Retailers Dread Phone-Wielding Shoppers 725
Ponca City writes "The WSJ reports that until recently, retailers could reasonably assume that if they just lured shoppers into stores with enticing specials, the customers could be coaxed into buying more profitable stuff too. But now, marketers must contend with shoppers who can use their smartphones inside stores to check whether the specials are really so special. 'The retailer's advantage has been eroded,' says analyst Greg Girard, adding that roughly 45% of customers with smartphones had used them to perform due diligence on a store's prices. 'The four walls of the store have become porous.' Although store executives publicly welcome a price-transparent world, retail experts don't expect all chains to measure up to the harsh judgment of mobile price comparisons, and some will need to find new ways to survive. 'Only a couple of retailers can play the lowest-price game,' says Noam Paransky. 'This is going to accelerate the demise of retailers who do not have either competitive pricing or a standout store experience.'"
I did this (Score:5, Informative)
I used my phone to find the best prices when I was buying various white goods (fridge/freezer, washing machine, dishwasher) upon moving house, from a certain UK big-box electrical retailer.
Of course, the salesperson said "Oh no, we can't match internet prices" but it turns out that given a choice between a discounted sale and no sale, they can
Protip: You haven't got the best price until the salesperson has sheepishly had to ask the manager for authority twice.
Uniqueness (Score:4, Informative)
Most stores sell the same things that are found everywhere. The most profitable stores are often specialty, where there's little option to find a product elsewhere. In the long run we might see more manufacturer stores, bypassing the generic middlemen. E.g., Apple.
Books (Score:3, Informative)
If I walk into a store and something is $30 and it's $27 online. I'll probably just buy it right there.
But the other day I went to get a book from Borders and it was $30 in the store and $15 online. For that I'll just buy it when I get home.
At Barnes & Noble the in store price for something like Rosetta Stone is $600, but it's $450 online.
(I think everything is just 20 to 30% more expensive in the store.. regardless of size/weight/etc.
Re:Books (Score:4, Informative)
You are 100% spot on. Going through a marketing class you see folks have spent years studying these psychological facets and know how to take advantage of them. As humans, we are not 100% rational, present company included.
I tend to be more rational and less materialistic than most (more of my money goes to schooling and charity than I spend on everything else combined) yet I see myself fall into some of these traps.
So while I never intend to be in marketing, it is good to know how the enemy thinks :)
Re:So, the system works? (Score:4, Informative)
I did this recently with a TV at Best Buy. The sale price on the one I wanted was close enough to what I could find online.
I was able to actually see the TV, see how it looked, and spin the thing around to look at how the I/O ports are configured. I probably paid a little bit more than I would have online, but I firmly believe that the little extra cost is worth it to keep actual displays available at brick-and-mortar mortar locations.
Definitely did not by the extra high quality "HD Optimized" gold plated monster cables though. I might be a little altruistic, but I'm not a fool.
Re:So, the system works? (Score:4, Informative)
Even back home going to the bookstore means driving half way across town.. I consider the traffic part of the "crappy" experience of buying local along with the lack of selection, the line I have to stand in to by the book, and the musac I have to listen to.
It's a dead argument anyway, I've bought a Kindle and I'm hooked. So the local bookstore as well as the Amazon hard copy book section is pretty much dead to me. In the past two months I've "purchased" and read nearly 70 books. Prices ranging from zero all the way up to about $10 and had them delivered within minutes.
The only downside so far has been the destruction of my first Kindle in my backpack. (The corner of a table caught it square in the middle of the screen.) The second one was bought along with a cover and a armored storage box.
Re:I did this (Score:5, Informative)
I used my iPhone and the Red Laser app to scan all the toys my kids wanted. It shows all the prices for the stores around me, as well as online. I got approached by at least one sales person asking me what I was doing, and Toys R Us specifically was not happy. I got approached by a floor manager after the sales person approached me, and he asked to see the app. He looked none too happy. Why in the world would I not check if I had the ability??
Can you at least understand why he wasn't happy? If you want to use his floor space, play with his display models, and take advantage of all the other "free" services a bricks and mortar store provides, you should make your purchases there as well. Otherwise, do your research online and buy wherever is cheapest - that's fine too. Its just common decency.
Re:So, the system works? (Score:4, Informative)
True, but I'm referring more to large businesses. If a company makes $100 million in profit one year, and $150 million in profit the next year, but they were expected to make $175 million in profit, the market completely disregards the fact that they grew and their stock dives.
Why? Because they didn't hit some arbitrary expectation of growth? Because they were greedy, but not greedy enough? That's what I was referring to.
It can also go the other way (Score:5, Informative)
I'm in the market for a new TV, but haven't done any research. I see a TV in BestBuy that is on sale, compare the price to other stores, see it actually is a good price, then buy it. If I didn't have my smart phone, I would've gone home and did some research first, rather than buy it right there. That means I'm out of the store, and that most likely means a lost sale for them.
Similarly, I was at a (plant) nursery this last spring. I had the impulse to buy some plants for my house, but since I have a cat, I wanted to make sure I didn't buy a plant that was poisonous to cats. I whipped out my phone, went on the web, and researched the plants I liked, one-by-one, to find the ones that were cat safe. In the end I bought $100 worth of plants. If I didn't have my smart phone, then I wouldn't have bought anything.
Re:So, the system works? (Score:5, Informative)
Now, you'll hear them retort today about how reliability is much better than it used to be, and it has gotten better, but it's still nowhere near that of basically any other brand. They are intentionally using an antiquated engine design with 1950s tech and marketing like anything more advanced "ain't shit". I mean, they are still air cooled for goodness sake...
HD is the greatest case of drone marketing in world history. They have a militant user base willing to pay a premium price for a product that is inferior in every quantifiable way. Not only this, but they spend trillions on cheap chinese trinkets just because they carry the logo.
It's not like the premium clothing outlets where the product is better, but not in proportion to the price. It's even greater than that.
Re:So, the system works? (Score:5, Informative)
Anecdotes are great and all, but we're supposed to be nerds. Here are some studies:
http://www.newrules.org/retail/key-studies-walmart-and-bigbox-retail#4 [newrules.org]
Interesting findings from these studies show that most retail purchases at a Walmart (85%) have corresponding losses from local business, within two years there is significant loss of local businesses in general when a Walmart opens, Tax revenues generally do not go up, Retail employee wages and benefits drop as the result of a Walmart opening. Walmarts funnel nearly twice as much of the money running through them out of the local economy (out of the state) as local retail businesses do. One study found that for every job created by a particular Walmart studied, the local community lost 1.4 jobs as local businesses closed. Counties with one or more Walmart have higher poverty rates and poverty rates that increase faster than other counties in the same state and/or area, over a 10 year period.