TM Lutas and Howard at SmartMobs think retail outlets aren't competitive enough, and TML suggests RFID readers and a price database would put some downward price pressure on brick-and-mortar operations.

Phillips has a new take on RFID and wants to put RFID readers in mobile phones so you can comparison shop. This, along with a bar code reader, would take away a lot of the normal retail strategies that stores use to enhance profits via sales. People go into stores just to get what's on sale but what the retail outlet wants them to do is to buy enough other items so that they increase gross sales and profitability at the same time. Being able to consult a database wirelessly and know that the item you're looking at (or a comparable one) is available for less a block away will drastically change shopping patterns, especially for multiple stores in a category that are close to each other.
I don't doubt an increased ability to comparison-shop would flatten out pricing discrepancies a little, but I'm not convinced it's necessary. I have several friends who manage large retail stores and they all tell me that internet shopping has cut their margins to the bone. Many big chains are closing stores that can't turn a profit because competition is aleady very fierce -- and everyone is familiar with the woes of mom and pop stores faced not only with the internet but with Barnes & Noble and WalMart.

I'm a capitalist, and I love competition, but I just don't think there's that much fat to trim. Everyone I know who's bought car in the past few years has taken an internet price quote to the dealer and gotten a good deal. The huge Tower Records in one of the fastest-growing areas of West LA is closing down because it's CDs are several dollars more expensive than Amazon's. Lease rates on the 3rd Street Promenade are over $120 per square foot, and all the stores signing new leases are losing money just for the chance to have exposure. Gas stations are closing for renovation because with prices so high the competition slashes their margin to just a few cents per gallon.

Anyway, that's all anecdotal, but I don't see evidence to suggest that a more-informed consumer could do much better than he's already doing in most industries. What I'd like is some software that locates grocery coupons in newspapers, clips them for me, compares them to my grocery list, and then tells me where to shop for what I want. Or has it all delivered. Grocery shoppers could certainly benefit from a system like TML describes.



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