Amazon has sparked off an argument with retailers thanks to its price check application that offers discounts to consumers that use the app between 9th-10th of December – letting Amazon undercut everyone and get some free market research too.
The retail giant claims that this is designed to offer consumers the best chance to find products at the best price. However, other companies are crying foul, saying that this is a way for Amazon to freely price check its competitors and steal their business away.
The Telegraph quotes the American Retail Industry Leaders Association, which points out that Amazon’s tax code breaks give it an unfair advantage in situations like this. “Retailers compete on price 365 days a year, and at no time is that competition hotter than during the make-or-break holiday shopping season. However, by continuing to evade collecting state sales taxes, Amazon’s exploitation of a pre-Internet tax loophole is resulting in a 6-10 per cent perceived price advantage over their competitors on Main Street.”
Some consider this move by Amazon to be the greatest threat to in-store sales, something that people are hoping to revive in a struggling world economy. Of course the retail giant doesn’t see it that way though, saying that it hopes to change the way people shop – allowing them to find the absolute best deals when they want to buy something. Amazon has said before that it wants to have the largest possible customer base, with small margins.
Not everyone considers this as a bad thing though, with WallMart joining the online retailer by creating its own price-check application.
It’s thought that the Amazon app will be rolled out the world over in the coming weeks, increasing potential profit for the firm but significantly growing its opposition, with more questioning whether schemes like this are too open for exploitation.
For consumers of course, this is a bonus in terms of saving every single cent, but does it improve the shopping experience? Many people lament the loss of family owned stores that did more than just provide a cheaper or faster service. They offered personality and individual attention. The ‘mom and pop’ DVD rental stores might pick out titles that you would like, or the old book and music stores would offer something different depending on which one you wandered in to.
While no one can complain about a cheaper price tag, it certainly is necessary to consider what cost consumers are actually paying for saving a few more pennies per transaction.
Amazon has been in the news a lot recently because of the Kindle Fire tablet, but it’s also been targeted by current Waterstones head James Daunt. He’s been quoted as saying the company is a “ruthless, money making devil” and that he considers the computer screen a “terrible environment in which to select books.” He also detailed Waterstones’ plans to develop itself into a modern retailer that could compete with companies like Amazon, while still maintaining a book store feel.
I think it’s obvious which side of the price check argument Mr Daunt would come down on.Leave a comment on this article