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Price-comparison app set to put traditional retailers in a flap

IMAGINE walking into a department store, trying on a pair of shoes or moisturiser then pointing your mobile phone at the barcode to get a list of real-time pricing information from competitors offering the same pair of shoes or facial cream a few dollars cheaper just a few doors away.

It is a phenomenon known as ''showrooming'' and it is causing headaches for traditional retailers in the United States who are already under siege from the online price discounting that has wreaked havoc with their business models. For customers, the mobile commerce apps give them even greater power to compare prices while shopping.

In Australia, a few retailers have started experimenting with mobile apps but they have a long way to go to catch up to US retailers, says telecom consultant Paul Budde at BuddeComm.

Mr Budde estimates that Australians own more than one mobile phone each (a penetration rate of more than 120 per cent) and smartphones have more than 50 per cent penetration, which means it is only a matter of time before the apps are offered in Australia.

Woolworths was the first major retailer to launch an app last August with limited offerings, which included the ability to scan a product's barcode with their smartphone, add it to their shopping list, and then order and pay for their groceries, which are home delivered.

Discount department store chain Big W went a step further and launched a mobile app in November, with a key feature to scan a product in any competitor's store and get the comparable price at Big W. In the next few weeks it plans to expand the price comparison to more than 60,000 products and offer detailed product information on more than 20,000 items. Its corporate affairs manager, Clare Buchanan, said the upgrades will connect to online shopping to enable customers to compare prices as well as buy instantly from Big W for home delivery or layby. ''Even when you're standing in Kmart,'' Ms Buchanan said. ''It will also give customers tracking information about the progress of their order and SMS them when it's about to be delivered - this feature alone is anticipated to reduce call centre volumes by about 25 per cent,'' she said.

Fashion chain Sportsgirl is another early adopter of mobile commerce. The group's strategic brand manager, Prue Thomas, said introducing a mobile app was a no-brainer and it is growing faster than website sales.

''Our girls are on the phones 24/7 and we should be, too. They can purchase as much as they want from the mobile.''

29 comments

  • Retailers have been ripping us off for too long - it's about time the consumer tipped the scales a bit. Just hope that they develop an app for Windows phone 7

    Commenter
    Matt
    Location
    Melbourne
    Date and time
    May 19, 2012, 10:12AM
    • We pump billions into the car industry to keep jobs, we might as well be charged huge prices to support the retailers/wholesalers....which industry will we need to prop up next - the miners? (they are beginning to bleat too).

      Given we never had the foresight and the resolve to develop new industries here in Oz, it is the only way we know to keep the jobs associated with "dinosaur" industries.

      We have been shipping new inventions off shore for decades now - lawn mowers, clothes hoists, solar panels, bio-med and artists - all because business leaders here are risk averse and short sighted - much like our governments (of any persuasion) - much like us.

      So who are we as a nation that we have allowed our country to come to this?

      We once had some real values and the Australian 'mateship' and give a bloke a fair go ethic that was admired all over the world. A time when the milk money was safe left out on the street for the milkman and when a child would hold out some coins and the shopkeeper would take only the money that was owed...

      What we need is a financial crisis and resulting social calamity to wake us up from the long snooze we have and are in. And perhaps it is coming, because these models of inflated prices, government hand outs to industry are simply not sustainable.

      Commenter
      Kostas
      Date and time
      May 19, 2012, 11:16AM
    • Well said, Kostas. Australia is destined to always be the poor relation unless there is a change in the mindset of governments and industry in this country.

      Commenter
      Lynne
      Location
      Melbourne
      Date and time
      May 19, 2012, 12:50PM
  • No...it can't be...... it will cost jobs, jobs, jobs..... you know... the future of the nations well being depends on retail.... buying stuff, more stuff and stuff you don't need.
    What will our children, and their child do....if they can't do retail? They might even have to stay at school.
    We've got to stop this intrusion into the profitability of retail shops so they can keep making their payments to the temple we all worship at.... mamon.

    Commenter
    costa parki mik
    Location
    melbourne
    Date and time
    May 19, 2012, 10:37AM
    • Come on, the retail experience has almost reached its logical reinvention. I call it 'overnight shopping'. It works like this. The punter logs on to the online shopping platform, assigns some monies to an item of choice. One at a time - don't be greedy. Then, the good part. The punter has to wait. Not too long - there are biorhythms involved that are yet to be transcended. The punter has to wait overnight. Then, after enduring the delicious expectation for a whole night, a message arrives on the digital device of choice that the item has arrived - virtually. The virtual item can then be enjoyed until the customer is sick of it, and then log on again for more overnight shopping. I don't know how we'll keep the customers in virtual cash for this exercise, but presumably it's reasonably cheap.

      Commenter
      Bob
      Location
      Hawthorn
      Date and time
      May 19, 2012, 1:42PM
  • If you buy online you can save money as the retailer does not have to pay for showrooms, service staff, display stock etc. The trade off for the cheaper price is a slight element of risk and the fact you cant actually see, touch, try out the goods.

    I think it is simply unfair to use someones showrooms and staff with no intention of ever buying from them.

    There will be consequences. Imagine paying an entry fee to get into a showroom. It sounds outrageous but possibly the only way that traditional retail will survive.

    I recently paid a slightly higher price for a TV from a shop, knowing that I could get it a couple of hundred dollars cheaper online, because I appreciated being able to view a large range in their display room and their staff were quite helpful.

    Commenter
    Dave
    Location
    Melbourne
    Date and time
    May 19, 2012, 10:39AM
    • I am on online retailer in Australia. (www.hatsfromoz.com.au). Why is that you think we do not have pay for things????
      I have to pay wages. I have to pay rent for warehouse. I have to pay for shipping. I have to pay for advertising online (quite a large bill, by the way). I have to pay for web development, for dedicated servers and other things thatt you do not even think of. Everyone thinks that online retail is easy to do and no capital involved. Well, try it and you wil be surprised!
      The biggest problem with Australia retail, as I see it, is middle man. Very rarely retail sells directly from manufacturer. Usually, your goods will change hands multiple time on the way from factory to you and everyone wants a piece.

      Commenter
      Rudolf
      Date and time
      May 19, 2012, 11:19AM
    • And there's the flaw in your argument right there Dave. A "couple of hundred dollars" more than online is NOT a "slightly higher price". It's a massively inflated price. It's also why we're so tired of retailers whining about GST. A couple of hundred dollars isn't about a 10 per cent tax - it's about outdated greed in a world that now offers cheaper alternatives. I hope retailers enjoyed their inflated margins over the last few decades, because the party is well and truly over.

      Commenter
      Woz
      Location
      Albury
      Date and time
      May 19, 2012, 11:46AM
    • In that case, you're welcome to come when I buy my next TV and pay my Gerry Harvey Tax.

      Commenter
      Savas
      Location
      Melbourne
      Date and time
      May 19, 2012, 12:19PM
    • I buy most of the things I need online. And if I walk into a shop to look at an item, I do so because I am seriously considering buying it. Indeed, I often compare prices for items online, before I head out to the shop that will give me the best deal. The exact opposite to what you are claiming. What do you suggest? Suspect everybody of simply checking out items before they buy online and tie them up until they buy in the shop they are browsing in?

      Commenter
      Lynne
      Location
      Melbourne
      Date and time
      May 19, 2012, 12:58PM

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