Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
It's one thing to deploy mobile apps in stores, it's quite another to turn them into sales tools.
It's a hot trend: retail chains marketing to in-store shoppers via their smartphones, seeking to keep them from employing the mobile apps and sites of web-only retailers like Amazon.com Inc. that are hoping to lure those consumers online with low prices.
Last month, for example, rewards-based marketing app shopkick announced it is rolling out its location-based rewards shopping app in all of American Eagle Outfitters' more than 1,000 U.S. apparel stores. That was on the heels of shopkick's similar deal with Target Corp.'s nearly 1,800 stores nationwide.
These retailers represent just a few of the many trying to appeal to the 43% percent of smartphone owners who have used a mobile device in a store for a shopping purpose, according to a 2012 study by comScore Inc., Shop.org and The Partnering Group. By offering their own mobile tools, more retailers are hoping to keep store shoppers from what's known as showrooming—consumers using smartphones in stores to compare prices offered by competing retailers, often web retailers. 15% of smartphone owners have checked prices on a phone in a store and bought from a competing retailer, according to online coupon site RetailMeNot and Ipsos Research.
But how well do these apps work? Can consumers get cell phone signals in stores? Do store employees know how to address customer questions about these apps? And do web merchants and comparison shopping apps really provide better deals?
To answer these questions, Internet Retailer assigned me to visit Chicago-area stores with mobile programs to see how these apps work. I visited four stores operated by four major chain retailers: The Home Depot Inc., American Eagle Outfitters Inc., Best Buy Co. and Gap Inc.'s Old Navy.
Below is my journey.
My first stop is home improvement chain retailer The Home Depot. I pull out my smartphone and try to access the web via Wi-Fi. Success! A free, public, Home Depot Wi-Fi network offered via AT&T. I accept the terms and conditions and access the network, which handily brings me to Home Depot's m-commerce site. I download the Home Depot app, which offers clear instructions for scanning bar codes to access ratings and reviews. I get to scanning and try out the Ridgid Jobmax Impact Driver Head and quickly see it's received 12 reviews and a 4.5–star rating out of a possible five.
I look around the somewhat busy supercenter and see many store signs about HomeDepot.com but none about the chain's m-commerce site or app. I walk through several aisles but don't see any consumers using smartphones to shop. I approach an associate and ask him if he ever sees consumers using smartphones to access product information or perhaps to compare prices online. I also ask if he has had any training on helping store shoppers use the retailer's mobile app or site. He pulls out a decade-old flip phone and tells me I'm talking to the wrong man.
The second staffer I approach seems a bit more tech-savvy. He says he does see shoppers using their smartphones in stores, though only occasionally. He mentions a shopper who used his smartphone to access rating and reviews on garage doors a few days ago.
The third store employee I chat with says consumers don't need to use the Home Depot app because they can scan bar codes at one of the many store kiosks to get more information about products. He is right; they can. But it takes me, the associate and the help of another kind shopper to figure out exactly how to scan an item at the kiosk. How, I wonder, would you scan a garage door?
I move on to try out what chains like Home Depot dread: showrooming. Using Home Depot's handy Wi-Fi network, I quickly download eBay Inc.'s comparison shopping app RedLaser. I scan a RhinoGrip non-slip rug strip selling for $9.48 at the Home Depot. I find it for $8.99 online. Does Home Depot match prices consumers find online? The retailer did not respond to inquires.
I mosey over to the kitchen section next, where I eye some QR, or Quick Response, codes. Promotional signs encourage me to scan the code to learn more about Design Connect, Home Depot's online kitchen planning tool. I scan and it takes me to more information, including a Virtual Kitchen tool and a Countertop Estimator.
AMERICAN EAGLE OUTFITTERS
Next I head over to American Eagle Outfitters, the teen and young adult clothing and accessories chain that's gotten considerable press for its use of mobile marketing app shopkick.
Consumers who download a free shopkick app to their iPhone or Android device can earn what shopkick calls kicks—essentially rewards points—for walking into a store. They also receive other offers while in the store for doing things such as scanning bar codes on items.
American Eagle was one of the first retailers to test shopkick when the app launched in August 2010. After testing the technology in more than 200 stores, the chain recently announced it would roll it out to all its nearly 1,000 U.S. stores.
American Eagle says shopkick brings more traffic to stores and boosts sales. It also says shopkick users spend more and are more engaged more with its brand.
I am awarded 35 kicks for walking in the door of an American Eagle store. It takes 1,250 kicks to get a $5 American Eagle gift card. Consumers can also get song downloads and movie tickets with shopkick points. But I never would have known a lick about "kicks" if I had relied on American Eagle to tell me about them.