Just in time for the holidays, a new service called PriceLocal promises Internet shoppers an easy way to get “Amazon prices” on products available at local retail stores. The new web tool is designed for people who shop online, but want or need that item now – and those who simply prefer to buy locally to support businesses in their community.
“We’re trying to take ‘showrooming’ and turn it on its head to drive customers back into local stores,” said PriceLocal founder Matt Chosid.
Showrooming is when a customer shops for a product at a brick and mortar store, where they can touch and feel it and get information from a salesperson, but then goes online to buy it at the lowest price.
PriceLocal allows customers to do their research online and then make their purchase at the store, knowing they are getting the “Amazon” price. Chosid calls it “a win-win” for shoppers and retailers.
“We’re trying to help retailers compete a little bit better against the Amazon juggernaut and help consumers shop locally and get a product today at a fair price,” he told NBC News.
PriceLocal is a browser extension that’s simple to use: Find something you like on Amazon, click the PriceLocal button and wait for a response from a local store that will match the Amazon Prime price for that item.
You do not need to be an Amazon Prime member to use PriceLocal. The company decided to limit its service to Prime products (no shipping charge) to reduce any confusion when comparing prices.
Larry Freed, PriceLocal’s chief strategy officer, believes the new service has enormous consumer appeal.
“In all honesty, these consumers are not going to stop shopping at Amazon,” Freed said. “But there are times when they want to shop at the retail store and this is going to give them the capability to do it.”
Despite the growth of online sales this year, more than 90 percent of all commerce still takes place in the physical world, Freed noted.
PriceLocal launched nationally in mid-November, following a pilot test in Michigan last year. While he would not provide specific numbers, Chosid told NBC News there was “fantastic demand” during the beta test with some retailers receiving hundreds of product requests.
Chosid said since the national rollout on November 18, thousands of people and hundreds of retailers across the country have joined the program.
The nuts and bolts
Retailers who sign up with PriceLocal receive a text when someone in their area is looking for the type of product they sell. If the store can match the Amazon Prime price on that item the customer is emailed a coupon that they can print or show on their phone at the store.
The retailer also has the option to either offer to order the item or sell a comparable model in stock at the Prime price.
Eric Barnes co-owns two Ace Barnes hardware stores in Ann Arbor, Mich., a business started by his grandfather in 1939. His stores received nearly 400 leads during the PriceLocal pilot test.
Barnes doesn’t have any hard numbers, but he is sure PriceLocal resulted in sales to people who didn’t know he carried the item they wanted.
Sometimes matching the Amazon price meant selling something at less than the normal in-store price. Barnes figures that if he can get that customer into the store, he might also be able to sell them something else.
“We love the brick and mortar part of the business,” Barnes said. “Yes, we have higher overhead, but we sell things by giving them customer service and if we can still do that and fight off the big boys like Amazon, I’m all for it.”
The Price Local service is free to retailers and customers. So far, the company hasn’t said how it eventually plans to make money on the program.
Does it work?
Lisa Markham, who lives in Ann Arbor, does a lot of her shopping online because it’s so convenient.
“I would really rather frequent more local stores and keep them in business, but that’s hard because you can’t do the same research in the store that you can do online,” she said.
Markham used PriceLocal to buy the patio furniture she saw on Amazon from Big George’s Home Appliance Mart, a small independent store in southeast Michigan.
“This is now my preferred method of shopping,” she said. “I can get the reviews on Amazon and then buy at the store. I’m willing to get into my car and buy it here to support the store and get it in my hands almost immediately.”
Mark Bishar, vice president of marketing at Big George’s, said they received more than 300 leads during the beta test. He still uses the service because, for a retailer, traffic is everything.
“Initially, I was terrified that I was going to have to be overly-aggressive with my prices,” Bishar told NBC News. “You usually think Amazon is the lowest price out there, but sometimes we’re glad to take that margin because it’s not that bad.”
Will this new service fly?
“Consumer psychologist Kit Yarrow, author of the book Decoding the New Consumer Mind: How and Why We Shop and Buy, said PriceLocal “sounds wonderful,” but she wonders how many people will want to shop this way.
“Most people who order online want to get that purchase off their plate,” Yarrow said. “If you have to wait even an hour to hear back, I think it loses a lot of the allure. That’s the whole point of the Internet – and why people love Amazon – the immediacy.”
To be successful, PriceLocal needs to win over both customers and retailers. It’s the classic chicken-and-egg scenario.
“You need enough buyers to go there and click or there won’t be enough sellers coming into play,” said Professor Suresh Kotha at the University of Washington’s Foster School of Business.
Kotha downloaded the PriceLocal plug-in and tried to find a few basic products. He never heard back. Yarrow had the same experience and so did I.
“If you try it once, get all excited and nothing happens, then the next time you won’t wait, you just buy from Amazon,” Kothan said.
What does Amazon think about PriceLocal? We asked, but the company did not respond to our request for a comment.
“This really isn’t about taking on Amazon,” Freed told NBC News. “Amazon has a lot of advantages. They’re doing a great job and they’re killing it in the online world. If you’re an Amazon shopper – I’m an Amazon shopper – we’re still going to buy a lot of products from them. But there are times when we want a product right now, and this helps me get it.”