The internet-connected mobile phone may prove to be one of the most notable consumer innovations in the past century, but it may also be a headache for brick-and-mortar retailers who, over the past decade, have had to figure out how to adapt to a world increasingly engaging in ecommerce.

The reason the mobile phone is keeping retail executives up at night: comparison shopping on steroids. Thanks to comparison shopping websites, and dedicated comparison shopping apps, consumers can simply walk into a store, scan an item's barcode and search the web for a better price.

As the Wall Street Journal details, savvy consumers are increasingly doing just that. And that's potentially bad news for retailers because, as one consultant pointed out, "Only a couple of retailers can play the lowest-price game." Thanks to the economy, and the appeal of 'getting a deal', price is particularly important to many consumers. In many cases, the benefit of a better price (possibly coupled with no sales tax and free shipping) will outweigh the immediacy of being able to leave a store with product in hand.

But are mobile comparison shopping websites and apps really as scary as they might first appear? Probably not. Just as brick-and-mortar retailers were forced to adapt to the internet, mobile commerce in all of its various forms will likely provide retailers with new opportunities. The Wall Street Journal notes that an iPhone app offered by The Find, which was downloaded 400,000 times in the four weeks following its release, also helps retailers who are working with The Find:

...Best Buy now targets personalized advertisements to shoppers when the program detects that they are in stores such as Wal-Mart.

If shoppers use TheFind's free app to compare prices on TVs at Wal-Mart, for example, the phone gleans the particulars from their recent search and shows them ads of similar electronics for sale at Best Buy. The items aren't always identical, and the prices aren't always better, but it is an attempt by Best Buy to enter the competition, similar to the way that marketers now target special offers to consumers based on what they are searching for on home computers.

To be sure, retailers will have plenty of ways to use mobile technology to their advantage, and they can also adapt on the product side. A number of retailers, for instance, are offering customized versions of products that consumers can't find in other stores.

But at the end of the day, the best way for retailers to deal with the mobile phone is to focus on creating the right experience for the right consumer. Price is important, and in some markets, such as consumer electronics, competitive pricing is crucial, but in reality, the number of customers who will consistently drive across town to another store to save $3, or visit a store only to leave and purchase on after scanning a barcode, is probably a bit smaller than one might think. More importantly, these customers probably aren't the type of customers who will sustain healthy profit margins long-term anyway.

In short, the rise of the mobile phone as a shopping tool should be a positive thing long-term, even if the threat to brick-and-mortar retailers is slightly exaggerated. Scared retailers are more likely to be innovative retailers, and I'm sure many executives at today's biggest brick-and-mortar retailers will sing the internet's praises despite the fact that they may have been cursing it a decade ago.

Patricio Robles

Published 17 December, 2010 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (2)


Andrew Freeman

Funny you should reprint this article today.  A friend of mine was at a store in Boston, MA yesterday where he was using his iPhone to scan for pricing when he was approached and asked to stop by a salesperson.  The salesperson explained it was a new policy not to allow consumers to scan for better pricing.  My friend asked to speak with the manager, and while he was never shown this policy, he was told it was "recently implemented".  Looks like brick and mortar still doesn't know how to deal with anything other than old school retail!

over 7 years ago


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about 2 years ago

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