Amazon found itself in the pre-holiday spotlight for a recent one-day promotion of its shopping app. It encouraged smartphone users to download the tool and scan UPC codes on certain items at retail stores.
As a small inducement to make the price comparison, Amazon offered five percent back on three items (up to $5 each) if the shopper purchased online.
Critics say they find shopping apps sneaky and unfair to bricks-and-mortar retailers who have to cover costs an online seller does not. Yet, others agree with Amazon that the app is pro-consumer. Amazon’s promotion tripled downloads of its app when compared to the previous weekend.
Firmly on the critics’ side was Senator Olympia Snowe (R-Maine), a champion of small business and entrepreneurship. She called the promotion an “attack on Main Street businesses that employ workers in our communities” and asked for it to end.
The latest kerfuffle
Why did Amazon’s promotion create such a debate?
After all, other shopping apps have been available for some time and Internet-enabled phones have long allowed shoppers to search a product’s ratings, rankings and price at the point of purchase.
Perhaps there is still bad feeling from years when traditional retailers had to collect sales taxes while online shops did not.
Or, with mobile usage on the upswing, perhaps the accelerating change in our shopping habits is becoming more noticed.
The USC Annenberg Center for the Digital Future has tracked the online activity of American Internet users for 10 years. It predicts a continuing shift in buying habits, with the downside to traditional retailers.
Here are some facts from the center’s 2011 Digital Future Study:
- 68 percent of Americans buy online.
- 70 percent of online buyers said their online purchasing reduces their buying in traditional retail stores.
- 58 percent of adult Internet users spend $1 to $100 per month, up from 54 percent in the previous study.
- Although large percentages of Internet users buy online, even larger percentages continue to use the Web as a reference service before purchasing locally.
“We are seeing only the beginning of the shift in American purchasing habits brought by the Internet,” said Jeffrey I. Cole, director of the Center for the Digital Future. “Five years from now, the traditional retail landscape will be completely different than it is today.”
How does a traditional retailer stay relevant so it thrives long-term?
Writing in Forbes, contributor E.D. Kain explains that retailers will need to compete not on price but on creating a great experience. “Plenty of customers are willing to pay a premium just for the quirkiness of shopping at a place that’s one of a kind,” he notes.
Now it’s your turn. Are you shopping team Internet, shopping team retail or a bit of both? Can strong branding and a great experience secure the future of the bricks-and-mortar retailer?
Many thanks to Slack pics for the shift key photo via Flickr.
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