Amazon’s Fire Phone May Be Good For Showrooming, But Its Impact On Retail Won’t Be Immediate

Now that Jeff Bezos has unveiled the Amazon Fire phone, all eyes are on whether or not it will make a dent in the smartphone market and contend with hardware heavyweights like Apple and Samsung. But another question is whether it could disrupt the retail experience, which has always been one of Amazon’s top goals.

Fire comes with a new feature called Firefly that allows users to take pictures of any object around them, bringing up useful information about what was snapped.

This sort of feature is perfect for a retail environment. For example, if I go to a store and see shoes, I easily can snap a picture with Firefly and then find the pair for a cheaper price on my phone. This functionality leads some, including mobile analyst Horace Dediu, to call the Fire phone, at its heart, a “showrooming” device. Showrooming is already prevalent because it’s often cheaper to buy online in a multitude of retail industries (see BI Intelligence chart below).

The Fire phone makes showrooming just that much easier.

Bii online offline price savings

Does this give the Fire a potential leg up for attracting customers?

In the long-term, Alexis Rask, chief revenue office of shopping app Shopkick, tells BI Intelligence she sees the possibility of Fire becoming a more widely-used item, one that could disrupt bricks-and-mortar retail. But in the near future, she doesn’t see a huge impact. She points to the Forrester projection that says U.S. e-commerce sales could reach $US300 billion by 2015. While large, that number is not even 10% of the projected $US3.6 trillion in sales for all of U.S. retail commerce. Given that Amazon will only represent a portion of total e-commerce sales, “I don’t think [the Fire phone] will represent a significant percentage of that $US3.6 trillion,” Rask explained.

Not to mention the fact that it takes quite a bit for happy phone users to defect to a new device. “Consumers would need time and reason to switch from the devices they love to a new one,” she told BI Intelligence. In short, while Amazon does pose a significant threat to legacy mum-and-pop retail shops, it’s unlikely that Amazon’s new phone will cause a significant disruption on its own in the next few years.

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Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.