KnowThis Blog Postings
- Published on October 11, 2010
- Posted by Paul Christ
Game Changer (Stores Magazine)
It is a challenging time to be a retailer in the U.S. and in many other countries. On the economic front, conditions continue to be a concern. With unemployment rates not falling, credit remaining tight and uncertainty existing across nearly all industries, consumers are reluctant to expand their spending. But, once things do recover retailers may face an ever bigger problem – a smarter customer.
Since the beginning of buyer-seller transactions in ancient retail marketplaces, sellers have benefitted from consumers' lack of information. Seller have used this to their advantage in several ways including charging higher prices for products that can be purchased elsewhere at lower rates; getting consumers to make purchases of products that are not all they are advertised to be; selling consumers on the need for additional products or services such as protection plans; and many others. This is not to say retailers deliberately take advantage of consumers (though some do), but to suggest consumers are often not fully informed when entering a retail transaction. Technology, though, is changing this.
Consumers have spent the recession figuring out how to use technology to improve their purchasing power. The obvious technology is the home computer and its connection to a wide array of helpful information sources (e.g., coupons, product reviews, discussion boards, social networks, search engines, etc.). Now, this experience with information gathering is moving outside the home as the consumer takes these devices with them to retail stores.
According to this story, retailers are dealing with more and more consumers using mobile devices as part of their shopping experience. Now retailers not only have to deal with consumers possessing more knowledge about products, but they may also be experiencing consumers who have a much stronger bargaining position and are willing to leverage it (e.g., “According to what it says on my cellphone app the store down the road is selling it for less…”).
For some retailers, the empowered consumer could expose flaws (e.g., poor cost control, poor customer service). Yet other retailers see the connected consumer as an opportunity and are finding creative ways to use these technologies to capture their attention.
On the technology front, new applications that aid and abet mobile marketing and m-commerce seem to pop up daily. There are apps that identify and reward shoppers as they walk into a store and others that allow consumers to give and get gift cards, receive personalized offers and monitor their loyalty programs from their mobile devices. There are tools that allow smartphone users to leverage social features as they shop, and apps that allow consumers to make purchases using only their smartphone.
Just how important is the consumers’ utilization of mobile devices during retail purchases? Is this truly a turning point for retailing?
Image by alexbcthompson