> Most items that cost enough that one store has a $10 or more savings over another store, I'm already comparison-shopping or buying from amazon. Retailers who aren't already cutting their margins in your examples 2-3 are losing my business to the internet. Where's the value to the retailer here? If they're back to being competitive with amazon, I'm going to have the opportunity to realize it, and I'll go back to buying from them.
Again, maybe this is a difference between America and the UK, I've never seen a retail store compete with an online store in price, the value in retail is instant purchase and no shipping cost. If you're already comparison shopping you're not the average customer.
> Also note that your store in case #3 doesn't lose the sale from their use of the app; I can see their price because I'm standing in the store, so they lose the sale whether or not they're using the app. Using the app doesn't gain them anything, so they might not use it -- but it does gain their competitor a sale, so the competitor definitely should use it.
I think I explained it poorly. My example #3 is if you walk into a store and see an item is $15, if you then think "it's probably at cheapest going to be $10 anywhere else, it's not worth walking to the 4 other shops that probably stock this item to find out, as 1 hour of my time is worth more to me than a $5 saving" that store retains the sale; if you pull out your phone and it says "it's $10 across the street" you're going to go that new shop. Therefore a sale is lost: stores that offer the lowest price win (to a point, $0.25 difference won't matter to most consumers)
> And of course a lot of what I buy costs little enough that comparison shopping is pointless. It's $3 at Wal-Mart and $4 in the store right next to my house? The closer store might gain a sale by telling me they exist and they have the thing I want (whether or not Wal-Mart is using this app, the dollar savings isn't making the difference). So the retailer again has the chance to gain value here.
So that there is marketing; a store exists and there are potential customers that don't know it exists. Surely the solution to that problem is proper advertising? In your example what if there is 2 grocery stores right next to your house; if both use the app then you go to the cheapest. The only way the app would be valuable in that situation is if the shop was far enough out of the way from cheaper shops that the time investment wasn't worth it to go to the other shops.
> The net result here is that there is incentive for retailers, at least in some markets, to use such a system. They've already lost all the sales you worry this will make them lose, but this provides some opportunity for them to make back some sales in other circumstances. So it's a net win.
I'm not sure what you mean. If you go in to a shop to buy a $15 item and you know that there are 4 other shops that stock it and MAYBE one of them will MAYBE stock it for $5 cheaper do you go to each of the 4 other shops to find it MAYBE cheaper? No, nobody does that, it's insane. Now if you could pull out your phone and be told "Shop x has it for $10" you KNOW you're getting a $5 saving and the other shop is across the street. You'd be stupid not to go and get it from the other place. This means that the only shops that win are shops that price it the lowest, or shops that are in an isolate environment (say a small town) with no competition; but then the people would never be using the app because they would know where everything is.
> Of course, it may not be enough of a net win to make it worth the effort for either the store or me as a consumer to use. Execution matters an awful lot. But it's not unreasonable that, done right, it could provide a lot of value to customers and retailers alike.
Customers, absolutely, this would be incredibly valuable to customers, but I have yet to see a situation posted that makes it valuable enough to retailers that they could risk the downsides. If you're the cheapest store, great, extra custom, but if you can't afford the margins that others can? Then your business won't last, whereas currently a store can exist with higher priced items because of people have a "favourite" shop because of expected quality of pricing and experience.
Maybe it's different for you, but where I live (in a largeish city in the US), most stores don't have direct competitors within easy walking distance. You've assumed a walk across the street, but out here it's probably a mile and a half drive and 2 unpleasant parking lots. That changes a lot of your scenarios -- while you'd be silly not to walk next door to save a few bucks, the time investment in many US cities is often too high to be worth going to cheaper shops. Looked at in another way, if I'm looking for something specific and I discover that I can get it from a store that is in close range, the value proposition of immediacy and reduced frustration for me can lead to a sale for that retailer even if their price isn't great.
