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Politics : Ask Michael Burke
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To: upanddown who wrote (41645)12/31/1998 11:29:00 AM
From: Todd Reichardt  Read Replies (4) of 132070
 
Shopbot thoughts

Reminds me of a long distance company (name escapes me) my better half signed us up for years ago. The company would "shop" your long distance for you each time you picked up the phone. If AT&T was cheapest at the moment you picked up the phone, then you'd get AT&T service, if Sprint was cheapest, then you'd get Sprint service, etc.

Sounds like a good idea, but it fails because you often get the best prices by being involved in a long distance providers package like "friends and family". The long distance shopbot didn't access the packages so it didn't get AT&T's or Sprint's or MCI's ... best price on any call.

How many people simply stay with AT&T because they're in one of AT&T package "deals" and they don't want to go through the pains of figuring out which company and package will give them the best deal?

Same thing could happen to internet book sales. Say Amazon comes out with a "valued customer" program, where you get 5% off everything. Then B&N comes out with a "big buyer" program, where you get 2.5% off the first $35 worth of books you buy then 6.5% off any additional books you buy that month. Shopbots have a very difficult/impossible time of giving you the "best" price. Company's no longer compete on a straight price level as some people give up, go where they're comfortable and happily take the 5% discount that Amazon gives them (or maybe the 2.5/6.5 that B&N gives them). Since people are no longer shopping on straight prices, marketing comes into play.

Please note that I'm not making a case to buy Amazon, just saying that shopbots might not kill them.

Todd

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