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.
The problem I see with the roaming ipad-cash-registers is that if you are in the middle of the store and you purchase a product, you are not yet on your way out of the store. What's to prevent someone from re-using a receipt on a piece of merchandise that they just grab off the shelf? Do they have a receipt? Sure, but it was from an hour ago...who's to say that was a legitimate sale or someone stealing the item on an older receipt?
You have the same issue with the traditional POS system on the way out the door. You can re-use a receipt just as easily, depositing the first item in your car, and then return to take a second item against the same receipt. I know that Best Buy checks your items as you exit the store, and they initital the receipt, noting that you have already taken your product, so in the new or old method, I don't think you can fool them a second time.
@Mitch - I think if they sell items that are not easily acquired online, they may not have to have an online presence, but if their wares can be found online, then I think they will have to have one, as well. For brick-and-mortar establishments, they key, I believe, is to marry their online and physical presence. For many retailers, they've kept those two operations separate, which creates more problems then it solves.
I think it would actually be harder to pull any fast-ones with roving electronic systems which might know exactly how many items are in the store, when they were purchased, and how old a receipt is. Now every employee would have access to the system, not just the ones at the registers.
Still, I think brick and motar has to do whatever it must to survive. I think the move is smart, and I think it'd be even better if the technology becomes affordable for small businesses to take advantage of as well.
RyckMarciniak - And then there's Nordstroms, which bombs the customer with great customer service. Sure, you may be able to buy that shirt online but why would you want to when you can get it at Nordstrom and the salesman might suggest a tie to go with it too?
Like Scott Kinoshita said, it might be harder to pull a fast one with mobile checkout. For one thing, now every employee who would have been clustered at a checkout area is now roaming the store, keeping their eyes open for customers who need assistance -- and potential shoplifters.
Ryck - I know that Best Buy checks your items as you exit the store, and they initital the receipt, noting that you have already taken your product...
Which is possible a contributing factor -- albeit a small one -- to the demise of brick-and-mortar retailer. Honest customers don't like to be accused of being crooks. They don't even like a suggestion they might be crooks. (When I pass through a door like that, I often cheerily say, "No, thank you!" and just walk by.)
Mitch I see this as a plus point since it will definitely increase the productivity. True it may be a drawback if you look at it from the customers perspective but as an employee it will be a good turnover.
I think one of the challenges for retailers that adopt this mobile POS strategy will be to have enough staff to handle the customer volume. If you think about shifting the existing wait lines at a POS station to the retail floor, the retailer may need to add staff, which adds to their operational expenses for the brick-and-mortar establishment.
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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.
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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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