Shoppers Seeking Relief from Inflation Turn to Apps for Savings

Annie Taylor was about to spend a hundred dollars on a new pair of Steve Madden boots at the mall. However, she then recalled to check the Price.com app and discovered the same boots for a much lower price of around thirty dollars.

Taylor, a 31-year-old personal assistant from Los Angeles, expressed her satisfaction with the Price app after a friend recommended it to her. She exclaimed, “Price finds all these websites I never even knew existed and makes it easy to find deals. I was able to get a pair of $100 boots for only $67, so I was really pleased.”

Taylor is one of many Americans who are increasingly relying on apps and web browser extensions to compare prices, locate coupons, and maximize loyalty rewards from retailers and brands. These tools have been available for some time, but their popularity has skyrocketed due to the current high inflation rate. This economic shock has caused shoppers to look for new ways to save money, especially during the holiday season.

Data.ai, a company that tracks downloads, reported that in the first 10 months of this year, approximately 37 million US shoppers downloaded apps such as Upside, Fetch, and Price.com, which is a 40% increase from the same period in the previous year.

Small startups are a rare source of optimism in a tech industry that is currently experiencing layoffs and a decrease in growth. Investors view these popular tools as the digital equivalent of dollar stores, which tend to do well when people are being more frugal with their spending. Pitchbook data shows that venture capitalists have invested $461 million into price comparison and shopper loyalty tools in 2020, which is a 62% increase from the previous year and the highest amount since 2011.

Making investments on a yearly basisFetch, a popular company based in Madison, Wisconsin, was created by college student Wes Schroll. He was fed up with trying to save money by looking through supermarket ads, so he decided to drop out in 2013 to develop Fetch. Now, the company has a smartphone app that can scan receipts to verify purchases and give rewards. Schroll believes this was a major breakthrough for brands, as it allows them to see if their promotions are successful.

Fetch experienced a surge in popularity last year when Apple Inc. implemented new privacy regulations that made it more difficult for advertisers to monitor user activity. In April, Fetch secured $240 million in equity and debt financing, with Hamilton Lane as the lead investor. This investment valued the company at $2.9 billion. According to Sensor Tower, Fetch had 14.4 million app downloads by mid-November of this year, which is a 36% increase from the same time last year.

Schroll noted that since customers are not increasing their spending, businesses must incentivize them with something they value in order to get them to change their spending habits. Fetch provides users with points, which are funded by its retail and brand partners, that can be exchanged for rewards such as gift cards from Starbucks, Amazon, and CVS Health.

In April, Upside, a cash-back app, secured $165 million in debt and equity funding in a round led by General Catalyst, resulting in a $1.5 billion valuation for the Washington, DC-based company. Initially, the app was focused on gas stations, but now it works with grocery stores and fast-food restaurants. According to co-founder and Chief Executive Officer Alex Kinnier, who previously worked at Google, shoppers spend approximately $6 billion annually through the app. Sensor Tower reported that Upside had 11.3 million US installs this year through mid-November, which is more than double the amount from the previous year.

In order to remain profitable and draw in new customers, stores are turning to digital tools that can provide more accurate results than traditional marketing, according to Kinnier. Upside evaluates a retailer's staffing and inventory to decide what kind of deal it can offer that will both attract users and still be profitable. Upside only succeeds if its retail partners are successful, he noted.

Merchants are feeling the strain of inflation and understand that providing standard discounts can lead to a decrease in sales. According to him, they are able to gain additional business that they would not have otherwise obtained with the help of his services.

Fetch and Upside have been able to expand their reach by targeting areas that Amazon has not yet ventured into, such as restaurants, groceries, and gas pumps. Price.com, however, is taking on Amazon directly. Their iOS app includes a plug-in that allows users to compare prices while they shop on Amazon. Additionally, Price has a website and browser extensions for Chrome and Safari, with an Android app set to be released in January.

Price tracks the cost of over 1 billion items from 15,000 websites and retailers. According to CEO RJ Jain, it can discover customers a superior cost than Amazon in 25% of Amazon searches. The organization gets a commission from retailers on the business it sends their way, and the sum of cash spent through the stage has expanded 40% this year contrasted with a year prior, Jain said.

It is difficult to take away Amazon's devoted customers, including those who pay for Prime membership for shipping discounts and other advantages, because the company's online store is known for its low prices - even though that is not always the case. However, the abundance of ads on Amazon and Google search makes it difficult for shoppers to find the best deal, which should be beneficial for Price, according to Larry O'Connor, an investor in Price.

He noted that Amazon has some great offers, but also promotes items that are not necessarily good bargains. He added that Price can help customers identify better deals that are available.

Mike Vainisi, a video production worker in Los Angeles, decided to give Price a try after hearing about it at a social gathering. He was looking for a Sonos speaker, something he would usually buy on Amazon. To his surprise, he found the item he wanted on Price for $300 at Best Buy, which was $100 cheaper than other offers. Vainisi then purchased the speaker online and picked it up from a store close by.

He noted that it can be difficult to shop on Amazon and Google due to the abundance of paid advertisements. He added that price has had an impact on his shopping habits, particularly when it comes to more costly items.