Should Retailers Fear Customers With Smartphones?

Only if they’re unwilling to admit the rules of shopping are changing.

If you have a smartphone, price transparency is effortless. It literally takes a few taps to check a store’s price on an item versus other prices, especially online. And if you’re a retailer, gone is the assumption that because you’ve managed to get a customer in the store, they’re naturally going to buy from you.

Yesterday’s WSJ had a bit on this:

Tri Tang, a 25-year-old marketer, walked into a Best Buy Co. store in Sunnyvale, Calif., this past weekend and spotted the perfect gift for his girlfriend.

Last year, he might have just dropped the $184.85 Garmin global positioning system into his cart. This time, he took out his Android phone and typed the model number into an app that instantly compared the Best Buy price to those of other retailers. He found that he could get the same item on Amazon.com Inc.’s website for only $106.75, no shipping, no tax.

Mr. Tang bought the Garmin from Amazon right on the spot.

I’ve done this more times than I care to remember, most recently with a Logitech Driving Force GT steering wheel for my my son’s Gran Tursimo 5 Christmas gift. I was in a local store, about to buy one, when my iPhone said I can get it from TigerDirect for about $50 less, no tax, free shipping. I walked out of the retailer. By the time I got to my car, I had the online order confirmation sitting in my inbox.

It’s as if retail stores are window-shops and the actual transaction isn’t anywhere near a foregone conclusion. Just spend a few minutes with TheFind (as mentioned in the WSJ bit) or RedLaser or Amazon Price Check and you very quickly realize that there are sometimes-huge online savings to be had vs. offline.

In light of what these mobile platforms can do with a plethora of now very popular apps, the difference between online and offline is indeed blurred. And customers are noticing.

Is it game over for retailers? Not if you’re smart enough to acknowledge the landscape and tweak your business to embrace the change rather than fight it. Again from the WSJ:

“That is an opportunity to steal a sale right when someone is in the throes of making a decision. That is what makes mobile so powerful,” says Best Buy Chief Marketing Officer Barry Judge, who believes retailers must “dive in headlong” into the new environment.

The hard sell doesn’t stop there. If a customer inside a Best Buy compares prices through TheFind and discovers a better deal elsewhere, the retailer also makes one last pitch for the sale with ads showing them deals on other products at the store, such as a similar Blu-ray player that comes with a free movie disc.

“Instead of letting that person walk out, you are telling the customer, ‘Look, we know you’re already here, let’s make a deal,'” says TheFind’s Chief Executive, Siva Kumar. “It is not a consumer-only game. Retailers can use it to their advantage.”

Every time something disruptive comes along, it puts people at a crossroads. Path one is go fight the trend, to defend the institution, to do whatever you can to keep the disruptor away from you. Path two is to research the disruptor, understand what it is and how it’s being used, and absorb it into your life.

Path one is about short-term health and long-term difficulty.

Path two is about short-term difficulty and long-term health.

The idea that you can check prices on your phone via an installable application is something only a small percentage of people do now. But like every other tech curve, what happens when this is bubbled down to the layman level, the LCD?

Again: path one, or path two. Your choice.

Kudos to the retailers who are already willingly engaging price transparency and using their physical location combined with mobile technology as an advantage.

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