amazon. If you don't like it (and if there is a choice) click on the "N more used & new" link close to the buy button to see all the offers from various merchants. Amazon themselves DO NOT show different prices to different customers for the same item sold by the "primary" Amazon merchant. However, they also run a merchant called "Warehouse Deals" which is basically B-grade stock. Obviously this is cheaper, with limited availability. Disclaimer: ex-employee.
moocow01 15y ago
I really wonder how this will impact the commercial real estate market and if commercial real estate is an incredibly bad investment these days even at its current lows. As we all know, you have this obvious and unstoppable force of doing stuff now at home online. More and more people who used to go to stores now stay at home to shop and more and more people can perform their jobs via telecommuting rather than sitting in an office. Consequently, we have less and less need for commercial real estate space. My feeling is that in X years commercial real estate will be even more vastly under occupied and will only be occupied by services that cant be done online (restaurants, bars, night clubs, salon). Maybe as a result the expanding geographic human footprint on the earth will slow down a bit in that Walmart wont need be putting up its next super store.
amanfredi 15y ago
Handling delivery of packages is sill a major annoyance of online shopping. I love Amazon but consumer-side logistics could use some serious improvement. The drive to reduce shipping prices as much as possible has definite downsides. - Items consistently damaged/stolen during shipment. - Delivery of incorrect items/wrong address. - No place to leave packages during the day if you live in an apartment with no doorman. - Impossible to schedule delivery, especially before the first delivery attempt. It is unwise to order things while traveling. - Carriers lie about delivery attempts and times. - Distribution center for package pick up is 10 miles away and only open M-F 9-5.
- CamperBob 15y ago
  Idea: a site designed to build and maintain a trusted local network of people who are at home or work all day, and who will receive packages for you, for a small commission.
  - nooneelse 15y ago
    So a PO Box that only charges when you get something? FedEx has a "Hold at Location" service.
    - CamperBob 15y ago
      Which is fine except when the location is 20 miles across town.
  - Lazlo_Nibble 15y ago
    Amazon is already working with 7-11 to provide this service.
- brk 15y ago
  I've incurred some of these. The UPS or FedEx guy (or sometimes both) is at my house almost every day. We order a lot of stuff from Amazon, just general merchandise (Amazon Prime makes this a no-brainer), plus I order a lot of things for work. Rarely are things lost or damaged in shipment. It has happened, but so infrequently I can't remember the last time. The pre-signing for shipments is mostly solved, especially if you frequently deal with the same merchants. I'll put in the order notes to not require signature and call or email if this cannot be done. When ordering things from Apple, the send you a release form to sign in advance. Having a place to leave packages could be a problem for people in apartments I imaging, I don't have that issue. I've also had the carriers claim to attempt a delivery when they didn't (FedEx holiday fill-in person). For me, this isn't a big deal, I have security cameras covering all areas of my property (a unique case, I'm aware). The one time that happened the driver got to make a special trip back out to deliver my package a 7:30PM...
querulous 15y ago
How many people who use Amazon frequently work at home or have a spouse/partner at home during the day? I would love to use Amazon for the bulk of my purchases, but I can't take delivery at work and there is no one to receive packages at my home during the day. It's completely infeasible for me to use Amazon except for occaisonal orders where it is worth taking time to stay home or visit the UPS depot to actually receive my orders. Until Amazon solves this problem, they're not a serious competitor to traditional retail.
- trapexit 15y ago
  http://consumerist.com/2011/09/amazon-testing-locker-system-that-would-let-you-pick-up-your-package-at-7-11.html http://consumerist.com/2011/09/amazon-testing-locker-system-...
- ghaff 15y ago
  Depends where you live. With rare exceptions, for better of worse, shippers just leave packages at my door. (Or in the case of USPS hanging from my mailbox because the carrier doesn't want to take the time to drive down my driveway---grr.) Sometimes I have to sign a signature release form left on my door. But very rarely do I have to go to the post office or UPS depot, which I agree would be a real pain if I had to do it for every mail order purchase.
- macinthebox2 15y ago
  UPS has something called My Choice that lets you see when packages are arriving, schedule their delivery etc. There's supposedly a free version. http://www.ups.com/mychoice http://www.ups.com/mychoice
int3rnaut 15y ago
This is off topic but people are discussing Amazon and shipping so I figured I'd ask this here, because it's always confused me. Why do so many American based companies refuse to ship to Canada or limit what they do ship to Canada (Amazon, has Amazon.ca, but the selection is nothing compared to the .com, which does not ship to Canada)? It seems strange with things like NAFTA in place that companies would restrict their market power by eliminating a potential buying supply that for all intents and purposes is very similar (in terms of shipping costs, dollar value etc). So HN, what am I missing here?
- throw_away 15y ago
  I'm pretty sure that this is due to Canada's cultural protection laws, not US companies declining to take your money for some reason. this article talks about this a bit: http://www.theglobeandmail.com/globe-investor/amazon-given-green-light-to-set-up-shop-in-canada/article1532080/ http://www.theglobeandmail.com/globe-investor/amazon-given-g...
ck2 15y ago
I honestly don't know how Amazon stays in business, their customer service is almost too good, they are the anti-paypal. Just today I wrote them a detailed email about a problem I had with a product I bought and was expecting instructions on how to return it, etc. - instead they just refunded the whole purchase price and told me to keep it. Kinda blew my mind.

