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Amazon’s Fire Smartphone Rekindles Showrooming Debate

Amazon’s first smartphone, the Fire, may be the handheld device bargain hunters have been pining for, and consequently, what brick-and-mortars have been dreading.

The world’s largest online retailer unveiled the phone this week, which along with the bells and whistles consumers have come to expect from a $199-priced phone, comes equipped with Firefly, an Amazon-exclusive component that allows users to point their Fire phones at any consumer object in the real world and then browse for it on Amazon.

Using image, text and audio recognition technology, Firefly identifies objects and then saves them as photos. When a user taps on the image, they are redirected to the Amazon sales page.

The company did not specifically name apparel or footwear as products Firefly can match, however, during a presentation, Amazon CEO Jeff Bezos demonstrated the tool by snapping photos of a book, DVD and a jar of Nutella, then revealed the corresponding Amazon product pages.

The tool can also identify printed web and email addresses, phone numbers, QR and bar codes, artwork and over 100 million items spanning songs and movies to exotic fruit, Bezos noted.

And in the race to offer the fastest customer service, Firefly excels as users can even bypass the device’s lock screen to be taken to a product page. The feature has its own dedicated button on the side of the phone to access products effortlessly.

Critics claim that Firefly could take showrooming to a new and damaging level. “It’s showrooming on steroids, absolutely,” John Jackson, an IDC analyst who covers mobile technology, told WSJ. With an increasing number of consumers raised on touch screen technologies, Jackson said the launch of Firefly should serve as a reminder to retailers that they have little choice but to adapt to the way these technologies are evolving.

For a company deeply embedded in the history of e-commerce, it should come as no surprise that a superior shopping application was top of mind in the development of Amazon’s first phone. According to a recent report by xAD/Telemetrics, one-third of shoppers now claim to use mobile exclusively, surpassing desktop computers. Mobile devices account for 64 percent of time spent online.

However, consumers are not finalizing purchases on their mobile devices as much as e-commerce companies would like. Research firm Gartner revealed that, globally, shoppers spent approximately $235.4 billion through mobile payments in 2013. Consumers in North America accounted for only $37 billion of those transactions, a small amount for a customer base that is projected to spend $482.6 billion online in 2014.

The Fire phone still has the daunting task of selling against the likes of Apple’s iPhone and Samsung’s popular Galaxy S5, as well as a host of easy-to-use shopping apps, including fashion-finding ASAP54, which searches for apparel via image recognition. “I’m a little skeptical of its ability to penetrate the market because the market is very tough and competitive for newcomers,” Tuong Nguyen, a Gartner analyst, told WSJ.

Amazon’s Fire is available exclusively at AT&T. Prices for a 32GB model start at $199 with a two-year contract. A 64GB model will retail for $299. Shipping begins July 25. Early adopters will receive a free year’s subscription to Amazon Prime, which offers two-day shipping, free streaming on Prime Instant Video and access to the Kindle book-lending library.

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