Every Christmas shopping season many big and small retailers get more nervous on how the internet and mobile technology is changing the way consumers shop. The internet is not new a phenomena. It has been growing at a steady pace since Amazon and others took root during the dotcom days. However, I think this holiday season is different. It has really hit home with many in the retail industry that not only are shoppers looking to do more of their shopping online, but they are changing their shopping habits altogether.
It comes as no surprise that some things are easy to buy online such as books, video games and electronics, to name a few. Sales of such products have been growing steadily online (and shrinking at at brick and mortar retailers). There are plenty of examples of physically retailers shutting down and either moving everything online or just going out of business. Again this is not a big surprise as this has been growing season by season. However, what is really getting the traditional retailers even more concerned now is a new dynamic that is coming together to create a perfect storm that sending more people online than before. Mobile applications are the new driver for a new way to shop that people are starting to utilize more and more.
With smartphones now common place, people are getting accustomed to using their mobile devices to comparison shop while they are in their local retail stores. The problem is, more an more people are using local stores as showrooms and then making their purchases online. The combination of the internet, smartphones, barcode scanners, online product lookup/comparison, social networking/sharing is making it hard for local merchants and stores to close transactions in their physical stores. The consumer just has too many tools and too much information at their finger tips.
Some retailers like Target are resorting to some radical methods to hold the consumer captive once they enter their stores. As reported by the Wall Street Journal, Target is an example how things can get a little extreme. Target more or less wants to isolate the consumer and wall them off from the internet to limit what they can do with their mobile apps once they enter Target. One can understand the situation that Target and other local merchants are in when it comes to competing with the online guys, but I argue this is the wrong way to go about it and will end badly for those that do not embrace the new social mobile shopping evolution.
Sure, Target can force their vendors to create custom brands with unique UPC codes so that products become hard to search and compare online (and with other local stores). But this will not work in the long run. All that Target is doing is isolating themselves much the same way AOL did by not fully embracing the internet and mobile/social shopping. The walled garden will not work. It will come down sooner or later. At OfferDrop we understand this first hand. While we use UPC codes for product lookup in our mobile apps, for example, we do not rely on this and plan to make searching and comparing much more unstructured in the future as we move to more powerful search and comparison tools that do not depend on UPC barcodes in the future.
Anyway, I got off the subject. Local merchants need to embrace the mobile and social shopping dynamic not try to contain it when shoppers enter their stores. Instead what Target and all other local merchants should do is go social and connect with their customers in ways that the online guys can't. Do not just push exclusive coupons and deals to consumers, interact with them at a personal level when they enter your stores. For example, if a shopper scans a product in your store and posts about it their friends or social network, the local merchant should be part of this social network and follow up with the customer and offer them a coupon or see if shopper asked a question and give them an answer about the product right on the spot. Or followup with the customer after they leave, but the main point is that the local merchant should be part of the shoppers local social network. Embrace social and mobile applications do not hide behind them or just offer your own walled garden app. And this goes beyond just offering coupons and deals. Make it personal with the shopper. This can be especially powerful for smaller merchants who can get more intimate with their shoppers and their local shopping network.
This is our battle cry at OfferDrop. We want to empower the local merchant (big and small) and allow them to connect in meaningful ways with their local customers. We believe local shopping has as much to gain from mobile shopping tools and social networks as do online virtual stores. Get on OfferDrop and start making shopping social.
http://www.offerdrop.com
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