Amazon Price Comparison App Aims At Brick-and-Mortar Stores

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Amazon will use the iPhone as a vehicle for snagging more business from brick-and-mortar stores this holiday season. With the company's new price comparison app for the iPhone launched Monday, users can scan a product barcode, snap a picture of an item, or say a product's name to find out if they can get a better deal from Amazon.

If they choose to go with Amazon, they can then make a purchase directly through the Price Check app and have it delivered to their home. That's a clever way to try to take sales away from physical store rivals while shoppers are strolling down their aisles.

"For example, a customer may be shopping for a toy in a toy store and decide to compare the in-store price of the item to Amazon.com and other online merchants using Price Check," explains Amazon in its announcement. But the third-party merchants online are limited to those that sell through Amazon.

That's not the same as a popular app like Red Laser, acquired by eBay in June, which lets users scan a product barcode to compare pricing and stock across multiple online and physical stores. Amazon's new app is essentially comparing its own pricing against that of the store someone is shopping at.

"While we love the search and quick purchase options, the [Amazon] ultimately isn't that useful because it only allows users to compare a single store price with the prices of Amazon and its sellers," noted Mashable. Once someone has already decided to brave the holiday crush by heading to a local store, there's also a question of how often they would forgo an immediate purchase for a better price on Amazon.

The most likely instance for opting for Amazon would be where an item was out of stock and a shopper could use the Price Check to say the product name to find out if was available through the online retail giant. Or where the price difference was big enough to switch to Amazon despite adding in any shipping costs.

A report from research firm IDC Monday revealed that smartphones are changing consumer behavior. It found more than one-third of smartphone-carrying consumers (who represent 24% of all U.S. consumers) "are ready to use their mobile devices in ways that transform how they shop everywhere, and in particular, how they shop in retail stores." That includes searching for price and product information, comparing prices at nearby stores, and buying things.

IDC projected that mobile-shopping "warriors" and "warrior wannabes" will account for 28% or $127 billion of the $447 billion the National Retail Federation (NRF) estimates U.S. consumers will spend this holiday season. Amazon itself said in its second-quarter earnings report in July that its mobile sales had surpassed $1 billion during the prior 12 months.

Brick-and-mortar retailers have released their own apps to take advantage of the smartphone explosion and aid in-store shopping. That includes major chains and department stores such as Target, which Monday was named "2010 Mobile Retailer of the Year" by Mobile Commerce Daily, Best Buy, JCPenney and Nordstrom.

Julie Ask, a mobile analyst at Forrester Research, noted that Amazon and Best Buy -- which finished second and third behind Target as top retailer of 2010 -- may actually have an edge when it comes to having more mobile-savvy customers.

"Both sell a lot of products that fall into the sweet spot for mobile -- consumer electronics (one of the top activities for consumers on mobile devices around commerce is price comparisons -- especially in the CE category) and books/DVDs," she wrote in a blog post Monday. By creating an app patterned after customers' mobile habits, Amazon is hoping to drive mobile revenues even higher.

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