Smartphones cause retail problems and opportunities

Black Smartphone, blue screen with icons. IsolatedRetailers are facing a major threat to their traditional ways of working. Most bricks and mortar retailers have benefited over the years from what you might call “customer intransigence”. People tend to go  into a real world physical store, find the item they want and buy it. Rarely do they price compare, for instance. That’s because it is too much hassle; the nearest store to make the comparison could be a long walk, even a drive away. People trade not getting the best price for the convenience of getting the item immediately.

Online retailers have been quick to realise that price comparison is easy on the web. It is only a click or two away to find an alternative website with keener prices or better delivery terms. The world of online retail is much more competitive than the bricks and mortar world.

Until now.

These days smartphone users are price comparing within bricks and mortar stores. They see an item they like, get out their mobile phone and check the price on the website of another local store. According to a recent survey of smartphone users 70% of them do this. In the past, to find out where the cheapest deal was it involved lots of shoe leather…! Now it is just your thumb that gets the exercise.

This is different to “showrooming”. Indeed, the research shows this is  one of the least popular uses of a smartphone when in a physical store. Showrooming is the practice of going into a bricks and mortar store so you can touch and feel the item you want to buy and then going on to your phone or your tablet or even waiting until you get back home to your desktop and buying from a website. Showrooming is not as popular as retailers might think.

Far more popular is price comparison – something that shoppers in physical stores used to be reluctant to do. Now they can do it with a flick of their thumb.

It means that retailers are going to lose sales unless they offer keen prices or added value. Or they can do something else – something that the survey reveals that shoppers in physical stores love.

They love receiving offers or vouchers from the store they are in. That means retailers can keep those smartphone shoppers in their stores if they know they are there and can send them an instant voucher. A bit of discount would be better than losing the sale as a result of price comparison.

However, this means you need to know where your customers are – you need their details and they need location-based software switched on. The alternative is to use Bluetooth to target all devices in the store, but that is fraught with problems, not the least of which is people keeping Bluetooth off to preserve battery life.

With location-based software switched on by default though it also means a store’s competitors know that a shopper is in a bricks and mortar store. In my book Click.ology I explain how this was done to huge success by one shoe store “stealing” customers from a major nearby retailer. What’s more,  even online retailers can target people inside physical stores with a price competitive voucher, taking the customer away from the bricks and mortar  shop.

The increased use of smartphones in shopping means it is about to get a lot more competitive for bricks and mortar stores; they have had it too easy for too long, some might say.

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Graham Jones
Graham Jones is an Internet Psychologist who studies the way people use the online world, in particular how people engage with businesses. He uses this knowledge to help companies improve their online connections to their customers and potential customers and offers consultancy, workshops, masterclasses and webinars. He also speaks regularly at conferences and business events. Graham is an award-winning writer and the author of 32 books, several of which are about various aspects of the Internet. For more information connect with me on Google+
Graham Jones

@grahamjones

Graham Jones is an Internet Psychologist, professional speaker and author of 32 books who helps businesses understand the online behaviour of their customers
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