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Are Smartphones Killing Retailers?

by Sean P. Aune | December 19, 2010December 19, 2010 4:00 pm PDT

Smartphones have been a boon to many retailers in terms of sales. As more and more consumers flock to phones with more features, and higher price points, they have seen their sales rise, but have they unwittingly also aided in damaging their bottom lines as barcode scanning applications become all the rage?

If you go into the iOS App Store and do a search on “barcode”, you will find well over a hundred apps. All of them do some form of variation of price comparison, and all of them are striking fear, as well as hope, into brick and mortar retailers.

shopsavvyFor those that have not yet experimented with these apps, using your smartphone’s camera you can take a picture of UPC barcode on a product and get listings of what the price is online and for stores located near you.  Some will also let you type in the product if you can’t find the barcode to scan, and some will even let you speak the name of the item for even easier searching.  In short, they bring the power of an easy Internet search to the palm of your hand so you can do comparison shopping while on the go.

According to a story from The Wall Street Journal last week, retailers are trying to find a way to not fear these applications as much as embrace them.  Some apps such as TheFind are allowing retailers to advertise inside of the application when you search on a product in a competing store.  Say you are in Walmart and you scan the UPC barcode on a Blu-ray player, an ad will appear from Best Buy telling you about the same model, or one similar to it.  Of course these ads won’t do the retailer much good if the price isn’t lower than the ones found for online retailers.

I’ve been using ShopSavvy on my Android phone for ages now, and I have to say it has changed everything about the way I shop.  If it’s a non-perishable item, which would be difficult to ship to me, I scan just about every item I even ponder buying.  More than a few times I have put things back and simply ordered from my phone while still standing next to the item on the store shelf.

Where this is an issue is really going to be on your “mom and pop” stores.  These businesses have already taken a hit due to the Internet, and now essentially having a customer walk into their shops with what amounts to every business in their world in their pocket, they’re going to have an even harder time selling to consumers.  Everyone loves a bargain, but people need to remember that small businesses don’t have the buying power of larger chains so of course they can’t compete on price.  This wouldn’t have even crossed my mind if I hadn’t seen it happen recently and the customer loudly proclaimed to the shop clerk how their store was such a rip-off when their phone had told them how much cheaper the item was elsewhere.

As a frugal buyer I love these apps, but as someone who has been on the frontline of a family owned business, I can only imagine the pain they are going through now.

What say you?  Have you given these apps a try yet?


Sean P. Aune

Sean P. Aune has been a professional technology blogger since July 2007, but his love of tech dates back to at least 1976 when his parents bought...

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