108 points by 8bitliving 15y ago

I remember reading a story about a year ago, reporting that stores would ask people using their smartphones to leave - they were worried that they were checking for lower prices in the area. This seems like it might be met with the same sort of attitude, at first.

jtreminio 15y ago
When I'm in a store, I like to scan product's barcodes to see what the reviews are on Amazon. If it's a few dollars difference in price, then I'll still purchase the item, depending on if the rating is good enough. If the price is more than several dollars, though, I'll have to decide whether to pay extra for instant gratification, or if it's worth waiting a few days to get to me. If a store attempts to stop me from scanning barcodes in this manner, I just mark it as a store that is not competitive price-wise and will no longer go there.
- ceejayoz 15y ago
  > If a store attempts to stop me from scanning barcodes in this manner, I just mark it as a store that is not competitive price-wise and will no longer go there. Precisely. If they're doing that, it's because they know you can do better elsewhere.
- danso 15y ago
  But you see how this is a one-way relationship between them and Amazon, right? Even if they match the price of Amazon, they are on the losing end-of-the-stick because: 1) They have to pay the expenses for physically hosting that product 2) They may also have to collect state tax So what they get out this relationship is that the customer uses store resources to investigate a product, and then either a) goes home and orders the product or b) buys the product at the store out of instant gratification. Amazon either wins big in case a), or in b) incurs the slight cost of hosting the online resources that allowed you to do that research. The store obviously loses big in case a) and it still might lose in case b, if the product was priced so low as to be a loss-leader but you ended up not buying anything else. Not saying what you're doing is wrong or bad. Just pointing out that the store is kind of against the brick wall, so to speak. Perhaps the future for retailers is to adopt a gas station model: depend on Amazon to do the supplying, and make money off of something totally unrelated, just as gas stations make more profit off of a cup of coffee than they do for a full tank of gas.
- esrauch 15y ago
  What you are saying is completely valid if you are comparing the prices between two physical stores in the same general area. The problem (which may or may not be an actual problem) is that the overhead of operating a store that allows browsing demands the price to not be competitive against amazon (if you are defining not competitive as 10% more expensive). This will only become an increasing problem as more people do what is discussed in the article. Best Buy will have to handle all of the foot traffic for both their own sales and for Amazon sales, that will lower their conversion rates which means they have to have an even higher markup which will drive more people to buy online and so on. At some point the store will go out of business and you won't even be able to pay the $10 extra to be able to physically compare products even if you wanted to.
tomkarlo 15y ago
I've been in a few stores where they were clearly placing stickers on top of the bar codes to make it more difficult to price check... fortunately, most big ticket household items like TVs have unique product numbers that are relatively easy to search for, but I could see this discouraging a few shoppers. For things like TVs, Best Buy et al tend to be price competitive. It's add-on things like the HDMI cables and extended warranties where they screw customers with hugely inflated margins.
- yesimahuman 15y ago
  I ended up buying a TV on black friday at Best Buy that was cheaper than on Amazon, even after state sales tax, which was surprising.
- west1737 15y ago
  You can also take a picture of most things- it's a little less accurate, but it still works. Also, when a store puts their own barcode over one, I generally don't feel any guilt about peeling it back a little and scanning the original.
danso 15y ago
I love buying things off of Amazon, but almost always -- out of a dumb sort of courtesy -- I will buy a product that I became interested in from seeing it at the store. Brick and mortar has its own inherent expenses, and I can see why such stores would get annoyed when shoppers take the best from both worlds: being able to touch and test a product in the flesh and the cheaper prices of an online retailer. In what ways can a brick-and-mortar store improve their business model to compete with this? Providing excellent customer service and expertise won't do anything to address the problem (as I can always suck up a salesperson's time and then go home and buy the product). On the other hand, Apple stores have this exact same problem...even more so because a) their markup is even higher than electronic retail and b) the literally allow you to see how much more expensive their prices are compared to online listings, right from their own demo computers. I don't buy much from the Apple stores but when I do, I feel even more compelled to continue my dumb-courtesy and pay the extra $10-$20 in-store. But I don't how extendable the Apple magic is to every kind of retailer
- Pheter 15y ago
  Apple still get the money if you buy their products elsewhere.

