Amazon Will Pay Shoppers $5 to Walk Out of Stores Empty-Handed | Hacker News Reader

Amazon Will Pay Shoppers $5 to Walk Out of Stores Empty-Handed

allthingsd.com

108 points8bitliving133 comments

Retailers aren’t all lumbering behemoths being driven into extinction by online merchants. Many have figured out that they are actually running showrooms and charge the manufacturers rent for displaying their wares. Supermarkets have been playing this game for years, renting shelf space by the foot to people like Coca-Cola.

Meanwhile, people like WalMart make a business out of logistics, they only carry stuff where they have a strong financial advantage. It’s not impossible, but it’s hard to beat their prices when you factor in shipping.

It will be interesting to see how Amazon and WalMart match up against each other over the next decade. I wouldn’t be surprised if WalMart start displaying higher online prices right beside their merchandise in the store.

I wouldn’t be surprised if WalMart start displaying higher online prices right beside their merchandise in the store.

WalMart will compete if they are threatened. A new bargain supermarket moved into the area that puts price comparisons between them, WalMart, and the other local chains in its weekly flyers. In response, the local WalMart started putting signs up in the store showing their price and the competitor's price (and name) for items where WalMart is cheaper.

Maybe not WalMart, but this is exactly what Best Buy has become for me. I love going into Best Buy, just to be surrounded by all the high tech goodness, but I never buy anything there. I go to check stuff out, then go home and jump online and order the same thing for 20% or more less from Amazon or Newegg.

I've got to say: This is the rational, homo economicus way that textbooks say buyers should behave and, to me, it's just terrible! You may find it pedantic, but I think that if BB provides a utility for you you should reward them. The same thing is happened to large bookstores, music stores, etc., people checked out the wares and then bought it online.

Part of me agrees with what you're saying, and in some cases, I do acknowledge this and try to give business to those that truly provide a valuable service to me.

However, in the case of BB, I'm less inclined to reward them, as I feel they -- in a lot of cases -- take advantage of uneducated customers, and gouge them with certain lines of products. Cables (Monster cables are the worst) being a prime example of this, where they sell cables at a cost sometimes 25-50 times that you can get almost anywhere online (selling a $3 cable for $100).

I don't want this to turn into a discussion about specific stores or products, just using that as an example of why some retailers have lost the respect of some of the more educated consumers. Business is one thing, but taking advantage of the uneducated is another.

But again, I do agree with you about the general notion of giving business to those that provide a valuable service to you.

This seems like a rationalization for me. I too dislike BB's tactics, but instead of using them as a free showroom, I just avoid them. I will give nothing to them, but neither will I take anything from them.

I had a very pleasant experience the two times I went to best buy: once to get a phone plan (the guy at the counter saved us good money by suggesting a nice text plan I hadn't come across during my research).

The next time I bought three big appliances: knowledgeable saleslady who smartly realized that I'd done my homework. Didn't waste my time; didn't try to upsell, gave honest opinions on diffs between brands.

I'd go there again. And oh, I order lots of stuff from Amazon Prime too.

Yeah, I stopped shopping at Best Buy for this reason. All they sell for accessories now is their two in-house brands and Monster, all of which are stupidly marked up.

I don't mind using Best Buy as a show room when they seem to have plenty of customers unwilling to do a simple google comparison shop before they leave for the store.

As long as wireless routers and HDMI cables continue to be foreign concepts to most consumers, brick and mortars like Best Buy will stick around.

I recently went into a retail store to purchase a laptop - I had to buy one and didn't give myself enough time for purchasing online.

I asked the assistant which ones had a SSD drive - she told me they all did. 'All of them?' I asked. 'Oh yes, she said'.

I smiled and walked out. I'm sure she thought I meant 'hard drive' and used a funny word for it, but if you're selling laptops and don't know what SSD means - well, what's the point of shopping there?

Similar story I can't help share.

I went into Home Depot and asked for a piece of two by four to be cut to 38 7/8" length. The guy doing the cutting had to come and ask me what exactly 7/8ths of an inch looked like on a tape measure. It's the really small tick marks, right? I told him the really small ones are 16ths, and pointed to where the tape needed to go for 38 7/8". You can bet I measured that piece of wood after he'd cut it.

It's not terrible. If Best Buy wants compensation for a service they provide, they should charge for it. It's that simple.

Don't fool yourself into believing that Best Buy deserves success because they are useful. You don't owe Best Buy anything. Best Buy does not care about you. Best Buy is not your friend. Best Buy is a business and should be treated as such.

I understand and you are of course right. Here's the question, though: what if everyone does what I do, i.e. look at the store and then buy from Amazon, etc? Isn't this the tragedy of the commons? Then BB will close (like Borders) or would have to radically adapt (like B&N, who currently carry half books half toys in most stores).

