Smartphone technology hastens the shift of sales from local to online

This Wall Street Journal article highlights the use of smart phones by in-store shoppers to find the best deal — and very often the best deal is from an online retailer.  The article notes that “The retailer’s advantage has been eroded,” says Greg Girard of consultancy IDC Retail Insights, which recently found that roughly 45% of customers with smartphones had used them to perform due diligence on a store’s prices. “The four walls of the store have become porous.”  The article goes on to cite statistics from Coremetrics that:  “On the Friday after Thanksgiving a year ago, consumers using mobile devices accounted for just 0.1% of visits to retail websites…[t]his Black Friday, they accounted for 5.6%, for a 50-fold increase.”

Unfortunately, the article mistakenly leaves the reader with the impression that the sale is tax free (it is not):  “Tri Tang, a 25-year-old marketer, walked into a Best Buy Co. store in Sunnyvale, Calif., this past weekend and spotted the perfect gift for his girlfriend.  Last year, he might have just dropped the $184.85 Garmin global positioning system into his cart. This time, he took out his Android phone and typed the model number into an app that instantly compared the Best Buy price to those of other retailers. He found that he could get the same item on Amazon.com Inc.’s website for only $106.75, no shipping, no tax.”

The perceived price advantage enjoyed by online retailers makes retail stores more vulnerable to shifts in purchasing habits driven by the new smartphone technology.  The Main Street Fairness Act now pending before Congress would eliminate this structural imbalance.

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