ChrisLTD 15y ago

How long before stores start deliberately finding ways to kill cell phone reception?

davidblair 15y ago
The FCC strictly prohibits this I believe.
- ChrisLTD 15y ago
  That's my understanding as well, but they could try some surreptitious methods that would stop shy of using an actual jammer.
  - Vivtek 15y ago
    "We've been meaning to get that cash register fixed." Although the FCC wouldn't take that excuse more than once. (And maybe not once.)
- freehunter 15y ago
  They can't prohibit a store from building thick cement walls or putting metal cages around the walls. The only thing banned is cell-blockers.
  - Florin_Andrei 15y ago
    Once they start messing with that, legal or not, I feel there will be a huge political backlash. While the confrontation will be fascinating to watch, I believe the "stop messing with the cell phone" party will win.
    - freehunter 15y ago
      It really depends on if you can prove malicious intent. I know in the back of Wal Mart, for example, my cell reception is terrible. There are metal walls everywhere, thick metal shelves, and the back of the store is made of concrete and rebar. When I go into a store, I really expect my cell service to drop out. I expect a lot of people have the same expectation.

rosariom 15y ago

This is what I was kind of doing for books in Barnes and Noble: check the contents, read a few pages, then buy the e-book or physical book online. With this app it would make it super convenient to compare prices and order instantly after doing such a thing. I would imagine this will extend to clothing and other things, i.e. people will try the clothes and look at stuff in physical stores then order online if there is no rush to have the item. Who would have thought the online world would be such a force to reckon with?

jrockway 15y ago

I love this. Stores hate it when people do stuff like this, and that's what makes it so fun.

ineedtosleep 15y ago

This is exactly what I've done at Fry's (50% of the time as they match prices lots of times) and any of the bigger bookstores ever since I got 3G. I'm surprised Amazon, or any other online retailer, has come up with this strategy this late.

