Although perhaps not willing to admit to it, many people are guilty of having gone into a shop and used their phone to check if a prospective purchase was available more cheaply elsewhere, including online. Some shoppers are even using bricks-and-mortar stores as a showroom for an online purchase, not necessarily tied to that particular business. Smartphones have made this whole process “point-and-click” by enabling shoppers to scan a bar-code to look up a product’s details and then return a price comparison tailored to their location. Not surprisingly, with few exceptions, the retail industry in Australia has reacted to this phenomenon by either pretending it doesn’t exist or by trying defensive strategies like charging fees to shoppers who come into a shop to browse.
Retailers Gain from Technology Too
The salad days of being able to charge the uninformed public a premium over your competitors are very nearly over. But the retail future is not all gloom. The use of smartphones in stores offers businesses an opportunity to interact with customers in a range of ways that go beyond simply putting informed salespersons in their way. Indeed, a recent report has highlighted how shoppers are now more likely to rely on their phones for information than talk to a sales representative in person. This is again not surprising as another common bugbear of shopping is the experience of store assistants giving you information about a product that they clearly aren’t that familiar with.
In fact, according to Nielsen, 80% of US smartphone owners have used their phone for “shopping-related” activities. The most frequent activity was finding the location of a store and checking the price of a product, followed by researching items and reading reviews.
The Nielsen report revealed another aspect of the way we shop and that is that we haven’t as yet moved wholesale to a “social mode” of shopping. Only a small percentage of shoppers actually write a review about their purchases or use social media to comment on their purchase. Other reports have highlighted that websites and other more “traditional” forms of information are still used more frequently than social media when making decisions about what to buy. This does vary however with the type of product being purchased.
There are companies that are taking full advantage of the flexibility offered by the mobile phone by creating virtual stores. Tesco Homeplus created 20 virtual stores in bus shelters in South Korea where shoppers could order their groceries by scanning QR codes (a square type of barcode) associated with a picture of the product sitting on a virtual shelf.
PayPal did the same thing in 15 Singapore subway stations to allow commuters to buy Valentines gifts. In Australia, Woolworths launched virtual stores at train stations in Sydney and Melboune earlier this year.
Woolworths is innovating in another area by trialling free WiFi in their stores. For Woolworths and other companies that have built an effective onlin strategy, it doesn’t matter whether shoppers in a bricks-and-mortar supermarket buy from the store or online and making it as easy as possible for the shopper is an effective strategy of making sure that purchase stays with your business.
This is an approach also taken by Apple who actively use their retail city showrooms as a conduit to their online store.
The added benefit of this for the retailer of course is all of the information that can be gleaned from what the shoppers did whilst attached to the wireless network.
Retail Tech: Who Wins?
The use of mobile technology when shopping will become more pervasive in the near future as it is another example of a technology use that is being driven by the consumer that will force even the slowest of businesses to respond. Retailers themselves will be able to use information about competitor’s pricing to become smarter about how they bring more value to their customers. It really shouldn’t be up to a customer to point out to a shop owner that they are charging twice the price of their next-door neighbour for the same product.