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EcommerceBytes-NewsFlash, Number 2692 - December 09, 2011 - ISSN 1539-5065    2 of 4

Amazon Promotion Has Brick-and-Mortar Retailers Seeing Red

By Ina Steiner
EcommerceBytes.com
December 09, 2011




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As if Wal-Mart wasn't tough enough to compete with, brick-and mortar retailers have found themselves competing with more a fearsome competitor in recent years - Amazon.com. Retailers say they are tired of shoppers pulling out mobile devices to check online prices, but tempers reached the boiling point this week after retailers read about Amazon.com's new promotion.

Amazon is encouraging the use of its mobile app by in-store shoppers and on Saturday will give consumers a 5% discount on items purchased through Amazon if they use its Price Check mobile app to compare prices at brick-and mortar retailers (see Wednesday's EcommerceBytes Newsflash story).

The press reported on retailers' reaction to the promotion, from an article in the Telegraph in the UK to a regional television network, which quoted a local bookseller calling the move tacky - "You would think that a company of that size would be willing to just live and let live for small retailers who can't possibly affect them but, no, they want it all."

Retail Industry Leaders Association (RILA), a trade association of the largest 200 companies in the retail industry, used the controversy to criticize Amazon over the sales tax issue. RILA's executive vice president of public affairs Katherine Lugar said in a statement, "by continuing to evade collecting state sales taxes, Amazon's exploitation of a pre-Internet tax loophole is resulting in a 6-10 percent perceived price advantage over their competitors on Main Street."

Chicago retailer Lesley Tweedie, profiled in EcommerceBytes in October, told the Wall Street Journal's AllThingsD blog she hoped the controversy would raise awareness of the plight of local retail stores and hopes a "buy it where you try it" philosophy will prevail.

But whether retailers like it or not, mobile shopping apps continue to grow in popularity. PriceGrabber, part of Experian, found in a survey of 3500 online shoppers conducted in October that 39% of consumers had shopping-related apps on a smartphone, and of those, 84% planned to use their apps to help save money when purchasing holiday gifts.

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

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