Florin_Andrei 15y ago
I feel no remorse doing this at Fry's. But at a place such as Books Inc. (your basic friendly neighborhood book store), well, I'd rather just buy it from the store. Borders is gone. If Books Inc goes too, downtown will be a much less interesting place.

freehunter 15y ago

Now when are they going to add this feature to their Windows Phone app? Windows Phone already has the capability built-in (through Bing Vision) to scan barcodes and price-match, but Amazon's app adds more features on top of that. Kinda ridiculous that they haven't added that to their app on this platform.

raganwald 15y ago

Retailers aren’t all lumbering behemoths being driven into extinction by online merchants. Many have figured out that they are actually running showrooms and charge the manufacturers rent for displaying their wares. Supermarkets have been playing this game for years, renting shelf space by the foot to people like Coca-Cola. Meanwhile, people like WalMart make a business out of logistics, they only carry stuff where they have a strong financial advantage. It’s not impossible, but it’s hard to beat their prices when you factor in shipping. It will be interesting to see how Amazon and WalMart match up against each other over the next decade. I wouldn’t be surprised if WalMart start displaying higher online prices right beside their merchandise in the store.

nitrogen 15y ago
I wouldn’t be surprised if WalMart start displaying higher online prices right beside their merchandise in the store. WalMart will compete if they are threatened. A new bargain supermarket moved into the area that puts price comparisons between them, WalMart, and the other local chains in its weekly flyers. In response, the local WalMart started putting signs up in the store showing their price and the competitor's price (and name) for items where WalMart is cheaper.
jader201 15y ago
Maybe not WalMart, but this is exactly what Best Buy has become for me. I love going into Best Buy, just to be surrounded by all the high tech goodness, but I never buy anything there. I go to check stuff out, then go home and jump online and order the same thing for 20% or more less from Amazon or Newegg.
- Jun8 15y ago
  I've got to say: This is the rational, homo economicus way that textbooks say buyers should behave and, to me, it's just terrible! You may find it pedantic, but I think that if BB provides a utility for you you should reward them. The same thing is happened to large bookstores, music stores, etc., people checked out the wares and then bought it online.

redthrowaway 15y ago

This is an ingenious move by Bezos & co. Not only do they train consumers to price-shop using Amazon (which usually beats brick & mortars), but they gain a treasure trove of information on their competitor's holiday pricing. I'd hate to be a competitor Amazon takes seriously.

mrpollo 15y ago

I was shopping for toys for my 4 year old this black friday, and I scanned a few of them ( if not all ) and the discounted toys where at the same price as Amazon. eg: Lego Train Set Store: $21.99 Amazon: $19.99 while the store price is marked as 20% off, and the Amazon price is marked as Prime, i went with Amazon Prime for the most part, the free shipping always wins for me, I wish this promotion was already active back then.

klinquist 15y ago

This is why stores should start offering free wifi - so they can see how much this is affecting their bottom line.

xer0 15y ago
But wouldn't the store have to be sniffing the actual content of the traffic? Not a great move if it got out, and I might just assume that's happening anyway and not use it.

harryf 15y ago

The problem here is this isn't a sustainable strategy long term. While Amazon has succeeded in killing the bookstore, this works because consumers are willing to accept "browsing" for books online. The same is not true for many other types of goods, such as clothes. Shops are performing a useful function in letting consumers see, touch and try what they buy. So what Amazon is doing here basically parasitical, but a smart parasite doesn't kill it's host. There's a reason why Jeff Bezos invested in SecondLife ( http://goo.gl/PluAT http://goo.gl/PluAT )...

tomkarlo 15y ago
Shops also enjoy _insane_ margins on clothing relative to any other retail line (except maybe cosmetics.) On average, 50% of the retail price is markup by the retailer. Clothing has a lot of issues that make in harder to sell (in particular, the need to carry a range of colors and sizes for each product makes inventory less efficient) but that's not enough to justify those kinds of margins. It's an industry ripe to be picked off by more efficient operators.
kyleslattery 15y ago
Zappos has just about solved this problem for me though. They realize that people want to try on shoes and clothes, and so they offer free shipping and free returns, and if you're a VIP member (just ask and they'll give it to you), everything ships with next day delivery. So, if I see a few pairs of shoes I like, I'll order them all, receive them the next day, and ship back the ones I don't like. It's great.
- cpeterso 15y ago
  What does Zappos do with returned shoes? Do they resell them at a discount? They must anticipate higher returns for shoes than online retailers selling books and music.
  - kyleslattery 15y ago
    I'm pretty sure they just restock them and sell them at the same price. They only accept returned shoes that are unused.

