A discussion draft of the Online Sales Tax Simplification Act of 2016 is expected to be introduced in Congress soon.
(Page 2 of 2)
"IPads put an easy-to-use information device in the hands of our store associates and, in turn, the hands of our customers," Barrett says.
Among the smaller retailers adapting to the proliferation of smartphones is Honeys & Heroes, a children's clothing store in San Francisco and Palo Alto, Calif. "Retailing is changing dramatically right now," says owner Alanna Klein. "Consumers are savvier. Consumers come in and know exactly what they want."
Klein responded by signing up for Fetch, a part of Milo, a local search app from eBay Inc., for smaller businesses. Klein's accounting software provides a data feed to Fetch of products the retailer has in stock.
Then, when a consumer searches for a pair of Quicksilver board shorts on her smartphone using Milo, Honeys & Heroes' inventory appears alongside that of much larger retailers. "A customer who doesn't even know about you may look and say, 'This store has the swim trunks I want,'" Klein says. "This gives us a level playing field with big retail players."
Save the sale
Large retailers also want to show up when consumers use their smartphones to search for something to buy.
Last fall, Toys 'R' Us Inc. put its inventory into Milo and RedLaser 3.0, another eBay shopping app, but has gone further by enabling consumers to purchase an item via their smartphones, pay for it with PayPal, and pick it up in the store. Toys 'R' Us declined to provide sales numbers for the service, but says it is "encouraged by the engagement."
Toys 'R' Us also uses Shopkick, a mobile rewards app that enables consumers to check in at stores and scan product bar codes to earn rewards. "Mobile commerce is our fastest-growing channel of consumer engagement," a Toys 'R' Us spokeswoman says.
Another tactic retailers have adopted to appeal to consumers with smartphones is placing Quick Response codes in aisles next to products. A QR code is a form of two-dimensional bar code; it appears typically as a black-and-white square with a pattern of tiny black-and-white squares within, and scanning it with a phone's camera can connect the consumer to a web or mobile site.
When consumers in a Best Buy Co. Inc. store scan a QR code next to a product display, it opens a product page on Best Buy's mobile-commerce site in the smartphone's browser. "They're pretty comfortable with the technology," says Tait Jorgensen, operations manager at a Best Buy store in Chicago. Indeed, nearly 30% of smartphone and tablet owners say they have scanned QR codes, according to the Prosper Mobile Insights study.
Retailers tell Baird of Retail Systems Research that displaying QR codes in store aisles does not appear to cannibalize their online or stores sales. "It's functioning as more of a 'save-the-sale' in the store," she says.
The personal touch
Retail chains are not relying solely on technology to prevent consumers who use smartphones in stores from leaving and purchasing elsewhere. Jorgensen, the Best Buy store manager, says he trains employees to recognize when consumers in the store are shopping or researching on their mobile phones while in the store. Telltale signs include someone using a phone to scan a bar code or staring at the screen and scrolling up and down, as though reading product reviews.
Jorgensen instructs his employees to engage those customers. "We want to break the barrier down right away," he says. That begins with a simple question: "What can we do to help you out today?" Many times, that works. "They do a good job of converting those customers who are using our store as a showroom for online retailers," Jorgensen says.
Many smartphone-wielding consumers are just shopping, and are not necessarily ready to buy that day, he says, "but after a couple of questions they warm up pretty quickly."
Whether friendly engagement or iPad-wielding associates can succeed in preventing stores from losing sales to web retailers remains an open question. But it's clear that retail chains have little choice but to try every tactic they can think of to convince smartphone-carrying shoppers to make a purchase while in the store. As Baird says of shoppers using smartphones in store aisles, "It's not going to go away."