Amazon.com Inc. recently received a U.S. patent that allows it to block the content consumers view on their smartphones if they are in an Amazon-owned store.
The patent allows Amazon to redirect shoppers to Amazon’s website if shoppers are looking up products on a competitor’s website. Amazon applied for the patent in May 2012 and the U.S. Patent and Trademark Office granted it in late May of this year.
However, there’s a catch: The patent states that the shopper must be on a retailer-provided Wi-Fi network, which means a consumer can get around the restriction by browsing via her cellular data. The patent refers to internet browsing applications, such as Chrome or Safari, and it is unclear if it applies to shoppers who are browsing competing products via mobile apps.
Amazon operates few retail shops—eight bookstores and one technology-amped convenience store—but it is expected to add 460 grocery stores to that total once it completes its acquisition of Whole Foods Market Inc. by the end of 2017.
The patent allows Amazon to roll out this showroom-blocking technology in Whole Foods stores, and it prohibits physical store retailers from implementing it unless Amazon licenses the technology. Amazon declined to comment on the patent.
The web giant, No. 1 the Internet Retailer 2017 Top 500, has numerous ways to profit from the technology, says Brian Klais, founder and president of Pure Oxygen Labs, a mobile marketing and mobile search engine optimization firm.
“Amazon can adjust their price in real time, based on the price displayed on the competitor’s page, by rendering a new dynamic price-comparison product page,” Klais says. “The patent also mentions displaying the competitor site in exchange for an affiliate or referral fee. Like ad-blocker apps, it sets up a scenario in which a retailer’s page may be displayed if Amazon gets a cut.”
When the patent was filed in 2012, showrooming was a concern for many retailers, Klais says. Showrooming involves using a mobile device in a store to get more product information or find a better price on the web and buying an item online. This Amazon patent could have been a defensive move to keep Wal-Mart Stores Inc. (No. 3) or Target Corp. (No. 20) from implementing this technology in their stores and prohibiting shoppers from checking prices on Amazon, he says. 61.5% of shoppers said they have used their smartphone in a store to check prices on a competitor’s website, according to a 2016 Internet Retailer survey of 366 consumers.
Amazon, however, is a forward-thinking retailer that may have developed the technology five years ago knowing it would one day own physical stores where it could leverage such technology, says Brendan Witcher, Forrester Research Inc. analyst. “Amazon is very good at addressing the possible.”
But just because Amazon has the technology to prevent shoppers from price checking while in stores doesn’t mean it should implement it, Witcher says.
“Consumers judge brands by how much they can trust them. If you are not allowing them to shop the way they want, shoppers won’t trust you as a brand,” Witcher says. “Retailers have had the mindset that they should be doing what is in the best interest of the customer, and allowing them to shop the way they want hasn’t been a question. The patent raises [this issues] as a question for the first time.”
A retailer risks annoying a shopper if it limits how she can browse the internet, but no one knows what Amazon’s strategy is behind this patent, Witcher says.Favorite