mquinlan 15y ago

It sounds gimmicky when you add on top of the 3 item, 2 day, and 5% off restrictions that it's only on select products and valid in select stores. Nice headline news, but shouldn't Amazon be looking to find people who'll become long-term users?

tghw 15y ago
This is finding long term users. It's getting people into the habit of checking Amazon's prices using their phones. Generally, Amazon is competitive enough that they can beat brick and mortar prices, especially when you take sales tax into account (in some states, at least). It's also trying to get people who don't normally shop online to try it out, under the assumption that once they do it a few times, they'll feel more comfortable doing it in the future.

vijayr 15y ago

Last weekend, I was at a used books shop. I saw a guy with some iphone app, checking the price of each and every book in the shop (there were lots of books for $1). The store people noticed, but didn't say anything, at least I didn't see them say anything. I bet they weren't happy about it. How long before we just place an order, online, in a centralized place, and pick one of these: cheapest fastest delivery highest quality or some combination of these, and the app finds the best place to order (amazon, walmart etc) and automatically places the order?

pyre 15y ago
I'll bet that guy was looking for steals as far as the $1 discount goes. He was checking the Amazon price to see what he could flip them for. There were a couple of stories like this about flea markets and such on HN a while back.
- vijayr 15y ago
  Probably. I wouldn't have noticed at all, except for the beep sound, every single time his phone read the barcode. He looked experienced in this, as he was going through 15-20 books a minute (never reading the title or anything, pick the book, read the barcode, check price, move on).
  - InnocentB 15y ago
    Slate ran an interesting article last year about this aspect of the used book market: http://www.slate.com/articles/arts/culturebox/2010/10/confessions_of_a_usedbook_salesman.single.html http://www.slate.com/articles/arts/culturebox/2010/10/confes...
droithomme 15y ago
Yeah, that guy was definitely a reseller. Shop didn't mind because he likely ends up buying some books at the price they have set. Logical result is that shopowners buy iphone ISBN scanner and start repricing according to online prices, or open their own online store.
15y ago

droithomme 15y ago

Very interesting move by amazon. No doubt the retaliation will be political in nature and focus on the unfairness of no sales tax, well the retaliation is already underway and lobbyists have been hired and working on this issue for some years now. I have always had a paper notebook I carry around with me. Sometimes I will be shopping for something and the local store will have many models but none on display and almost no information about features. Let's take BluRay players for example. The local store has about 30 models of these. A couple are on display but not plugged in. What is really important to me is the player not take 5 minutes to cue the movie because the processor is underpowered and the DRM on BluRay uses a complex scheme involving Java code and decrypting. I also want to know how the menus are arranged, because most remotes are infuriating to use and user interface is important. You would think this would be an ideal situation for brick and mortar because knowledgable sales clerks would be able to answer my questions and allow me to test the merchandise using the large screen TVs they have set up for the purpose. Alas, no. The era of sales clerks knowing accurate information about products ended many years ago. Such places can not be found. The era of being allowed to test things in store has likewise ended. So what I do is write down the model names of a half dozen of the most likely candidates and then go read online reviews to find if there are complaints about cuing speed. Finding out about the menu design is nearly impossible though unless I can find a pdf manual to download that comprehensively documents the menu structure (seldom the case). Having found the best product, I return to the brick and mortar store and purchase the item. What happens sometimes in these endeavors is a manager comes up to me and accuses me of being a "price checker" for the competition. He will tell me that the license that governs my entry to the store prohibits this and that I am now banned from the store and police will be called in the future. I assure him I am not a competitor's price checker, I am trying to get information about the product since his own people don't know anything. He is not interested. I am now banned from the store. So then I buy from amazon. If the product sucks I return it. This is an inefficient process, I would much rather buy locally but local merchants aren't hearing of it.

