As we’ve examined, customers are getting poached right under retailers’ noses by Amazon and the rest of the showrooming brigade. So what are retailers doing to combat these challenges as we enter the biggest shopping season in the biggest year of local retail transformation since the invention of the department store? The results so far are mixed.
Though users are fully embracing mobile shopping, according to Harris Interactive and IAB, many retailers still aren’t there yet. Keynote systems last week reported under-optimized mobile sites and lackluster app functionality from Macy’s, Barnes & Noble and others.
On the retailer adoption scale, there’s divergence between fast adopters and inertia-bound holdouts. This will represent the dividing line of who will survive the next decade.
Best Buy, for instance, gets points for working with Shopkick (though it faces other challenges). Target has also partnered with Shopkick to let users discover deals in store, rather than be lured into the seductive glow of Amazon’s price shopping app. Shopkick’s passive discovery experience is more mainstream-friendly than manual product searches or bar code scans.
Shopkick itself has meanwhile lowered retail adoption barriers by streamlining its system of in-store sonar beacons that talk to your phone. It’s replaced the hardware-based installs with a software solution that piggybacks on stores’ existing PA systems. Genius.
Even cooler stuff is in the works. Last month I talked to Boston-based ByteLight which develops in-store LED lighting systems whose flicker pattern sends all kinds of signals to your phone’s light meter. These can include promotions and in-store mapping and search.
There are meanwhile products already out of the gate whose value haven’t been realized. Apple Passbook is a prime example. Though it got a nod from the tech media and analyst corps, it has failed to capture wide-scale excitement — or even understanding of what it does. This is particularly true because we are at early stages, before legions of apps have demonstrated its capability. But Passbook’s open development, like the app environment more broadly, will invite third-party innovation for customized integration within all kinds of local retail apps. We’re already seeing this at major companies, including Starbucks (stored value cards), United (ticketing) and Walgreens (loyalty).
Valpak breaks free of these single point solutions with an aggregated array of coupons to be searched, saved and set for location-based push alerts in Passbook. In fact, after its Passbook integration Valpak’s iTunes app ranking shot up overnight to crack the top 100. It also jumped from No. 177 to No. 6 in the Lifestyle category. As app store optimization (ASO) goes, this will have a snowball effect on continued downloads. Through this, Valpak’s utility — already addressing a local deals-hungry marketplace — reaches many more users by adding this one update. We’ll start to see this happen on a wider scale as iOS developers continue to latch on to Passbook’s versatile functionality.
For retailers and SMBs, this functionality enables economies of scale and the ability to reach many more users than the fragmented app marketplace offers on its own. It also offers a consistent UI and standardized functionality, to which iOS users will be quickly acclimated. This will all be a function of Passbook’s on-deck positioning in iOS, which brings user friendliness and standardization to organizing coupons, gift cards, and loyalty cards. As such, it will help these products get over a longstanding mobile adoption hump.
For Passbook and all other local shopping plays, there’s a process of product innovation, consumer usage, and retailer adoption (in that order). We’re at various stages of this continuum for local deals, mobile payments, product data, and shopping apps like Shopkick.
There’s exciting progress on all these fronts, but it’s clear that we’re still far from mobile local shopping’s true vision. It won’t all come together comprehensively in the next couple months of holiday shopping, but we’re inching closer. Maybe next year.
Mike Boland is senior analyst at BIA/Kelsey, where he heads up the firm’s mobile local coverage. Previously, he was a tech journalist for Forbes, Red Herring, Business 2.0, and others.