Luckily for all of us who enjoy perusing BB, they are (currently at least) avoiding both fates since (i) they are pretty much the monopoly in electronics stores and (ii) there are a lot of customers lazy or clueless enough to just buy their stuff there rather than online.

Then either BB will start charging an entrance fee, or they will start charging the manufacturers display fees. At that point they can reduce their prices to about that of online shopping (since you have the value added of being able to purchase the product immediately, but your time spent driving plus gas plus maintenance costs more than shipping).

I don't think he's saying they deserve success. Rather, that if you want them to still exist in the future, you should buy from that.

You could say this about any unprofitable business. It's the business's job to offer transactions to each individual customer that aggregate to the positive for the business. It's not my job to provide corporate welfare to ailing Best Buy.

You could use the same logic to criticize a listener for not buying a bad album from their favorite band.

Heck, even I waited until the price drop on Amazon MP3 to buy The Roots' new album today. (it was $8 last night)

We don't actually disagree. I'm just pointing out the consequences. There are instances where I buy things based on those consequences as opposed to what was best for me.

What shipping? Amazon ships for free on any decent-sized ($25+) order.

I'm skeptical that Walmart can really beat Amazon via logistics. They're both top-notch operators in that realm, but Amazon's product pipeline is a huge advantage - they don't have to manage nearly as many locations, nor do they have to hold as much inventory relative to sales volumes because they have fewer fulfillment centers.

And their Subscribe and Save program (which offers a 15% discount on common household products) is aimed directly at Walmart and the price clubs. (http://www.amazon.com/gp/subscribe-and-save/details/index.ht...)

You have to pay for shipping one way or another -- whether it's explicitly, or in the form of higher prices. It's not really free.

By that measure, you pay for shipping at Walmart, too. The goods don't magically arrive at the store.

But Wal Mart's shipping can be much cheaper due to their predetermined, set routes. A truck is going to that store every night regardless of what is on it. They often offer free shipping to the store because the marginal cost to them for putting one more box on a truck is negligible.

Amazon's shipping has fewer nodes in its graph. And the truck they use goes to your house every day: it just has UPS on the side.

Transport is just one part of shipping costs. Handling, inventory time and other operations overhead are also a factor.

Unless you've arranged to live within walking distance to a Walmart, you've got to get there one way or another; by buying gas and driving, or by taking the bus subsidized by the local municipality.

Seems to me like UPS (or whoever delivers for Amazon) also has predetermined set routes. Also, just because marginal cost is zero doesn't mean cost to shipping customer is zero.

Amazon has to ship its merchandise twice: first to their distribution centers, then to the customer.

Everyone has to use distribution centers and ship things multiple times - items come from Asia in shipping containers, which you have to break up and load into trucks, since individual stores don't stock inventory in amounts that large. Walmart has an extensive network of warehouses around the country that receive goods before they're shipped to the retail locations.

Additionally, given the lag on orders of new inventory from overseas (which can be months), Walmart and other retailers have to maintain a pool of merchandise here in the US that they can ship to individual store locations based on local demand to replenish inventory.

The dollar value of shipping isn't the only cost - 2+ days is a long time to wait and Wal-Mart is only a couple of miles away. Some things can wait and you can plan ahead to account for shipping times, but not everything can be planned for and sometimes you just want or need something tonight.

Weekends are especially bad - once Thursday afternoon passes, you're probably not going to get what you order until Tuesday or Wednesday.

Fair enough, if you live close to a Walmart (and I know many do.) Personally, I find the 2 day wait is generally a reasonable trade for being able to order from my iPhone wherever I am, saving me an hour of driving to Walmart, going in and driving back. Moving errands from time blockers to parallel processes is a win in my view.

This is exactly what I love about Prime. Need something? Take 3 minutes to go online and order it. Then forget about it. It will come in a few days and requires no mental overhead (i.e. "remember to buy X at the market next time") in the mean time.

Of course, the "free shipping" takes a lot longer (sometimes a week longer) than even their standard shipping. If you want free shipping that takes place reliably quickly, you have to sign up for Amazon Prime, at which point free shipping is no longer free.

If you amortize it over a year, compare it to the cost of driving to a store and include the cost of free streaming videos then Prime is virtually free.

Prime's about what, $7 a month? Each mile I drive costs $0.20 in gas. If having Prime saves me just half an hour / 35 mi of driving a month (less than two trips to Walmart), it's cheaper than going to the store.

Walmart makes special deals with those they buy from. It's more like Walmart tells them what the price is. I don't think Amazon has that kind of leverage.

...yet ;-)

To a certain extent Amazon does; they wield a lot of clout in book pricing and an enormous amount in ebook pricing. Outside that traditional core competency (and Amazon Android Appstore) not so much

"people like WalMart make a business out of logistics, they only carry stuff where they have a strong financial advantage. It’s not impossible, but it’s hard to beat their prices when you factor in shipping."

