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Abstract

Amazon.com, one of the leading online retailers, unveiled a new application that enabled iPhone users to shop through their mobile handset, in December 2008. A customer, who wished to compare the price of a product at a brick-and-mortar store with that of Amazon, could take a photograph of the item on his iPhone and email it to Amazon. Within 5 minutes to 24 hours, Amazon would send an email to the customer, listing the prices and customer reviews of all its products that matched the one on the photo. Even as analysts were optimistic that this would generate a competitive advantage to Amazon, it also faced several challenges. The competition from brick-and-mortar stores that attracted over 95% of the customers was the foremost challenge. Other online retailing giants such as eBay, Walmart etc, also posed threats. Moreover, shopping through mobile phones had a technical issue. The mobile phone's screen was too small to display the product and the reviews clearly. Apart from these, the weak consumer spending that resulted from the global financial crisis also remained a huge impediment for the company. Despite all these hurdles, Amazon was assertive that the new iPhone application would help the company acquire more customers and add to its revenue. Would Amazon's confidence pay off? Would the company achieve a competitive advantage through its iPhone application?
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July 2009

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Abstract

Amazon.com, one of the leading online retailers, unveiled a new application that enabled iPhone users to shop through their mobile handset, in December 2008. A customer, who wished to compare the price of a product at a brick-and-mortar store with that of Amazon, could take a photograph of the item on his iPhone and email it to Amazon. Within 5 minutes to 24 hours, Amazon would send an email to the customer, listing the prices and customer reviews of all its products that matched the one on the photo. Even as analysts were optimistic that this would generate a competitive advantage to Amazon, it also faced several challenges. The competition from brick-and-mortar stores that attracted over 95% of the customers was the foremost challenge. Other online retailing giants such as eBay, Walmart etc, also posed threats. Moreover, shopping through mobile phones had a technical issue. The mobile phone's screen was too small to display the product and the reviews clearly. Apart from these, the weak consumer spending that resulted from the global financial crisis also remained a huge impediment for the company. Despite all these hurdles, Amazon was assertive that the new iPhone application would help the company acquire more customers and add to its revenue. Would Amazon's confidence pay off? Would the company achieve a competitive advantage through its iPhone application?

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July 2009

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