What Amazon is hiding. . .
Amazon’s barcode scanning application is proof positive that Amazon doesn’t want consumers to be able to compare their prices with other local and online retailers. Last year Amazon invited me to Seattle to demonstrate our barcode scanning, price comparison and scanner apps for iphone – ShopSavvy. The conference room was completely full. They loved the application and at one point one of the executives in the room asked, “Would you be interested in selling?” I immediately responded, “Yes.”
Over the next hour the balance of the room began debating whether or not ShopSavvy would be a good fit. Their concern? The fact that prices from other retailers were in the scan application. They asked if we could restrict prices from competitors. I laughed thinking they were joking, “Um, this is a price COMPARISON application.” I questioned the value of ShopSavvy if it ONLY displayed Amazon prices. The value of ShopSavvy, I explained, was that we could be a neutral provider of prices from all online and local retailers. Paul Graham, head of Amazon’s mobile strategy, gave me a wink and at the time I didn’t know it, but he was planning to prevent ALL mobile applications (including ShopSavvy) from accessing Amazon’s prices.
For 10 years Amazon has shared their prices using their wildly successful Associates program with thousands of websites, but for some reason Amazon is scared to death that mobile users armed applications like ShopSavvy will realize their diry little secret. What secret you ask? That their prices aren’t competitive. How do I know? Our users scan between 600,000 and 1,000,000 items each day – 94% of the time Amazon’s prices are higher than other online retailers. 80% of the time they aren’t even in the top three. 30% of the time local retailers (i.e. brick and mortar stores) have better prices. Ouch. Who knew?
94% of the time Amazon’s prices are higher!
Amazon is an amazing retailer. Their value? They have almost every item people scan. That is something no other retailer, with the exception of Walmart, can boast. So if you are looking for a book or DVD and you are sitting at your computer you are likely to go to Amazon first – Amazon depends on this. They don’t depend on being the price leader. Users armed with scanner apps for iphone like ShopSavvy are more likely to discover prices before retailers – this is what Amazon doesn’t want you to see. In any event, I am baised, but I really do believe their scan app sucks. Here are just a few things that bother me:
To conclude, I think the application will be successful – because Amazon is a beast. I don’t think the application competes with ShopSavvy – hopefully you agree. Love your thoughts on this…