A recent study of showrooming activity is more bad news for retailers that subscribe to the conventional wisdom that mobile is a threat. But a couple of forward-thinking merchants -- Nordstrom and Best Buy -- are looking to use mobile to their advantage.
Some 43 percent of consumers showroom, according to a Harris Poll released this week. Best Buy and Walmart are the most popular showrooming destinations (24 percent and 22 percent). And Amazon is the most likely beneficiary of showrooming; more than half of showroomers said that's where they buy (57 percent), according to the poll.
Showroomers spend an average $211.80 per purchase.
But retailers aren't taking the competition lying down. In the latest effort to make brick-and-mortar shopping more attractive, retailers are tossing cash registers onto the junk heap, replacing them with mobile devices, according to a report on NPR.
The benefits: Mobile associates are more convenient than asking consumers to stand in cash register lines. And no cash register lines means less time for customers to change their minds about buying products and walk out. Also, mobile technology is often less expensive than traditional PoS, and removing cash registers frees up real estate in the store.
Nordstrom is a leader in this trend. It's replacing cash registers with modified iPod touch devices containing barcode scanners and credit card readers. When a customer finds merchandise they're ready to buy, a sales associate simply swipes the bar code and credit card, the customer signs with a fingertip, and is good to walk out the door.
"We think the days of the big clunky cash register... anchoring down a department are really going away," Nordstrom spokesman Colin Johnson told NPR.
And mobile is key to turnaround plans for Best Buy, says Stephen Gillett, the company's new VP of digital, global, marketing, and strategy, told Wired.
"We have a range of opportunities," he says. "There are challenges, but I like the set of cards I have been given."
Best Buy is closing stores -- a process that is limited by long-term leases. And the company is looking to turn remaining stores into an advantage by striking at mobile commerce's Achilles' heel. "People want to try before they buy, and they can't do that on Amazon," writes Wired.
And Best Buy marries its brick-and-mortar presence with its own online business. By revenue, it's the 11th largest e-commerce site, at about $3 billion per year. "That's a fraction of Amazon's electronics business and just 6 percent of Best Buy's total revenue, but it's growing by 15 to 20 percent every quarter," Wired says.
Retailers like Best Buy and Nordstrom are showing the way to beat showrooming. Instead of running away from mobile competition, retailers need to embrace it.
Here's the problem. When Apple set up the retailer deal for BB to be the premiere non-Apple "on the street" retailer, they explicitly or implicitly tied their brand to Best Buy's.
The research indicates the iPhone makes up most of the BB's Apple sales. But then Apple distributes iPhone fairly indiscriminately. They didn't need a reseller arrangement like they have for BB to sell iPhones.
Originally staffed with Apple salespeople, Apple was the centerpiece of the BB's computer department (in the trial stores) and visually still is. But from the start, Apple complained about the profitability of the partnership so pretty quickly the Apple staff was gone. So too is the inventory - including third party accessories and products - and BB sales people knows little if anything about the product line.
Empty shelves and no product sales support helps neither BB nor Apple. Apple can still realize strong BB iPhone sales without compromising their brand.
Why hasn't Apple pulled out of Best Buy? Maybe they just haven't gotten around to it? Doesn't sound like Apple – even without Jobs – where patience is not necessarily seen as a virtue. They must be waiting it out for a strategic reason.
They may want to hook Maybe they have contractual obligations? Apple's holding all the cards - Best Buy has no leverage. Contracts are broken everyday.
Maybe they're actually seeing significant profit from their Best Buy presence? According to CIRP (Customer Intelligence Research Partners), BB had 13% of all iPhone sales as of March 2012. By October the numbered had dropped to 10% and is still declining.
Why hasn't Apple pulled out of Best Buy? Maybe they just haven't gotten around to it? Maye they have contractual obligations? Maybe they're actually seeing significant profit from their Best Buy presence?
Mitch (and any interested internet evolution readers) – just read a few good articles you might be interested in that relate to our posts back and forth on Best Buy. Here are the links.
This next one I threw in because although our posts didn't specifically address it, I've been wondering why Apple hasn't pulled out Best Buy yet. BB has given the boot to having a dedicated Apple salesperson in the store. Instead, its now using it's own pc-centric-based sales team who knows virtually nothing about the Apple products. BB has virtually no inventory of Apple anything, so why bother being there – it's certainly not for good PR it generates on Apple's behalf.
Physical retail has several essential qualities that can work in its favor and that online retail just can't replicate: The customer has the opportunity to see and touch the product. The store has the opportunity to make shopping a pleasant experience through environment and friendly sales associates. Informed sales associates can help the customer make a decision. And the customer has the opportunity for immediate gratification, walking out of the store with merchandise in hand.
