Could Amazon's Fire Phone pose a threat to Retailers?

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Of recent, Amazon has become the source of one of the major smartphone innovations of 2014: the Amazon Fire Phone. After years of speculation and rumours, Jeff Bezos, Amazon’s Chief Executive Officer, recently unveiled the brand’s highly anticipated first own smartphone, brimming with features of all kinds, at an event in Seattle.

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[Tweet “Firefly, Amazon Fire Phone’s killer feature, claims to recognize more than 100 million products”]

While the device, centered around easy access to Amazon’s existing services, drew a lot of attention for its 3D-like display, the killer feature by far is the object-recognition technology called Firefly. This technology claims to recognize more than 100 million products and turns the phone into a one-touch information source for anything that can be viewed with the phone’s cameras.

For example, once Firefly recognizes the item scanned by a user, it displays a link to additional information such as metadata and buying options, at the bottom of the screen. It also uses audio recognition technology to recognize audio clips and serve consumers with related content or ads. This a huge attraction for advertisers who are focused on second-screen marketing.

While most users usually involve themselves in a time-consuming search trying to find the item they liked at the store at a lower price online, Firefly, is utterly frictionless. It allows users to bypass the phone’s lock screen by just pushing a button on the handset and be taken directly to the product page on Amazon in just one click.

[Tweet “How Amazon Fire Phone makes it easier than ever for consumers to go showrooming”]

Thus, while Apple and other companies are busy spending huge amounts of money building out physical stores as part of their retail strategy, Firefly is designed to push the e-commerce giant to invade every retail store on the planet and turn them into Amazon showrooms. The release of the Fire Phone also indicates that, today retailers have reached a point where they cannot afford to avoid Amazon any longer. It is highly crucial for them to figure out a way to partner with the e-commerce giant.

On the other hand, for many retailers, showrooming is old hat. In fact, according to a recent study by ShopperTrak, during the 2013 holiday season, retailers in U.S saw half the foot traffic they did three years ago. Some experts are even of the opinion that retailers need not fear the Fire Phone as most of them have already figured out how to combat this shopping habit using in-store pickup services, mobile apps etc. Moreover, with the rise in the adoption of beacons, retailers are now equipped to deliver highly relevant content and offers to in-store shoppers, right when they are about to make a purchase decision.

According to experts, however, there are a few mistakes overlooked by Amazon in its zeal to draw more users into its sprawling ecosystem of online shopping. With an exclusive two-year contract with AT&T and a high price tag of $199 in today’s time of falling smartphone prices, there are chances that the adoption of the phone might suffer. Another fundamental flaw is that the Fire Phone is ultimately designed to boost revenue for Amazon without any clear benefits for its users. Moreover, though it seems inevitable, there was no mention of mobile payments during the announcement. In the absence of frictionless payments, Fire Phone could suffer a setback, especially since it claims to provide a direct interaction between the retailer and the shopper.

However, Fire Phone, which will be available for shipping by July 25th, is already making brick and mortar retailers sit up and take notice.There’s no doubt that the idea behind the device is to make it easier than ever for consumers to go showrooming. Whether this will ring the death knell for brick and mortar stores is yet to be seen.