You're also considering the value proposition symmetrically, when you should be considering it asymmetrically. That is, you're thinking "the store that sells this for $15 wouldn't use this app, because then the store selling it for $10 would steal all their business." That's a crappy value proposition for the $15 store, but a great one for the $10 store. Some stores might not use it, but those with better prices or better selections would basically consider it free advertizing.
Also, I'm pretty sure you're wrong about retailers not being able to compete if their prices are higher, and about this sort of app destroying those businesses. We already have this scenario with grocery stores, where you can compare them just by reading the paper (or the online ads), and yet certain more costly stores still survive. Maybe it's location/convenience, maybe it's unique selection, maybe it's customer service or return policies, or maybe it's that cute girl ringing up your groceries.
I think, ultimately, you're conceiving of this app as "how do I get the best price on X within a Y block radius?", whereas I'm conceiving of it as "can I get X from anywhere at all within a Y block radius?" and only secondarily "can I save money on X?" Phrased my way, there's an obvious value proposition for retailers.
Again, maybe this is a difference between America and the UK, I've never seen a retail store compete with an online store in price, the value in retail is instant purchase and no shipping cost. If you're already comparison shopping you're not the average customer.
> Also note that your store in case #3 doesn't lose the sale from their use of the app; I can see their price because I'm standing in the store, so they lose the sale whether or not they're using the app. Using the app doesn't gain them anything, so they might not use it -- but it does gain their competitor a sale, so the competitor definitely should use it.
I think I explained it poorly. My example #3 is if you walk into a store and see an item is $15, if you then think "it's probably at cheapest going to be $10 anywhere else, it's not worth walking to the 4 other shops that probably stock this item to find out, as 1 hour of my time is worth more to me than a $5 saving" that store retains the sale; if you pull out your phone and it says "it's $10 across the street" you're going to go that new shop. Therefore a sale is lost: stores that offer the lowest price win (to a point, $0.25 difference won't matter to most consumers)
> And of course a lot of what I buy costs little enough that comparison shopping is pointless. It's $3 at Wal-Mart and $4 in the store right next to my house? The closer store might gain a sale by telling me they exist and they have the thing I want (whether or not Wal-Mart is using this app, the dollar savings isn't making the difference). So the retailer again has the chance to gain value here.
So that there is marketing; a store exists and there are potential customers that don't know it exists. Surely the solution to that problem is proper advertising? In your example what if there is 2 grocery stores right next to your house; if both use the app then you go to the cheapest. The only way the app would be valuable in that situation is if the shop was far enough out of the way from cheaper shops that the time investment wasn't worth it to go to the other shops.
> The net result here is that there is incentive for retailers, at least in some markets, to use such a system. They've already lost all the sales you worry this will make them lose, but this provides some opportunity for them to make back some sales in other circumstances. So it's a net win.
I'm not sure what you mean. If you go in to a shop to buy a $15 item and you know that there are 4 other shops that stock it and MAYBE one of them will MAYBE stock it for $5 cheaper do you go to each of the 4 other shops to find it MAYBE cheaper? No, nobody does that, it's insane. Now if you could pull out your phone and be told "Shop x has it for $10" you KNOW you're getting a $5 saving and the other shop is across the street. You'd be stupid not to go and get it from the other place. This means that the only shops that win are shops that price it the lowest, or shops that are in an isolate environment (say a small town) with no competition; but then the people would never be using the app because they would know where everything is.
> Of course, it may not be enough of a net win to make it worth the effort for either the store or me as a consumer to use. Execution matters an awful lot. But it's not unreasonable that, done right, it could provide a lot of value to customers and retailers alike.
Customers, absolutely, this would be incredibly valuable to customers, but I have yet to see a situation posted that makes it valuable enough to retailers that they could risk the downsides. If you're the cheapest store, great, extra custom, but if you can't afford the margins that others can? Then your business won't last, whereas currently a store can exist with higher priced items because of people have a "favourite" shop because of expected quality of pricing and experience.