Why Using ShopSavvy Might Not Be So Savvy

Reading this morning’s New York Times story, Mobile Phones Become Essential Tools for Holiday Shopping, I was reminded again of the fundamental shortsightedness of so many of our economic decisions, that flaw in human nature that makes us seize on temporary advantage without thinking of the long-term consequences.

The article focuses on the use of applications like ShopSavvy and RedLaser to do comparison price checking while in the store. On the surface, these are great tools for consumers (and there are other applications besides price comparison.) But remember, cutthroat pursuit of the lowest price will hasten the demise of many retailers, while strengthening others (usually, the biggest and most efficient, who can make money on the slenderest margins.) But what happens once those mega-retailers are the last one standing? Prices are likely to go up.

Particularly troubling is the trend to shop in the store, but then to buy online. From the Times article:

Matthew Tractenberg, for example, was recently shopping in a Silicon Valley bookstore, where he picked out five books for a total of $80. Before taking them to the counter, he typed the titles into the Amazon app on his BlackBerry Curve. Amazon had the books for $50 and would not charge sales tax or shipping. He placed the order on the spot and left his small pile of books in the store.

I wrote about this problem in a 2003 piece entitled Buy Where You Shop:

A few months ago, I was talking with one of my most loyal retail customers, a specialty computer bookstore in Massachusetts. “We survived the chains, and we survived Amazon,” he said, “but I don’t know if we’re going to survive the online discounters. People come in here all the time, browse through the books on display, and then tell me as they leave that they can get a better price online.”

Now, you might say, as the Hawaiian proverb notes, no one promised us tomorrow. Businesses, like individuals and species, must adapt or die. And if the Internet is bad for small, local retailers, it’s good for the online resellers and it’s good for customers, right?

But think a little more deeply, and you realize that my friend wasn’t complaining that people were buying books elsewhere. He was complaining that people were taking a service from him–browsing the books in his store–and then buying elsewhere. There’s a world of difference between those two statements. Online shopping is terrific: you can get detailed product information, recommendations from other customers, make a choice, and have the product delivered right to your door. But if you aren’t satisfied with the online shopping experience, you want to look at the physical product, for example browsing through a book in the store, you owe it to the retailer–and to yourself–to buy it there, rather than going home and saving a few dollars by ordering it online.

Think about it for a minute: the retailer pays rent, orders and stocks the product, pays salespeople. You take advantage of all those services, and then give your money to someone else who can give you a better price because they don’t incur the cost of those services you just used. Not only is this unfair; it’s short-sighted, because it will only be so long before that retailer closes his or her doors, and you can no longer make use of those services you enjoy.

The piece struck a chord with booksellers. Many laminated it and hung it by the shelves in their stores. But it didn’t make much difference. The store owner who inspired the piece did end up shuttering the business.

Maybe it’s all for the best, part of the creative destruction of capitalism. But as a consumer, it’s wise to realize the long-term implications of your choices. Shop at the big box store for the better price, and lose the small local store that was so convenient; browse the shelves or racks in a brick and mortar store, then buy online? How long do you think you’ll be able to do that?

My advice remains the same as it was in 2003: Buy where you shop. If you discover a product online, buy it there. But if you discover it in a store, buy it there. Don’t save a few dollars now, and lose the opportunity to shop at a local merchant in the future.

Of course, if you’re happy to lose local bricks-and-mortar merchants, that’s your choice. I’ve never been much of a physical shopper – I do most of my shopping online, and I love the convenience. But when I do go to local stores to browse physical products, I make sure to buy there, even if there’s a better price online. I’m paying a little extra for that right to walk up and touch the product before I buy it.