http://www.amazon.com/gp/feature.html?ie=UTF8&docId=aw_ppricecheck_iphone_mobile
That’s exactly what Amazon has been thinking. Amazon has just released an app for the iPhone that allows consumers to instantly compare prices of products on store shelves to their prices on Amazon.com, simply by scanning the bar code with the iPhone’s built-in camera. Now that’s convenient.
It’s also quite devastating for traditional retailers because Amazon has just taken another crucial step toward driving them out of business. How? Because Amazon is almost guaranteed to have lower prices than most retailers and it now has an effective method to broadcast its lower prices to every shopper who owns an iPhone. Amazon is able to achieve these lower prices because, unlike most retail outlets, Amazon has much, much lower costs. It achieves low costs using 2 primary methods:
1) Keeping most of its wares in cheap and efficient mega-sized storage facilities on desolate strips of land where per-unit inventory costs are virtually nonexistent (economies of scale!), and shiping items out whenever necessary through efficient courier services (economies of scale!)
2) Selling thorough a website, which only takes a small team of team of people to manage.
In contrast, traditional retailers (such as Staples) have to keep their wares in expensive locations in populated areas, create complex distribution networks to supply these locations, pay numerous associates to hawk their wares at each location, and hire managers, HR personnel, janitors, accountants, marketers……
Amazon can lower its prices because it doesn’t need to do any of the above. But wait – it gets even more ingenious. With this move, Amazon has also eliminated one of the biggest problems of online retail – the lack of real products on display. The app allows Amazon to piggyback on retailers’ showrooms: if I want to buy a laptop, I go to Staples to check out the real item, then scan the bar code, and buy it on Amazon instead.