Exactly and true except for long tail items.

In theory if you take an item and stock, arbitrarily 500 of it in a Walmart you only have the cost to ship 500 in bulk to the Walmart. The customer costs zero to come and pick it up (and they don't factor their time into the equation either). Intuitively that has to be much cheaper than using UPS or Fedex to have a driver stop off at 500 different places. Just like it would be cheaper to have everyone pick up their mail at the post office. Walmart is in essence an efficient warehouse.

And it doesn't matter who pays either it's a cost that someone has to bear. One way or another someone is paying for the delivery to the end user if the item isn't being picked up.

I hope you're right and they find better revenue models. I would hate for all these "showrooms" we have to go extinct. Could the day come where you pay an entrance fee to browse the latest gadgets at your nearest BestBuy "showroom"?

I doubt if they'll go extinct. As others have noted, they're already getting various coop marketing and placement dollars from manufacturers. And the fact is that they make a lot better margin on accessories and largely bogus warranties than on the big electronics purchases in any case. Add impulse purchases like games and it's hard to see them all going away although they'll doubtless continue to evolve.

Apple notwithstanding, it's generally way too expensive for manufacturers to setup their own showrooms. So they pretty much need some sort of shared space.

(On the other hand, just because it's in individual manufacturers' interests to have a widespread Best Buy sort of store, doesn't guarantee that they'll continue to exist.)

True enough, Best Buy will probably not go extinct. However, this type of thing is so unbelievably damaging to mom-and-pop retail operations who do not have the buying power/leverage with manufacturers that a giant like Best Buy has. If I owned a mom-and-pop place like my parents, I would immediately investigate how I could jam cell signal in my shop. There is no way in hell I would let a customer in to just try some jeans on, watch them scan the price tag, and walk out the door with five extra bucks from Amazon without buying my product.

Also, I think Costco has an advantage because they get custom packaging/bundles for a lot of their products. It's the one place I often can't scan the barcode with Amazon's app.

That is all fine and dandy, but what about locally owned retail operations that simply do not have the reach/power/leverage of a place like Wal-Mart? Do you think that LG would pay "Billy Bob's TV and Appliance" to display its televisions in his store?

Probably not, but why would I even go to Billy Bob's when I can go to Best Buy? And if there are only Billy Bob type stores around, then maybe LG would pay Billy Bob if he had the most traffic in the area.

Perhaps you had a better experience at the local place. Maybe they had a more knowledgeable sales staff that was able to articulate well the benefits of one piece of equipment versus another. There are as many reasons that you would have a good experience there as there are reasons you had a good experience at Best Buy. My point was that because Best Buy has such enormous power with their suppliers, they are in a significantly better position to bargain with those suppliers than a local shop. I would presume it would be pretty difficult for any local shop owner to convince a distributor of name-brand merchandise to pay them to stock those products on their shelves, simply because the buying power of a local shop is not that of Best Buy.

Really, the local operations are getting hit from all angles - online, big box, etc. To me, as the offspring of local business owners, that is disheartening. Like I keep saying throughout this comment thread, it is just a sad thing to watch all of the great little places in your area get driven out of business because of such vicious competition. I am not advocating any kind of corporate welfare here, but when you shop locally, more of your money stays in your area. I invite you to check this out: http://www.localfirstaz.com/local/index.php

Very interesting move by amazon. No doubt the retaliation will be political in nature and focus on the unfairness of no sales tax, well the retaliation is already underway and lobbyists have been hired and working on this issue for some years now.

I have always had a paper notebook I carry around with me. Sometimes I will be shopping for something and the local store will have many models but none on display and almost no information about features. Let's take BluRay players for example. The local store has about 30 models of these. A couple are on display but not plugged in. What is really important to me is the player not take 5 minutes to cue the movie because the processor is underpowered and the DRM on BluRay uses a complex scheme involving Java code and decrypting. I also want to know how the menus are arranged, because most remotes are infuriating to use and user interface is important. You would think this would be an ideal situation for brick and mortar because knowledgable sales clerks would be able to answer my questions and allow me to test the merchandise using the large screen TVs they have set up for the purpose. Alas, no. The era of sales clerks knowing accurate information about products ended many years ago. Such places can not be found. The era of being allowed to test things in store has likewise ended.

So what I do is write down the model names of a half dozen of the most likely candidates and then go read online reviews to find if there are complaints about cuing speed. Finding out about the menu design is nearly impossible though unless I can find a pdf manual to download that comprehensively documents the menu structure (seldom the case). Having found the best product, I return to the brick and mortar store and purchase the item.

What happens sometimes in these endeavors is a manager comes up to me and accuses me of being a "price checker" for the competition. He will tell me that the license that governs my entry to the store prohibits this and that I am now banned from the store and police will be called in the future.

