The future may hold far fewer and radically redesigned stores, analysts say.
Mobile apps help retailers seal the deal, or to steal sales from rivals.
In the weeks preceding Thanksgiving and Christmas, things can get a little crazy in K&L; Wine Merchants stores. Customers fill the aisles looking for just the right bottle to go with Tom Turkey or the Christmas ham, and many have questions. But there are only so many employees to go around.
Enter the mobile phone.
The merchant created a mobile web site, m.KLWines.com, as a reference tool for customers who want more information than they can get from a little card on a shelf.
The strategy worked. The retailer reports traffic to the mobile site was "very strong" during the holidays, and it`s been growing since. And store employees routinely see shoppers accessing the site on their mobile phones.
"Our hardcore customer is typically looking at the e-commerce site all the time reading all about wine, and the convenience of mobile was just too much for us to ignore," says Brian Zucker, co-owner. "Whether it`s research or looking at real-time inventory, we wanted a user-friendly channel for them to do that."
K&L; is taking advantage of consumers` growing propensity to use their web-enabled, computer-like smartphones for research. Providing product information to consumers who are shopping in stores can be an effective way for a retailer to seal a deal, or to steal one, by letting a shopper know he can get a better deal on the item he`s considering.
Retailers that don`t give consumers access to information through mobile phones are sitting out a game that more shoppers are playing. During the recent holiday season, 25% of U.S. mobile phone users under 45 used a phone in a store while shopping, according to a survey of 1,016 users of consumer electronics comparison shopping engine Retrevo. Of those consumers, 13% used the phone for product research, 8% to check prices and 4% to make purchases. Only 9% of U.S. mobile phone users over 45 used a phone in store during holiday shopping.
A Motorola Inc. study of holiday shoppers across 11 countries found 51% used their mobile phones for in-store activities such as comparison shopping and getting peer feedback, product information and coupons. "This signals the increasing importance for retailers to adopt mobile technology strategies to remain competitive," Motorola says.
The good news for retailers is that creating a mobile tool for in-store use doesn`t cost an arm and a leg, especially when it ties into existing Internet systems.
K&L; Wine paid a set-up fee to mobile technology vendor Unbound Commerce to create its site, which K&L; hosts. The mobile site draws content from K&L;`s e-commerce systems from Endeca Technologies Inc. Zucker says the mobile site is self-sufficient, requiring no K&L; staff time. If there were a problem with the site, he would contact Unbound; if there were a problem with the feed from the e-commerce site, he would contact Endeca, which is under contract to provide web site support.
Multichannel beauty products retailer Sephora USA Inc. used a similar strategy to let store shoppers see the ratings and reviews on its retail web site. Reviews vendor Bazaarvoice Inc. feeds the ratings and reviews on Sephora`s e-commerce site to a mobile site the vendor built and maintains. The cost is bundled into the monthly fee to Bazaarvoice; the retailer says the cost for mobile, which it promotes via e-mail marketing and in-store signs, is small, about 5% of the overall cost of reviews. There is a minimal cost for marketing staffers to monitor reviews, but the mobile site does not add to that cost.
"Customers are more and more accustomed to getting lots of information on products and appreciate the perspectives of both the salesperson and the consumer," says Julie Bornstein, senior vice president of Sephora Direct. "So having the ability to look at up-to-the-minute reviews is a great resource for customers. We could never put all this information on the shelves; so the mobile site is a great way to give people the information they want. Especially in a category that can be overwhelming."
Bornstein says traffic to the mobile site is small but not insignificant, and it`s growing every month.
Research via texting
Consumer electronics comparison shopping engine Retrevo is taking a different approach to getting shoppers to use mobile phones in stores. Rather than build a mobile site, it created a text message service, RetrevoQ.
Retrevo promotes the service on its site, which it reports receives five million unique monthly visitors, and via e-mail to its one million registered users. A shopper in a store looking at cameras, for example, types into a text message "retrevoq Canon 500D" and sends the message to the RetrevoQ short code, 41411. In less than a minute, the shopper receives a reply text message that says: "Canon 500D: Strong buy if you want high-end. Fair price: $732. Range: $649-$699." The range indicates sales prices. It is followed by three URLs that link to more information on Retrevo.com.
Retrevo comes up with the analysis and pricing by studying 15 million data points every day, it says. It scours the web and the numerous data feeds it uses from retailers. It`s using the text service as a branding and loyalty tool that encourages people to also regularly use the web site, where it earns fees for sending customers to retailers` e-commerce sites.
Because the RetrevoQ text program is entirely automated and draws on data collected for the web site, the cost of the mobile program is nominal, says Manish Rathi, co-founder and vice president of marketing.
"In electronics, a shopper walks into a store with a product in mind and then based on the salespeople they are engaged with narrows it down to a couple," Rathi says. "But before they buy, many people want to know what others think, and the web is the place to go for consumer sentiment. Now this is something the shopper can access in-store."