Friday, January 2, 2009

Power to the People

The era of handheld Internet applications has just begun to empower consumers. With the ability to instantly index bar codes against a local database, consumers will be able to directly compare prices instantly on items in a retail store.

This technology, currently enabled by the iPhone and Google handsets is only the beginning of the impact of instant data sharing among consumers. One of the things many retailers depend on is the relative price ignorance of consumers or that they will be able to recover the cost of their loss leaders on the profit spread of the other merchandise purchased. Will that be compromised?

What if consumers each took the time to report the price of big ticket items, such as automobiles and cars? If I could see what the last 5 people paid for their Toyota Camry I am likely to get mine for less than any of them paid.

Combining this technology with GPS enabled hand held or with Internet mapping and the properly position company could literally lure people directly to their doorstep. Creative marketing techniques might even include using the very price comparison technology directly on store shelves to demonstrate low prices. This would seem to me to put a strong downward pressure on the difference in retail pricing among stores at least those in close geographical proximity.

This technology probably also stands to most benefit those companies who benefit from economies of scale and who have the lowest prices on average.

Can you think of a time you paid for something and a short while later found it on sale somewhere else cheaper? Would you use technology like this?