Paribus Promises Online Shoppers Receive "Best Price"
‘Tis the season to be jolly, especially for consumers who score amazing deals from retailers. And as Hans Klis reports, an app from startup Paribus is trying to find the best bargains by taking advantage of the best price policies of online retailers.
Consumers bargain hunting for everything from discounted designer sweaters to the latest tablets can spend hours comparing prices in person, scanning bar codes, or even using price comparison sites while online shopping.
The Brooklyn-based startup Paribus wants to make finding the best bargain during the holiday season as easy as possible. How? By doing all the work for the thrifty consumer. The service – a web and iOS-app - takes advantage of the best price policies of online retailers.
For example: on its website, Best Buy offers to “match the product prices of key online and local competitors.” But it takes a lot of time and effort to find out if your headphones are cheaper at any of the other thousands of retailers in the US. Paribus’ algorithms automatically scan your email inbox and Amazon-account for the invoice and matches it to the same product on dozens of major ecommerce sites.
If there is a price difference then Paribus files a request for a rebate at Best Buy. The money gets transferred to your credit card account and you’ve just paid the best price available for the headphones just by signing up and never lifting another finger. All these activities can be monitored on the Paribus dashboard. An email alerts users to money being transferred into their accounts.
Who said that there was never any money to be made on the consumer side of retail? Marc Atiyeh jokingly asks in a trendy coffee spot in Williamsburg. He’s the head of development at Paribus. He adds, “There are millions if not billions of dollars that retailers owe customers. So here is Paribus, to claw back the money you’re owed”. Best price policies are meant as a service to the customer but most people tend not to take advantage of them, he says. A recent Reuters story estimates that fewer than 3 percent of consumers do so.
Amazon alone changes the price of more than 80 million consumer goods every day, Forbes wrote in 2014. That number reached three billion in November according to Atiyeh: “The technology on the seller side is amazing. Amazon is a multibillion-dollar company. They spend millions to learn about what consumers may or may not buy and at what price. You might buy a tennis racket for $200 but I wouldn’t. Maybe Amazon will offer me a deal for $150. It tries to maximize revenue on each consumer and potentially oversells its items.”
Atiyeh contends that Paribus is doing something very important in the retail space: empowering consumers.
Going after rebates is catching on. Paribus launched with 8,000 users in May after a beta-testing phase. Since then its user base has grown to more than 60,000 just before Black Friday. Atiyeh hopes to get three times as many at year’s end: “How much are we saving people? It really depends on how much you buy. Just today we saved someone $450 on a dress that went on sale,” he wrote in a follow-up email.
On average Paribus saves users five to ten dollars a month. The service pockets a commission of 25 percent (for each new user you recommend that uses Paribus, the company slashes 5 percent).
That’s not a lot of money for either Paribus or the user, but keep in mind that consumers are increasingly buying their products online. According to The National Retail Federation consumers chose to do almost half of their Black Friday shopping online in 2014. That's growth of more than 44 percent from the prior year.
This Thanksgiving the sales at physical stores fell from $11.6 billion to $10.4 billion, retail researcher ShopperTrak notes, while online sales grew with 14 percent to a $2.72 billion. Cyber Monday (week) and last minute online sales are expected to further boost these numbers.
With this increase in online shopping, competitive pricing is increasingly becoming more important. The launch of “Amazon-killer” Jet.com this summer illustrates this, according to Stephan Gans, chief strategy officer at the North American brand consultancy firm Interbrand. He says, “Before Jet there wasn’t a platform that consolidated different types of products, like Amazon does, but that positioned itself as the cheapest. In every retail market this segment is growing successfully.” Jet offers prices that are around 5 percent lower than Amazons. Consumers want convenience when shopping online, but also the lowest prices. Maybe the latter is more exciting than speedy delivery by drone or robot.
That is why Paribus is not the only service out there focusing on price differences between retailers. Companies like Slice, Invisible Hand and Amazon-price checker Camelcamelcamel offer notifications when prices drop for selected items. But Paribus is the only one that actively goes after ‘what you are owed’ without the user doing anything.
The one snag potential users might encounter is the fact that they give Paribus access to their email and Amazon account and their credit card number. Recent hacks at retailers like Walmart and Target do cause some slight hesitation when you are signing up for a service like Paribus. It may be a leap of faith for a lot of people,.
Potential users should not be worried about privacy though, Atiyeh asserts. The Paribus algorithm does not read your emails but searches for certain characteristics of invoices and the communication is encrypted. The credit card transactions are carried out by Stripe payment software, which is also used by Kickstarter and Lyft. “What do consumers want? Wouldn’t they rather just lean back and get their money back or do they really want to be sending us invoices each time they shop online?”
Paribus is betting on the latter, promising to open up a world where consumers always buy at the best available price and where every day of the year can be a Black Friday, but without the hassle.