Retailers Fume Over Amazon’s Price Check App

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AMZN: Amazon logo
AMZN
Amazon

Use retailers as sh0wrooms to scan products, then make consumers shop on the app while giving a hefty discount. [1] It is this price penetration strategy by Amazon (NASDAQ:AMZN) that is making retailers see red. Amazon competes in the e-commerce space with companies like eBay (NASDAQ:EBAY).

Our $233 price estimate for Amazon stock is about 18% above market price.

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Customer Incentive: Comparison Shopping and Up to 15% Discounts

Comparison shopping is a relatively new and exciting feature in mobile commerce with companies like eBay also launching a RedLaser app to quickly compare product prices using a bar-code scanner. Amazon does a similar thing with its Price Check app, enabling users to check product prices while in a physical retail store.

However, Amazon is also using a disruptive price strategy for promoting the Price Check, offering up to $15 in discounts to customers who download and enable the app on 10th December. E-commerce sales as a percentage of total retail sales in the U.S. is steadily rising, and physical retailers are justifiably worried with Amazon’s latest tool will shrink the physical retailer market share further. For now, advocacy groups have expressed displeasure over this development, [2] but it remains to be seen whether or not Amazon can invite some real punitive action over the Price Check.

Source: eMarketer

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Notes:
  1. Bloomberg Businessweek: Amazon Lures Shoppers Away from Stores with New App []
  2. AMIBA: Amazon Inc. Hits a New Low: Recruits Customers to Spy on Competitors []