
Amazon Will Pay Shoppers $5 to Walk Out of Stores Empty-Handed - 8bitliving
http://allthingsd.com/20111206/amazon-will-pay-shoppers-5-to-walk-out-of-stores-empty-handed
======
raganwald
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.

~~~
tomkarlo
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...](http://www.amazon.com/gp/subscribe-and-
save/details/index.html))

~~~
quanticle
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.

~~~
tomkarlo
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.

------
droithomme
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.

~~~
colanderman
_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.

------
redthrowaway
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.

------
oldgregg
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).

~~~
rscale
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.

~~~
freehunter
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.

------
amanfredi
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.

~~~
CamperBob
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.

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

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

------
ck2
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.

------
harryf
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>
)...

~~~
lucasjung
> _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.

~~~
swalkergibson
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.

------
vijayr
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?

~~~
pyre
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.

~~~
vijayr
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).

~~~
InnocentB
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...](http://www.slate.com/articles/arts/culturebox/2010/10/confessions_of_a_usedbook_salesman.single.html)

------
int3rnaut
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?

~~~
throw_away
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...](http://www.theglobeandmail.com/globe-investor/amazon-given-green-
light-to-set-up-shop-in-canada/article1532080/)

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

~~~
davidblair
The FCC strictly prohibits this I believe.

~~~
freehunter
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.

~~~
Florin_Andrei
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.

~~~
freehunter
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.

------
moocow01
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.

------
ineedtosleep
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.

~~~
Florin_Andrei
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.

------
pavel_lishin
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.

~~~
jtreminio
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.

~~~
esrauch
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.

------
querulous
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.

~~~
ghaff
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.

------
mrpollo
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.

------
freehunter
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.

------
mquinlan
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?

~~~
tghw
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.

------
hallman76
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.

~~~
jrabone
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.

------
rosariom
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?

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

~~~
xer0
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.

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

