Amazon’s Killer Price Check App

Amazon recently has stirred controversy with its new app, Price Check. The app allows consumers to scan bar codes in local stores and compare prices directly to items sold at Amazon with the benefit of purchasing it immediately. Few days back Amazon gave users discounts of up to 5% when using the app on some items. Many have argued that the app gives the online giant an unfair advantage over its smaller competitors. Brick and mortars were and continue to be furious, but Amazon maintains it actually helps small businesses.

Retail trade groups denounced the offer, saying it unfairly encouraged shoppers to check products at stores and then buy them online. Sen. Olympia Snowe, R-Maine, entered the fray, calling the promotion “anti-competitive” and “an attack on Main Street businesses that employ workers in our communities.” Amazon defended the device as pro-consumer and not anti-small business. Snowe urged Amazon to stop the promotion being offered last week. “Small businesses are fighting every day to compete with giant retailers, such as Amazon, and incentivizing consumers to spy on local shops is a bridge too far,” she said in a statement.

A spokesman for the Alliance for Main Street Fairness said “no retailer can compete” with Amazon because as an online retailer, the company is not required to collect sales taxes in many states. The Retail Industry Leaders Association, which represents many big-box retail chains, said the app unfairly encourages shoppers to use bricks-and-mortar shops as “showrooms” to check out a product before buying online.

In its defense, Amazon said that the app is mostly intended for shoppers who want to compare prices at major retail chains. The app also features prices from third-party sellers including more than 2 million businesses of all sizes that sell through its website. “The goal of the Price Check app is to make it as easy as possible for customers to access product information, pricing information and customer reviews, just as they would on the Web,” the company said in a statement.

Last but not least, according to Forbes contributor, Tim Worstall, the promotion of the app – which gives customers $5 off purchases made through the Price Check app up to $15, is a clever strategy for gathering price data. The cost of collecting this information has now been loaded onto the shoulders of Amazon’s customers instead of Amazon’s employees. And this is one of the great games of the modern era.

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