BUSINESS CASE: TheFind Finds the Cheapest Price

In Sunnyvale, California, Tri Trang walked into a Best Buy and found the perfect gift for his girlfriend, a $184.85 Garmin GPS system. A year earlier, he would have put the item in his cart and purchased it. Instead, he whipped out his Android phone; using an app that instantly compared Best Buy’s price to those of other retailers, he found the same item on Amazon.com for $106.75, with no shipping charges and no sales tax. Trang proceeded to buy it from Amazon, right there on the spot.

Courtesy of TheFind, Inc.

It doesn’t stop there. TheFind, the most popular of the price-comparison sites, will also provide users with a map to the store with the best price, coupon codes and shipping deals, and other tools to help organize purchases. Terror has been the word used to describe the reaction of brick-and-mortar retailers.

Before the advent of apps like TheFind’s, a retailer could lure customers into its store with enticing specials, and reasonably expect them to buy other, more profitable things, too—with some prompting from salespeople. But those days are disappearing. According to one study, 73% of customers with mobile devices prefer to shop by phone rather than talk to a salesperson. Best Buy recently settled a lawsuit alleging that it posted web prices at in-store kiosks faster than the ones customers saw on their home computers, a maneuver that would have been quickly discovered by users of TheFind’s app.

Not surprisingly, use of TheFind’s app has increased at an extremely fast clip. The number of people making purchases on their phones nearly doubled between 2011 and 2012. Indeed, retailers are expecting even more shoppers to use their phones to make purchases in the coming years. The accompanying figure illustrates their projections for dramatic growth in cell phone sales through 2016. On TheFind, the most frequently searched items in stores are iPhones, iPads, video games, and other electronics.

Expected Growth in Cell Phone Purchases in the United States, 2010–2016 Source: Forrester Research Mobile Commerce Forecast, 2011 to 2016 (US).

According to e-commerce experts, U.S. retailers have begun to alter their selling strategies in response. One strategy involves stocking products that manufacturers have slightly modified for the retailer, which allows the retailer to be their exclusive seller. In addition, when confronted by an in-store customer wielding a lower price on a mobile device, some retailers will lower their price to avoid losing the sale.

Yet retailers are clearly frightened. As one analyst said, “Only a couple of retailers can play the lowest-price game. This is going to accelerate the demise of retailers who do not have either competitive pricing or stand-out store experience.”