Amazon.com Targets In-Store Buyers With Price-Comparison Tools

Amazon.com Inc., the largest e- commerce company, has a new way to target traditional retailers this holiday season. Its weapon: the mobile phone.

Amazon introduced an application for Apple Inc.’s iPhone today that lets shoppers compare prices of items in stores with the same products from Amazon, the Seattle-based company said in an e-mailed statement.

Mobile-phone transactions will quadruple to $16 billion in the U.S. this year, says market researcher Aite Group, opening up new ways for online retailers to siphon off consumers as they stand in competitors’ stores. Using smartphone technology that can decipher images and read barcodes, Amazon is trying to entice shoppers in retailers’ aisles with free shipping and lower prices on the same items.

“If you’re a pure-play e-commerce company, you want people to go to these stores and pull out their app and get a better price,” said Dave Sikora, chief executive officer at Digby, an Austin, Texas-based company that helps retailers with their mobile strategies. “The retailers are an off-balance-sheet showroom for those guys.”

With Amazon’s app, shoppers can scan the barcodes of products they see in stores or take pictures of them and get an instant price comparison -- with the option to buy. They also can speak or type in a description of the item.

“When you’re out holiday shopping and want to check the price on an item, we’ve made it super easy to find it on Amazon and get the pricing,” said Sam Hall, director of Amazon mobile.

Amazon rose 65 cents to $164.82 in Nasdaq Stock Market trading on Nov. 19. The shares have gained 23 percent this year.

Price Comparisons

Amazon has a price-comparison feature in an older version of its mobile app that lets consumers scan barcodes of products and buy them. The new Price Check by Amazon app is the first that’s custom-built for price shopping -- from the graphic design to the four different ways consumers can input data, Hall said. He declined to say whether or when the app would be available on other types of phones.

Online retailers, led by Amazon, are increasingly taking business from traditional stores, according to Forrester Research Inc. This year, online sales in the U.S. will rise to $172.9 billion, or 7 percent of total retail sales, from $155.2 billion, or 6 percent, last year, Forrester estimates.

The tactics employed by Amazon may harken back to the early days of online advertising, when rivals would buy each other’s names as keywords on search engines to lure consumers searching for competitors into their sites.

“This isn’t the first time you’ve gotten a retailer trying to get in front of another retailer’s customers,” said Blake Scholl, co-founder of Kima Labs Inc. in San Francisco, maker of the mobile-shopping app Barcode Hero. “It just hasn’t happened in the store before.”

To contact the reporter on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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