Unfortunately much retail has been moving in the opposite direction, with understaffed and uninformed sales associates, unpleasant retail environments, and –– in the case of electronics stores –– everything chained down so you can't get a good sense of how things work.
Mitch you're right, that is baffling. I can easily see why a Finnish retailer would set up shop in Hong Kong but I've never known Helsinki to be a shopping mecca!
Anyway, I think there's quite a bit of value in brick and mortar retail. But, it will be an ever-increasing challenge for them to continue to be profitable.
Yeah, I've seen those rumors too. It would be a very interesting development if it actually happens.
I talked to another retailer today that's seeing benefit to its brick-and-mortar stores from doing online sales. The retailer is Hong Kong Department Store (which is, bafflingly, located in Finland).
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Almost everyone agrees that data analytics, digital marketing, apps, and APIs will greatly affect their enterprise's results in the next 12 months. But a report suggests that not all large corporations are moving quickly to adopt these enabling technologies -- and that could seriously harm their profitability, customer satisfaction, and chances for ongoing success.
Enterprises are embracing open-source to avoid vendor lock-in, get better-quality software, and gain access to larger libraries of applications. In return, they may be putting themselves at risk for higher, more complex support costs.
Whereas some businesses search externally when they need a CIO, Choice Hotels had to look only at its CTO for someone with the necessary expertise, industry knowledge, and technological know-how to continue leading the company's embrace of enabling technologies.
Local social media can be powerful marketing tools, but they can't just be add-ons. They need to be tightly integrated into the corporate culture, according to Whole Foods social marketers.
New York's Metropolitan Transit Authority is conducting a pilot test of digital kiosks to guide subway users to where they want to go more efficiently and at lower cost.
Companies need to take advantage of new technologies to simplify interfaces, improve capabilities, and enhance back-office processes. But they can't upgrade their Websites too often.
A survey by JD Powers found that customer interest in product features is lessening as phones evolve. Rather than features, price is driving purchases, and that change could have a dramatic impact on how IT departments secure these devices.
A recent release of the popular TweetDeck app for Twitter power-users gives new life to software that had previously taken a wrong turn. Here's a quick walk-through of the new TweetDeck, to show you why it should be at the top of your Twitter toolkit.
The whole Amazon.reader debate is a double-stupid. It's stupid to think that there's any e-book buyer who doesn't know Amazon's URL, and it was stupider to let ICANN launch the whole free-form TLD initiative to start with.
Edmunds separates customers into segments based on the info it collects on its site and from partners, and uses that to push out custom content, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
The automotive website uses propensity modeling to target ads and customer registration forms, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
New York's Metropolitan Transit Authority is conducting a pilot test of digital kiosks to guide subway users to where they want to go more efficiently and at lower cost.
The whole Amazon.reader debate is a double-stupid. It's stupid to think that there's any e-book buyer who doesn't know Amazon's URL, and it was stupider to let ICANN launch the whole free-form TLD initiative to start with.
While NFC's original goal was to enhance mobile commerce applications, it is finding its way into a number of other uses, which is creating both opportunity as well as challenges for IT departments.
Enterprises would like to move to cloud computing but are hesitant because they are concerned about providers’ ability to secure company data. Here are some tips that help to ensure that if breaches occur, the business is not left holding the bag.
Edmunds separates customers into segments based on the info it collects on its site and from partners, and uses that to push out custom content, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
The automotive website uses propensity modeling to target ads and customer registration forms, said Brian Baron, director of business analytics for Edmunds.com, at Predictive Analytics Innovation Summit.
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M2M: Rise of the Machines? Not Yet David Weldon In the 1970 science fiction thriller Colossus: The Forbin Project, two giant supercomputers from the United States and Soviet Union secretly join forces to take control of the collective nuclear might of the two countries. In the film, the two machines discover each other's existence, communicate back-and-forth, share their collective data, and cut their human creators out of the process. It is the ultimate example of machine-to-machine communications, or M2M. CLICK FOR MORE
M2M: Rise of the Machines? Not Yet David Weldon In the 1970 science fiction thriller Colossus: The Forbin Project, two giant supercomputers from the United States and Soviet Union secretly join forces to take control of the collective nuclear might of the two countries. In the film, the two machines discover each other's existence, communicate back-and-forth, share their collective data, and cut their human creators out of the process. It is the ultimate example of machine-to-machine communications, or M2M. CLICK FOR MORE
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