I assure him I am not a competitor's price checker, I am trying to get information about the product since his own people don't know anything. He is not interested. I am now banned from the store.

So then I buy from amazon. If the product sucks I return it. This is an inefficient process, I would much rather buy locally but local merchants aren't hearing of it.

He will tell me that the license that governs my entry to the store prohibits this and that I am now banned from the store and police will be called in the future.

That is absolutely hilarious. I'm suddenly eager to walk into random Best Buys and try this. If it doesn't work, I'll try purchasing something and leaving without stopping at the receipt checker.

This is an ingenious move by Bezos & co. Not only do they train consumers to price-shop using Amazon (which usually beats brick & mortars), but they gain a treasure trove of information on their competitor's holiday pricing.

I'd hate to be a competitor Amazon takes seriously.

I think Amazon will eventually open a big box store. They won't carry any inventory-- just one copy of each item. You scan the items you want and choose shipping to your home or next-day pickup at the store. With so many big box stores shutting down the real estate will be cheap. And with no inventory turnover there would be relatively no employee overhead. If walmart has 100k SKUs an Amazon storefront could offer 250k SKUs. It would be massively disruptive for items that are more difficult to browse/evaluate online (read: clothing).

Do you know if anybody has tried a showroom/ship model for those sorts of purchases at any scale?

I've wanted to see somebody try the model for a while, because without testing I have trouble guessing the balance between 'get to see things in person' and 'still have to wait a day or three for delivery' and I'd love to see the results.

> Do you know if anybody has tried a showroom/ship model for those sorts of purchases at any scale?

Britain's Argos comes to mind.

Sears does this in some locations. They'll have a small storefront with a low amount of inventory. Some best-selling products and seasonal products sit on the floor/shelves to be seen, there are product specialists working in the store who know the catalog, and you order what you're looking for. The employee will answer your questions, then the item gets shipped to the store or to your home.

It's not a huge operation, but they do this in a lot of small towns across America, towns that can't support a full store but would still like the benefits of having a location to visit.

Dell was doing this at one point. I don't know whether they still do.

I think the Danish furniture retailer Bolia works like that. They have showrooms you can visit but to actually purchase anything you go to the website, either when you get home or from a kiosk in the shop.

[ edit: spelling ]

A lot of the focus of Sony's stores seemed to be on the showroom aspect though I haven't been in since the one in the Metreon in SF closed. And I imagine it worked better for Sony when they were better regarded as a style and technology trendsetter. In general, a consumer electronics manufacturer would be more presumably be more than happy to sell you something at the showroom--especially at full list price. There's no real reason not to. (If they discount they could get into conflicts with their distributors but that's not much of an issue so long as you're not discounting.)

Tesco tried out a grocery store version of this: http://www.designboom.com/weblog/cat/16/view/15557/tesco-vir...

It seems like most shoppers want the immediate gratification of getting their stuff right away so I think it is hard to find the right mix of products.

Why does Amazon need to open retail stores? The stores where you can examine Amazon products already exist, they're just called Best Buy, Target, Wal-Mart, etc.

The employees of those stores have very little training on the individual products they sale. I observed a Best Buy employee answer some questions about a Kindle Touch, which he didn't seem at all confident on. For example, he told them that he "thought" you could upgrade the With Offers model to remove the ads for an extra $30.

There have been some efforts by manufacturers to have product specialists in individual stores. It's never taken off on a large scale; I'm guessing the economics don't work. With cameras, at a store like B&H, you do see employees who are at least nominally more knowledgable about specific brands and won't, in fact, give you opinions between brands. And large photo stores often have days when manufacturers' reps are on hand to answer questions. Of course, this sort of model is far more the exception than the rule. Sales specialists are expensive and it's hard to justify them on low-margin consumer items.

I moved and haven't been down there in about 8 years now, but at the Home Depot I used to deal with, periodically a representative from DeWalt would stop in and do demos and answer questions about their tools.

Because Amazon can't tell you went there (unless you use their iPhone app), and therefore there can't be a financial support passing from Amazon to the store. Of course, Amazon doesn't need to open its own Amazon-branded stores; they could just make an agreement with Best Buy or whoever. The key idea would be integration of the Amazon purchase system with the physical store.

Under current tax laws they would most likely only do this in states where they already have shipping centers (Nevada and ...?) because opening such a store would create a nexus, requiring them to collect use taxes on all of their online sales to the state where the store is located.

On the other hand, the problem of collecting those taxes when the customer ordered in the show-room is vastly easier than the burden they would face trying to collect taxes from online shoppers. Online, they would have to figure out where the order is from (not hard with browser location these days), and then have a way to figure all the taxes due from various types of transactions at any point on the map. With a show-room, they can pre-figure the rates for just the show-room locations like every other store does. It isn't a "have a solution for any arbitrary point on the map" problem anymore, thus is much more tractable and less expensive to solve.