colanderman 15y ago
He will tell me that the license that governs my entry to the store prohibits this and that I am now banned from the store and police will be called in the future. That is absolutely hilarious. I'm suddenly eager to walk into random Best Buys and try this. If it doesn't work, I'll try purchasing something and leaving without stopping at the receipt checker.

oldgregg 15y ago

I think Amazon will eventually open a big box store. They won't carry any inventory-- just one copy of each item. You scan the items you want and choose shipping to your home or next-day pickup at the store. With so many big box stores shutting down the real estate will be cheap. And with no inventory turnover there would be relatively no employee overhead. If walmart has 100k SKUs an Amazon storefront could offer 250k SKUs. It would be massively disruptive for items that are more difficult to browse/evaluate online (read: clothing).

rscale 15y ago
Do you know if anybody has tried a showroom/ship model for those sorts of purchases at any scale? I've wanted to see somebody try the model for a while, because without testing I have trouble guessing the balance between 'get to see things in person' and 'still have to wait a day or three for delivery' and I'd love to see the results.
- eru 15y ago
  > Do you know if anybody has tried a showroom/ship model for those sorts of purchases at any scale? Britain's Argos comes to mind.
- freehunter 15y ago
  Sears does this in some locations. They'll have a small storefront with a low amount of inventory. Some best-selling products and seasonal products sit on the floor/shelves to be seen, there are product specialists working in the store who know the catalog, and you order what you're looking for. The employee will answer your questions, then the item gets shipped to the store or to your home. It's not a huge operation, but they do this in a lot of small towns across America, towns that can't support a full store but would still like the benefits of having a location to visit.
- wtracy 15y ago
  Dell was doing this at one point. I don't know whether they still do.
- 15y ago

hallman76 15y ago

Given Amazon's history of displaying different prices to different users, I wonder if they'll use this technology to optimize their prices to beat a specific competitor but perhaps not go as low as they could.

jrockway 15y ago
Amazon's prices are rarely the lowest.
jrabone 15y ago
Not this again. Amazon does not do this in the way that you imply. They try to have a single page for a given item (not always successfully). On that page, different users may see an offer for the SAME item from a DIFFERENT merchant - the price is set by the merchant, not Amazon. If you don't like it (and if there is a choice) click on the "N more used & new" link close to the buy button to see all the offers from various merchants. Amazon themselves DO NOT show different prices to different customers for the same item sold by the "primary" Amazon merchant. However, they also run a merchant called "Warehouse Deals" which is basically B-grade stock. Obviously this is cheaper, with limited availability. Disclaimer: ex-employee.

moocow01 15y ago

I really wonder how this will impact the commercial real estate market and if commercial real estate is an incredibly bad investment these days even at its current lows. As we all know, you have this obvious and unstoppable force of doing stuff now at home online. More and more people who used to go to stores now stay at home to shop and more and more people can perform their jobs via telecommuting rather than sitting in an office. Consequently, we have less and less need for commercial real estate space. My feeling is that in X years commercial real estate will be even more vastly under occupied and will only be occupied by services that cant be done online (restaurants, bars, night clubs, salon). Maybe as a result the expanding geographic human footprint on the earth will slow down a bit in that Walmart wont need be putting up its next super store.

amanfredi 15y ago

Handling delivery of packages is sill a major annoyance of online shopping. I love Amazon but consumer-side logistics could use some serious improvement. The drive to reduce shipping prices as much as possible has definite downsides. - Items consistently damaged/stolen during shipment. - Delivery of incorrect items/wrong address. - No place to leave packages during the day if you live in an apartment with no doorman. - Impossible to schedule delivery, especially before the first delivery attempt. It is unwise to order things while traveling. - Carriers lie about delivery attempts and times. - Distribution center for package pick up is 10 miles away and only open M-F 9-5.

