So Amazon gets a list of everything you're interested in offline as well, even if you don't buy from them. Sounds like win/win for them!

At least customers get paid for giving them that information (in the form of the discount that the price-matcher gives). I've done it, too, at Fry's when I needed some hard disks and a laptop on short notice. Saved about $100 in one trip (they were expensive hard disks), just by pulling up Amazon and pointing at the price for the service rep.

Competition is good.

I can't believe so few people know about this. Fry's and Best Buy both price match reputable online retailers ("Sold by Amazon" or whatever they say when Amazon is the retailer and distributor) and I just get all of my hardware like that. For the cost of gas, I get it instantly and can instantly return DOAs instead of waiting for RMA or Amazon returns. In the case of lower cost products like USB cables, which have been the target of counterfeiters and fraud on Amazon, it prevents damage to other devices because the physical retailers are generally more careful about sourcing.

Even if the store didn't price match, you can get the price match from using a credit card that has a good price protection (like Discover) and submitting a claim (very easy in my experience).

Not really. He bought the product from someone else. If Amazon didn't need the money and just wanted the analytics, it would have undercut the physical store. The value of the analytics would be in the sale to another company to market to this person, but they fulfilled their need for the product when Amazon acquired the information. So it didn't benefit Amazon and by the time they could have sold it to a third-party, it was useless.

Simply by looking at a product will build a user profile. It's not about making this sale, but maybe about the next 100 sales.

Sure, but money isn't quantum physics. If he doesn't spend any money on Amazon or any other online retailer, how are they monetizing his time on the site?

They see he likes products x y and z. Another 20 customers like products x and y, so nudge them towards buying product z

No, what they see is that he looked at x, y and z and didn't buy anything. Why would it nudge the next guy towards z? "Other people who did not convert also did not convert after seeing THIS!"?

Ok so my example was obviously too simplified

Users a b and c all at some point search for information on products x y and z. Many users, many products.

User d comes along and has previously looked at product z and is now searching for product y. It's now worth putting product x in the "you may also be interested in" segment. It might land a sale, it might not. That data can then be added to the pool to decide if they should show product x to people who search similar products

Why bother at all if they didn't purchase? You don't know why they didn't purchase. Maybe they were shopping around, maybe they were price matching, maybe they just don't have the cash right now.

It's machine learning, not if statements.

Adding a bunch of non-converting user behavior to your machine learning model won't help you or anyone else make a single sale. Best Buy got the sale. They got all the meaningful analytics along with it.

All you got from this person is that they looked at two products. Maybe those two products are related, but maybe they aren't. Adding this to your model is just adding noise to the "people who liked this also liked" references, and Amazon surely already has better qualified data for that (i.e. actual conversions).

They're already pretty good at determining that without scanning items in a store.

Home depot does not price match IME. I tried to buy a portable AC a few weeks ago and they wouldn't price match against anyone.

YMMV, but Home Depot absolute does match prices in-store if you bring in a printed page from a major retailer. They have plenty of carve-outs: no auctions (eBay), club stores (Costco) or 3rd party sellers (Amazon marketplace, Walmart marketplace). But it's basically the same most price-match policies at Staples, Best Buy, Fry's, etc.

http://www.homedepot.com/c/PM_New_Lower_Price

Home Depot does price match, but you do have to watch out for the carve outs. I most recently tried to save quite a bit of money on my kitchen appliances. However, they only price match "in stock" merchandise. They had to order these units so no price match for me.

So it appears in practice Amazon is cheaper, at least until local stores price match.

On some items, yes.

I'm worried / interested in what happens when Amazon starts in Australia. At the moment, I can get a limited selection of products delivered here in about a week and a half, often at a saving of 25-50% from the local price. Other things aren't even sold here - I think the last thing I encountered was trying to find a 4K HDMI switch - only available on Amazon US. I wonder whether my available selection will increase or decrease when Amazon "officially" starts here.