Fri December 9, 2011
A Look At Mobile Technology Used In Retail
LYNN NEARY, HOST:
Here's another challenge for traditional retailers. Companies like Amazon and eBay now offer apps for your Smartphone that take a lot of the legwork out of comparison-shopping. While you're in a store, just take a picture of an item or scan the barcode on the box. You'll find out where else to get it and you might even get an extra discount for buying it on the spot.
Stephen Hoch teaches marketing at the Wharton School of Business and consults for some retailers.
PROFESSOR STEPHEN HOCH: The app has collected price information from a variety of different retailers and e-tailers. And just like a price comparison search site that you would use on your computer, the mobile app goes and finds different places to buy the product and posts the prices. And so, you can choose right at that point to order directly or order at a later point in time.
NEARY: So, online retailers like Amazon, for instance, are really in kind of instant competition with brick-and-mortar stores now. Because even when the customer is inside the store itself, they can be shopping around elsewhere. I mean, that can't be good for traditional retailers.
HOCH: Well, first of all, all of these different apps that are available - and the fact that you have a cell phone when you're in the store - I see it absolutely almost purely positive for the consumer. I think it makes the consumer smarter.
For the companies, I think it's kind of a mixed blessing. Some retailers actually specifically go after smart consumers. So if consumers are smarter that's better for those retailers, especially if they offer better deals, better product, et cetera. But the downside is that consumers can find out that a store down the street, or an e-tailer, carries the same product that is at a cheaper price and then you lose the sale.
NEARY: You think it's possible that brick-and-mortar stores like Best Buy, for instance, might ban shoppers if they see them photographing and trying to scan products and make these kinds of comparisons in their store?
HOCH: I don't think so. I think they might like to. But there's good and bad aspects of this for a retailer like Best Buy or anybody else who's selling products that consumers might want more information about. So, I think you kind of have to accept the good with the bad.
Now, they may try some tactics to make it more difficult to compare. Or one thing they could do is to simply match whatever they offer is. And, in fact, if you come in with an advertised price that's better than their price, most retailers - I think including Best Buy - for years, are willing to match the price.
NEARY: Do you have any sense of how many people who have smartphones shop this way now?
HOCH: Probably all of my students do.
(SOUNDBITE OF LAUGHTER)
HOCH: That's for sure. They shop in a very different way than their parents, and are savvy and they have no problem in going to stores. But they see shopping as kind of a seamless integration between the bricks and mortar and the online world.
NEARY: So, you really do think this is kind of the shopping wave of the future?
HOCH: You know, I think so. Because, first of all, for the retailer, this offers lots of avenues for creating a better in-store experience. These apps can provide additional product information, such as what the product does, what its specifications are, things of that nature. And it could even provide complementary products that would go along with this product - for instance, an accessory or something of that nature.
So let's imagine that every product in the store had a sign on it that listed all the specifications for the product. The store would become very cluttered and probably un-shoppable because all it would be filled with would be signs. Well, now you have another source of information that doesn't have to come from a sales associate; that the retailer can leverage to improve the shopping experience.
NEARY: Stephen Hoch is a professor of marketing at the Wharton School at the University of Pennsylvania.
Thanks for being with us.
HOCH: Thank you, Lynn. Transcript provided by NPR, Copyright National Public Radio.