Of course, the smart shopper then puts together a wishlist in the store, and clicks buy on their phone out in the parking lot.

So, then, that's more of a showroom than a "store".

With only one of each item, it sounds a little like the eBay store in "40 Year Old Virgin". "I want to buy it now. I have money..."

Handling delivery of packages is sill a major annoyance of online shopping. I love Amazon but consumer-side logistics could use some serious improvement. The drive to reduce shipping prices as much as possible has definite downsides.

- Items consistently damaged/stolen during shipment. - Delivery of incorrect items/wrong address. - No place to leave packages during the day if you live in an apartment with no doorman. - Impossible to schedule delivery, especially before the first delivery attempt. It is unwise to order things while traveling. - Carriers lie about delivery attempts and times. - Distribution center for package pick up is 10 miles away and only open M-F 9-5.

Idea: a site designed to build and maintain a trusted local network of people who are at home or work all day, and who will receive packages for you, for a small commission.

So a PO Box that only charges when you get something? FedEx has a "Hold at Location" service.

Which is fine except when the location is 20 miles across town.

Amazon is already working with 7-11 to provide this service.

I've incurred some of these. The UPS or FedEx guy (or sometimes both) is at my house almost every day. We order a lot of stuff from Amazon, just general merchandise (Amazon Prime makes this a no-brainer), plus I order a lot of things for work.

Rarely are things lost or damaged in shipment. It has happened, but so infrequently I can't remember the last time.

The pre-signing for shipments is mostly solved, especially if you frequently deal with the same merchants. I'll put in the order notes to not require signature and call or email if this cannot be done. When ordering things from Apple, the send you a release form to sign in advance.

Having a place to leave packages could be a problem for people in apartments I imaging, I don't have that issue.

I've also had the carriers claim to attempt a delivery when they didn't (FedEx holiday fill-in person). For me, this isn't a big deal, I have security cameras covering all areas of my property (a unique case, I'm aware). The one time that happened the driver got to make a special trip back out to deliver my package a 7:30PM...

I honestly don't know how Amazon stays in business, their customer service is almost too good, they are the anti-paypal.

Just today I wrote them a detailed email about a problem I had with a product I bought and was expecting instructions on how to return it, etc. - instead they just refunded the whole purchase price and told me to keep it. Kinda blew my mind.

The problem here is this isn't a sustainable strategy long term. While Amazon has succeeded in killing the bookstore, this works because consumers are willing to accept "browsing" for books online.

The same is not true for many other types of goods, such as clothes. Shops are performing a useful function in letting consumers see, touch and try what they buy. So what Amazon is doing here basically parasitical, but a smart parasite doesn't kill it's host.

There's a reason why Jeff Bezos invested in SecondLife ( http://goo.gl/PluAT )...

Shops also enjoy _insane_ margins on clothing relative to any other retail line (except maybe cosmetics.) On average, 50% of the retail price is markup by the retailer. Clothing has a lot of issues that make in harder to sell (in particular, the need to carry a range of colors and sizes for each product makes inventory less efficient) but that's not enough to justify those kinds of margins. It's an industry ripe to be picked off by more efficient operators.

Zappos has just about solved this problem for me though. They realize that people want to try on shoes and clothes, and so they offer free shipping and free returns, and if you're a VIP member (just ask and they'll give it to you), everything ships with next day delivery. So, if I see a few pairs of shoes I like, I'll order them all, receive them the next day, and ship back the ones I don't like. It's great.

What does Zappos do with returned shoes? Do they resell them at a discount? They must anticipate higher returns for shoes than online retailers selling books and music.

I'm pretty sure they just restock them and sell them at the same price. They only accept returned shoes that are unused.

There's a lot of innovation in technology for online fitting of shoes and clothes.

There's a company using the kinect to create a virtual mirror so you can see how clothes will look on you. There's a company that asks you the model and size of a shoe that fitted you great ,and enables you find great fitting shoes online.There's a similar company for jeans. There's a company that ask you a few measurements and show you how a wearing the clothing item will look on you. They built a special robot that generate many human forms, and used it to photo the clothing item in all available sizes.

There are also business solutions to this. Zappos, for example solved it simply by a great service and a great return policy.

Amazon is just betting those solutions(in clothing and elsewhere) will be "good enough" , not perfect. I think it's a reasonable bet.

>The same is not true for many other types of goods, such as clothes. Shops are performing a useful function in letting consumers see, touch and try what they buy.

I used to feel the same way, but now I feel that this experience is highly overrated. If I could get away with buying all of my clothes on Zappos and Amazon (especially Zappos!), I would. They have plenty of pictures so that I know exactly what the clothes look like. Reviews from other users tell me more about the quality than I would be able to discern by simply handling the clothing in a store (e.g. how well it holds up to wear and tear). If an article of clothing doesn't quite fit right or if the color is a little off from how it appeared online, free two-way shipping solves my problem quickly and easily. Even in the cases where I have to exchange an item because of size or color problems, the total experience still requires way less time and effort than a single trip to a brick-and-mortar store.

