Online retailing: The mobile allure

PayPal operates among an array of online price trawlers, product review sites, discount coupon hawkers and social networks. This cacophony of internet shopping options has all but replaced the mall.

The transparency and convenience of “mobile commerce” have given Americans the upper hand over retailers, according to PayPal President Scott Thompson, who echoes the connect-and-inspire ideology of Silicon Valley when he says: “The consumer ultimately holds all the power.” Indeed, for many traditional retailers, rising competition from the internet has capped sales growth, squeezed profit margins and forced them to re-evaluate how they use their store space. But a closer look at the world’s largest e-commerce market suggests a more complex picture, in which some iPhone-toting shoppers – whether they want fair prices, greater choice or no hassle – are sacrificing as much to the internet as they gain from it. Online life has evolved to the point where many consumers this Christmas have implicitly signed up to a new but often unrecognized trade-off between the benefits and costs of America’s fastest-growing way to buy. Christopher Elliott, a consumer advocate and author of forthcoming book Scammed, says: “Companies benefit from the perception that if you’re a good consumer and you do your homework, everything will be fine. But what they don’t tell you is that in a digital age they can quietly manipulate the information we get to such an extent that being an informed consumer is an illusion.”