CamperBob 15y ago
Idea: a site designed to build and maintain a trusted local network of people who are at home or work all day, and who will receive packages for you, for a small commission.
- nooneelse 15y ago
  So a PO Box that only charges when you get something? FedEx has a "Hold at Location" service.
  - CamperBob 15y ago
    Which is fine except when the location is 20 miles across town.
- Lazlo_Nibble 15y ago
  Amazon is already working with 7-11 to provide this service.
brk 15y ago
I've incurred some of these. The UPS or FedEx guy (or sometimes both) is at my house almost every day. We order a lot of stuff from Amazon, just general merchandise (Amazon Prime makes this a no-brainer), plus I order a lot of things for work. Rarely are things lost or damaged in shipment. It has happened, but so infrequently I can't remember the last time. The pre-signing for shipments is mostly solved, especially if you frequently deal with the same merchants. I'll put in the order notes to not require signature and call or email if this cannot be done. When ordering things from Apple, the send you a release form to sign in advance. Having a place to leave packages could be a problem for people in apartments I imaging, I don't have that issue. I've also had the carriers claim to attempt a delivery when they didn't (FedEx holiday fill-in person). For me, this isn't a big deal, I have security cameras covering all areas of my property (a unique case, I'm aware). The one time that happened the driver got to make a special trip back out to deliver my package a 7:30PM...

querulous 15y ago

How many people who use Amazon frequently work at home or have a spouse/partner at home during the day? I would love to use Amazon for the bulk of my purchases, but I can't take delivery at work and there is no one to receive packages at my home during the day. It's completely infeasible for me to use Amazon except for occaisonal orders where it is worth taking time to stay home or visit the UPS depot to actually receive my orders. Until Amazon solves this problem, they're not a serious competitor to traditional retail.

trapexit 15y ago
http://consumerist.com/2011/09/amazon-testing-locker-system-that-would-let-you-pick-up-your-package-at-7-11.html http://consumerist.com/2011/09/amazon-testing-locker-system-...
ghaff 15y ago
Depends where you live. With rare exceptions, for better of worse, shippers just leave packages at my door. (Or in the case of USPS hanging from my mailbox because the carrier doesn't want to take the time to drive down my driveway---grr.) Sometimes I have to sign a signature release form left on my door. But very rarely do I have to go to the post office or UPS depot, which I agree would be a real pain if I had to do it for every mail order purchase.
macinthebox2 15y ago
UPS has something called My Choice that lets you see when packages are arriving, schedule their delivery etc. There's supposedly a free version. http://www.ups.com/mychoice http://www.ups.com/mychoice

int3rnaut 15y ago

This is off topic but people are discussing Amazon and shipping so I figured I'd ask this here, because it's always confused me. Why do so many American based companies refuse to ship to Canada or limit what they do ship to Canada (Amazon, has Amazon.ca, but the selection is nothing compared to the .com, which does not ship to Canada)? It seems strange with things like NAFTA in place that companies would restrict their market power by eliminating a potential buying supply that for all intents and purposes is very similar (in terms of shipping costs, dollar value etc). So HN, what am I missing here?

throw_away 15y ago
I'm pretty sure that this is due to Canada's cultural protection laws, not US companies declining to take your money for some reason. this article talks about this a bit: http://www.theglobeandmail.com/globe-investor/amazon-given-green-light-to-set-up-shop-in-canada/article1532080/ http://www.theglobeandmail.com/globe-investor/amazon-given-g...

ck2 15y ago

I honestly don't know how Amazon stays in business, their customer service is almost too good, they are the anti-paypal. Just today I wrote them a detailed email about a problem I had with a product I bought and was expecting instructions on how to return it, etc. - instead they just refunded the whole purchase price and told me to keep it. Kinda blew my mind.