By Danielle Kucera - Dec 10, 2011 4:52 AM GMT+0700
Amazon.com Inc. (AMZN) should end its price- checking promotion because it gives consumers an incentive to gather price data from small retailers and leave stores without spending money, said Senator Olympia Snowe.
The world’s largest online retailer is offering a 5 percent discount to entice users to try a new mobile application that compares prices with physical retailers. The app, called Price Check, allows shoppers to look up Amazon’s prices by scanning products at a store using their phones.
“Amazon’s promotion -- paying consumers to visit small businesses and leave empty-handed -- is an attack on Main Street businesses that employ workers in our communities,” Snowe, a Maine Republican, said in a statement yesterday. “Small businesses are fighting everyday to compete with giant retailers, such as Amazon, and incentivizing consumers to spy on local shops is a bridge too far.”
Amazon is aiming to draw more online purchases from the more than 95 percent of U.S. consumers who still shop in stores, ratcheting up rivalry with traditional retailers. The Seattle- based company estimates revenue will rise to $16.5 billion to $18.7 billion in the fourth quarter -- growth of 27 percent to 44 percent, respectively, compared with a year earlier.
The app is intended for customers who are comparing prices in “major” retail chain stores, Amazon said today in an e- mailed statement, adding that it also includes prices from third-party sellers.
Qualifying Products
“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,” Amazon said.
Customers who download the app and enable the location feature will see the 5 percent discount, or as much as $5 off, on as many as three qualifying products, including electronics, toys, music, sporting goods and DVDs, the company said in a statement Dec. 6.
Oren Teicher, chief executive officer of the American Booksellers Association, said that his organization was “disappointed” by the app, according to a statement posted yesterday on its website.
“We could call your $5 bounty to app-users a cheesy marketing move and leave it at that,” Teicher said. “In fact, it is the latest in a series of steps to expand your market at the expense of cities and towns nationwide, stripping them of their unique character and the financial wherewithal to pay for essential needs for schools, fire and police departments, and libraries."
Amazon rose 1.3 percent to $193.03 at the close in New York. The shares have gained 7.2 percent this year.
To contact the reporter on this story: Danielle Kucera in San Francisco at dkucera6@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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