Priceline to retailers: Love the Web

Walker compared the Net to telephones, electricity and the interstate highway system -- advancements that didn't just create new markets, but changed the way existing markets worked.

"It's not about competing with retail stores, it's about working with retail stores," Walker told attendees at the National Retail Federation's e-commerce show here. "Those people who understand that the Internet is not something you go on, (that) it's something you use, like electricity or phones, will be the winners."

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So retailers need to use the new technology to appeal to those consumers in ways they know will work. And one way to appeal to consumers is price.

Price always wins
Not too surprisingly, Walker, whose Priceline.com business is built around letting consumers set their own price for items including airline tickets and hotel rooms, said dynamic pricing will take over much of the retail world.

In a competition between price and convenience, "in America, price will win," he said.

But that doesn't mean there isn't a role for the convenience that the Internet and new technologies can bring to consumers. And in particular, voice recognition will truly enable the "Internet revolution," he said.

"Right now if you want to use a computer you have to almost be a hobbyist," he said. Voice recognition will change the Internet retailing industry the way the automatic transmission changed the automotive industry, he said.

"It's not simply talking to the network, it's that the network will be able to learn from you," he said.