The only reason why I think that brick-and-mortar clothing stores might survive against sites like Zappos is that most of the women I know (especially my wife) really enjoy the experience of shopping for clothes. Then again, I used to enjoy browsing electronics stores the same way, but I sure don't miss it anymore. Also, the aspect of clothes shopping that my wife seems to enjoy most is "getting deals:" using complicated combinations of sales, specials, and coupons to knock the price down as far as possible (in other words, to pay a price I would consider sane). It's not the only thing she enjoys about clothes shopping, but it's a very big part. If online clothes prices were to get sufficiently low, they would become such a "great deal" that I think she would be unable to resist. This process has already begun: she buys most of our daughters' clothes, and an increasing percentage of her own, online now.

And this is destroying your local retail market. Eventually, once all of the mom and pop shops are pushed out, we will be left with nothing but big box places that do their best to bone the consumer at every turn.

It is simply not possible to eek out anything more than a lower-middle class living owning a retail store any more. Honestly, it is pretty sad to watch. There are a lot of small, local businesses getting hammered away by these retail giants and are almost powerless to stop it.

I'm not so sure this is true anymore. I know many people who have practically become addicted to websites like Milanoo, vastly preferring them to the experience of shopping in a store. Issues of fit are reduced by providing detailed measurements instead of vague, inconsistent sizes.

Certainly this isn't as universal as it is for books, but it shows that perhaps the aversion to buying clothing online isn't quite as complete as we assume.

Last weekend, I was at a used books shop. I saw a guy with some iphone app, checking the price of each and every book in the shop (there were lots of books for $1). The store people noticed, but didn't say anything, at least I didn't see them say anything. I bet they weren't happy about it.

How long before we just place an order, online, in a centralized place, and pick one of these:

cheapest

fastest delivery

highest quality

or some combination of these, and the app finds the best place to order (amazon, walmart etc) and automatically places the order?

I'll bet that guy was looking for steals as far as the $1 discount goes. He was checking the Amazon price to see what he could flip them for.

There were a couple of stories like this about flea markets and such on HN a while back.

Probably. I wouldn't have noticed at all, except for the beep sound, every single time his phone read the barcode. He looked experienced in this, as he was going through 15-20 books a minute (never reading the title or anything, pick the book, read the barcode, check price, move on).

Slate ran an interesting article last year about this aspect of the used book market: http://www.slate.com/articles/arts/culturebox/2010/10/confes...

Yeah, that guy was definitely a reseller. Shop didn't mind because he likely ends up buying some books at the price they have set. Logical result is that shopowners buy iphone ISBN scanner and start repricing according to online prices, or open their own online store.

He was probably doing this:

http://www.slate.com/articles/arts/culturebox/2010/10/confes...

This is off topic but people are discussing Amazon and shipping so I figured I'd ask this here, because it's always confused me. Why do so many American based companies refuse to ship to Canada or limit what they do ship to Canada (Amazon, has Amazon.ca, but the selection is nothing compared to the .com, which does not ship to Canada)? It seems strange with things like NAFTA in place that companies would restrict their market power by eliminating a potential buying supply that for all intents and purposes is very similar (in terms of shipping costs, dollar value etc). So HN, what am I missing here?

I'm pretty sure that this is due to Canada's cultural protection laws, not US companies declining to take your money for some reason. this article talks about this a bit: http://www.theglobeandmail.com/globe-investor/amazon-given-g...

How long before stores start deliberately finding ways to kill cell phone reception?

The FCC strictly prohibits this I believe.

That's my understanding as well, but they could try some surreptitious methods that would stop shy of using an actual jammer.

"We've been meaning to get that cash register fixed."

Although the FCC wouldn't take that excuse more than once. (And maybe not once.)

They can't prohibit a store from building thick cement walls or putting metal cages around the walls. The only thing banned is cell-blockers.

Once they start messing with that, legal or not, I feel there will be a huge political backlash. While the confrontation will be fascinating to watch, I believe the "stop messing with the cell phone" party will win.

It really depends on if you can prove malicious intent. I know in the back of Wal Mart, for example, my cell reception is terrible. There are metal walls everywhere, thick metal shelves, and the back of the store is made of concrete and rebar. When I go into a store, I really expect my cell service to drop out. I expect a lot of people have the same expectation.

Only if they use electronic methods such as jammers. As far as I can tell there is no law against making a building a large faraday cage isn't prohibited.

Although the millions spent renovating the stores will make them even less competitive and drive more customers to shop with Amazon.

Until the day that wars are fought with EMP bombs.

