The Perspective 
Monday, 11 June 2007
The writer is a senior analyst on Forrester’s Marketing and Strategy team.
 
Retailers struggle to adapt as the online channel shifts the balance of control into consumers’ hands and increases pressure on stores to deliver superior experiences. Consumers who research products online before buying them offline will influence more than $500 billion of offline sales in 2007.
 
Now, retail’s newest sales channel, mobile, promises to change the dynamics of shopping yet again.
 
Over time, mobile will bring three new attributes to the multichannel shopping experience — portability, location awareness and ubiquity — characteristics that bring consumer control to a whole new level.
 
More than three-quarters of households in the United States (88.4 million), own at least one mobile phone; the average is two per household. As carriers continue to offer low-cost services such as prepaid and family plans and as new entrants target underserved segments, Forrester predicts household penetration in the U.S. will exceed 85 percent by the end of the decade, outstripping the Web.
 
As U.S. consumers grow comfortable with using mobile devices for activities beyond voice, the mobile channel stands to exert a greater impact on their shopping habits. Although buying products through the mobile phone still is far from becoming mainstream, using the device as a self-service tool to aid in the shopping experience is much more imminent.
 
As the form of mobile commerce with the lowest consumer risk and greatest value proposition, product search will be the starting point to mobile shopping for most consumers. Mobile applications for search and comparison are emerging to aid shoppers and give them more control at the point of decision. SCANBUY, for example, enables shoppers to compare retail prices with online prices by taking a picture of the barcode or tapping the barcode number into a downloadable mobile application. The application then retrieves prices for the product from online comparison shopping engines.
 
GPShopper, which has more than 100,000 users through its mobile application, lets consumers search for products at local stores and compare prices and promotions. NearbyNow, another local search-based application, gathers local inventory feeds from mall-based stores; when users search for specific products, the application sends back an SMS detailing which stores carry the product and whether it is in stock.
 
Mobile-based product search threatens to turn brick-and-mortar stores into showrooms for Web-tailers such as Amazon.com and other lower-priced online pure plays as consumers compare prices while in-store. So not only do retailers have to compete with low-priced online pure plays in the Web channel, now they have to do so within their stores.
 
Retailers can’t fight consumers who want to compare retail store prices to Web prices; instead, they should give consumers an incentive to identify themselves through their mobile devices when in the store, which will provide an opportunity to target in-store shoppers. This requires store-based technologies such as Bluetooth-enabled kiosks and, eventually, mobile-location-aware services that can engage consumers when they are in the store and help to prevent them from defecting to a competitor.
 
Local search also takes center stage as on-the-go consumers search for products and where to buy them. This places pressure on retailers to release local store inventory data (when available) to engines such as NearbyNow, Channel Intelligence and ShopLocal, and to begin buying keywords on local search engines and general search engines.
 
There is no rest for the weary retailer as consumers increasingly connect themselves to new channels and to each other, arming themselves with information to make smarter decisions and take control over a process that traditionally has given retailers the upper hand. Retailers that want to succeed in this new world are given little choice but to engage with consumers on their terms and use technologies of their own to grant them entrance into consumers’ connected lives.
Posted by: Tamara Mendelsohn AT 12:55 pm   |  Permalink   |  0 Comments  |  
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