The show-rooming challenge
Apps like Amazon Mobile and the bar-code-scanning apps that check prices, like Red Laser, scare the bejesus out of traditional retailers, who see customers walk into their stores to check out goods in person, research features and prices from their smartphones (especially at stores like Best Buy where you can never really trust what the salesperson is saying), then buy online. It's called show-rooming, and it puts the fear in traditional retailers. Wal-Mart Stores is the exception; it welcomes show-rooming because its massive scale — it accounts for 8 percent of U.S. retail sales — means it can undercut almost anyone and has almost nothing to lose from the trend.
In fact, Wal-Mart has much to gain: It can use mobile apps to steer buyers to more self-service, said the retailer's vice president for mobile and digital strategy, Wendy Bergh, at the M-Commerce World conference this week.
For example, Wal-Mart has apps that let customers create shopping lists. That's a common feature in retailers' mobile apps, but Wal-Mart goes further, calculating the costs as people add and delete items both before shopping (26 percent of Wal-Mart customers use the mobile app or website before entering the store to begin their shopping) and while shopping, so they can stick to their budgets. The app also shows where the desired items are located, so fewer clerks are needed to direct patrons.
The chain is also testing mobile self-checkout, where shoppers scan their purchases as they shop and transmit the list to Wal-Mart; shoppers then go to a cash register on the way out where their carts' contents are quickly compared to the mobile-generated list, and payment is handled automatically — similar to buying music from the Apple iTunes Store or a product from Amazon.com.
If you're not Wal-Mart or Amazon, though, what do you do about show-rooming? It's illegal to block cellular signals, after all.
A good friend of mine works on shopping and inventory systems for a major national department store, and it's clear the traditional retailers are struggling with m-commerce, just as they typically haven't really figured out old-fashioned e-commerce either. My friend has a notion that retailers very much divorce the in-store experience from the online experience, and customers feel that and get frustrated. It's apparent that Wal-Mart understands the need to treat them as part of one experience, even though as Bergh says it's a major effort to bring all those operations and systems together.
Take an example I experienced recently when shopping for shirts. I like Oxford collars (the ones that button down), despite the fact they are out of fashion and difficult to find much selection for. I found a nice line at this retailer (not my friend's) and a couple colors in my size that I liked. There was also a color I liked not in my size. I had to track down a sales associate to see if they had any in the backroom, and when he came back and said they did not, that was it. I "bounced" on that purchase, as one would say on the Web to refer to someone who goes to a page, doesn't see what he or she wants, and goes elsewhere.
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