That's illegal in most countries, including, for the most part, the US.

http://en.wikipedia.org/wiki/Mobile_phone_jammer#Legalities

There is supposedly wireless-blocking paint. Only active blocking is illegal.

If it's RF-absorbing paint (and not RF-reflecting), and it becomes more commercially available, will people start using it to paint other things they don't want seen by radio waves?

Until there is a hostage situation in such a store and some of the survivors complain that they tried to call the cops before the hostage-taker confiscated their phone, but couldn't because of the wireless-blocking paint...

You worry too much. There are plenty of existing buildings that naturally get little-to-no cell reception.

Not necessarily 'worrying' so much as just sayin'. And there is a difference between a building that naturally gets little-to-no cell reception and a building that was actively constructed to block it out.

I'll wager the vast majority of the calls that are made from within the store go something like "honey do you need anything, I saw X it reminded me of Y, do you want me to pick one up while I'm here?"

All you need is a building with walls, then BAM, Sprint is blocked.

The easier way is to have your own SKUs (barcodes), so they don't get a match on Amazon. This also prevents people from price-matching.

I really wonder how this will impact the commercial real estate market and if commercial real estate is an incredibly bad investment these days even at its current lows. As we all know, you have this obvious and unstoppable force of doing stuff now at home online. More and more people who used to go to stores now stay at home to shop and more and more people can perform their jobs via telecommuting rather than sitting in an office. Consequently, we have less and less need for commercial real estate space. My feeling is that in X years commercial real estate will be even more vastly under occupied and will only be occupied by services that cant be done online (restaurants, bars, night clubs, salon). Maybe as a result the expanding geographic human footprint on the earth will slow down a bit in that Walmart wont need be putting up its next super store.

This is exactly what I've done at Fry's (50% of the time as they match prices lots of times) and any of the bigger bookstores ever since I got 3G. I'm surprised Amazon, or any other online retailer, has come up with this strategy this late.

I feel no remorse doing this at Fry's. But at a place such as Books Inc. (your basic friendly neighborhood book store), well, I'd rather just buy it from the store.

Borders is gone. If Books Inc goes too, downtown will be a much less interesting place.

I remember reading a story about a year ago, reporting that stores would ask people using their smartphones to leave - they were worried that they were checking for lower prices in the area. This seems like it might be met with the same sort of attitude, at first.

When I'm in a store, I like to scan product's barcodes to see what the reviews are on Amazon. If it's a few dollars difference in price, then I'll still purchase the item, depending on if the rating is good enough. If the price is more than several dollars, though, I'll have to decide whether to pay extra for instant gratification, or if it's worth waiting a few days to get to me.

If a store attempts to stop me from scanning barcodes in this manner, I just mark it as a store that is not competitive price-wise and will no longer go there.

> If a store attempts to stop me from scanning barcodes in this manner, I just mark it as a store that is not competitive price-wise and will no longer go there.

Precisely. If they're doing that, it's because they know you can do better elsewhere.

But you see how this is a one-way relationship between them and Amazon, right? Even if they match the price of Amazon, they are on the losing end-of-the-stick because:

1) They have to pay the expenses for physically hosting that product 2) They may also have to collect state tax

So what they get out this relationship is that the customer uses store resources to investigate a product, and then either a) goes home and orders the product or b) buys the product at the store out of instant gratification.

Amazon either wins big in case a), or in b) incurs the slight cost of hosting the online resources that allowed you to do that research. The store obviously loses big in case a) and it still might lose in case b, if the product was priced so low as to be a loss-leader but you ended up not buying anything else.

Not saying what you're doing is wrong or bad. Just pointing out that the store is kind of against the brick wall, so to speak.

Perhaps the future for retailers is to adopt a gas station model: depend on Amazon to do the supplying, and make money off of something totally unrelated, just as gas stations make more profit off of a cup of coffee than they do for a full tank of gas.

What you are saying is completely valid if you are comparing the prices between two physical stores in the same general area. The problem (which may or may not be an actual problem) is that the overhead of operating a store that allows browsing demands the price to not be competitive against amazon (if you are defining not competitive as 10% more expensive).

This will only become an increasing problem as more people do what is discussed in the article. Best Buy will have to handle all of the foot traffic for both their own sales and for Amazon sales, that will lower their conversion rates which means they have to have an even higher markup which will drive more people to buy online and so on. At some point the store will go out of business and you won't even be able to pay the $10 extra to be able to physically compare products even if you wanted to.

I've been in a few stores where they were clearly placing stickers on top of the bar codes to make it more difficult to price check... fortunately, most big ticket household items like TVs have unique product numbers that are relatively easy to search for, but I could see this discouraging a few shoppers.

For things like TVs, Best Buy et al tend to be price competitive. It's add-on things like the HDMI cables and extended warranties where they screw customers with hugely inflated margins.

I ended up buying a TV on black friday at Best Buy that was cheaper than on Amazon, even after state sales tax, which was surprising.

You can also take a picture of most things- it's a little less accurate, but it still works.

Also, when a store puts their own barcode over one, I generally don't feel any guilt about peeling it back a little and scanning the original.

I love buying things off of Amazon, but almost always -- out of a dumb sort of courtesy -- I will buy a product that I became interested in from seeing it at the store. Brick and mortar has its own inherent expenses, and I can see why such stores would get annoyed when shoppers take the best from both worlds: being able to touch and test a product in the flesh and the cheaper prices of an online retailer.

In what ways can a brick-and-mortar store improve their business model to compete with this? Providing excellent customer service and expertise won't do anything to address the problem (as I can always suck up a salesperson's time and then go home and buy the product).

On the other hand, Apple stores have this exact same problem...even more so because a) their markup is even higher than electronic retail and b) the literally allow you to see how much more expensive their prices are compared to online listings, right from their own demo computers.

I don't buy much from the Apple stores but when I do, I feel even more compelled to continue my dumb-courtesy and pay the extra $10-$20 in-store. But I don't how extendable the Apple magic is to every kind of retailer

Apple still get the money if you buy their products elsewhere.

How many people who use Amazon frequently work at home or have a spouse/partner at home during the day? I would love to use Amazon for the bulk of my purchases, but I can't take delivery at work and there is no one to receive packages at my home during the day. It's completely infeasible for me to use Amazon except for occaisonal orders where it is worth taking time to stay home or visit the UPS depot to actually receive my orders.

Until Amazon solves this problem, they're not a serious competitor to traditional retail.

http://consumerist.com/2011/09/amazon-testing-locker-system-...

Depends where you live. With rare exceptions, for better of worse, shippers just leave packages at my door. (Or in the case of USPS hanging from my mailbox because the carrier doesn't want to take the time to drive down my driveway---grr.) Sometimes I have to sign a signature release form left on my door. But very rarely do I have to go to the post office or UPS depot, which I agree would be a real pain if I had to do it for every mail order purchase.

UPS has something called My Choice that lets you see when packages are arriving, schedule their delivery etc. There's supposedly a free version.

http://www.ups.com/mychoice

I was shopping for toys for my 4 year old this black friday, and I scanned a few of them ( if not all ) and the discounted toys where at the same price as Amazon.

eg: Lego Train Set

Store: $21.99

Amazon: $19.99

while the store price is marked as 20% off, and the Amazon price is marked as Prime, i went with Amazon Prime for the most part, the free shipping always wins for me, I wish this promotion was already active back then.

Now when are they going to add this feature to their Windows Phone app? Windows Phone already has the capability built-in (through Bing Vision) to scan barcodes and price-match, but Amazon's app adds more features on top of that. Kinda ridiculous that they haven't added that to their app on this platform.

It sounds gimmicky when you add on top of the 3 item, 2 day, and 5% off restrictions that it's only on select products and valid in select stores. Nice headline news, but shouldn't Amazon be looking to find people who'll become long-term users?

This is finding long term users. It's getting people into the habit of checking Amazon's prices using their phones. Generally, Amazon is competitive enough that they can beat brick and mortar prices, especially when you take sales tax into account (in some states, at least).

It's also trying to get people who don't normally shop online to try it out, under the assumption that once they do it a few times, they'll feel more comfortable doing it in the future.

Given Amazon's history of displaying different prices to different users, I wonder if they'll use this technology to optimize their prices to beat a specific competitor but perhaps not go as low as they could.

Amazon's prices are rarely the lowest.

Not this again. Amazon does not do this in the way that you imply. They try to have a single page for a given item (not always successfully). On that page, different users may see an offer for the SAME item from a DIFFERENT merchant - the price is set by the merchant, not Amazon. If you don't like it (and if there is a choice) click on the "N more used & new" link close to the buy button to see all the offers from various merchants.

Amazon themselves DO NOT show different prices to different customers for the same item sold by the "primary" Amazon merchant. However, they also run a merchant called "Warehouse Deals" which is basically B-grade stock. Obviously this is cheaper, with limited availability.

Disclaimer: ex-employee.

This is what I was kind of doing for books in Barnes and Noble: check the contents, read a few pages, then buy the e-book or physical book online. With this app it would make it super convenient to compare prices and order instantly after doing such a thing. I would imagine this will extend to clothing and other things, i.e. people will try the clothes and look at stuff in physical stores then order online if there is no rush to have the item. Who would have thought the online world would be such a force to reckon with?

This is why stores should start offering free wifi - so they can see how much this is affecting their bottom line.

But wouldn't the store have to be sniffing the actual content of the traffic? Not a great move if it got out, and I might just assume that's happening anyway and not use it.

I love this. Stores hate it when people do stuff like this, and that's what makes it so fun.

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