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8/7/2012
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Eric Zeman
Eric Zeman
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Retail's Future: Price Comparison Via Smartphone Apps

Almost half of shoppers use mobile apps when they cruise retail aisles. Often, they leave to find cheaper prices.

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Brick-and-mortar retail businesses are under assault from smartphones. New data from Yankee Group shows that a growing number of smartphone users are taking advantage of mobile shopping applications to see where they can get the best deal.

According to Yankee, 46% of shoppers are using mobile apps when they cruise retail aisles. This figure is up about 5% since 2010. Half of the 46%--or one-quarter of shoppers--buy a less expensive product elsewhere once they've compared prices and availability.

Mobile has become a "fundamental part of the shopping experience," says Yankee. More than half of consumers--54%--have downloaded at least one type of mobile shopping application, and about 24% of consumers believe mobile shopping apps are "essential."

Amazingly, consumers are more apt to trust online retailers over regular stores. Amazon, for example, is trusted by 56% of consumers over traditional brick-and-mortar locations when it comes to comparing prices.

[ Would you feel helpless without your smartphone? Smartphone Addiction Takes Hold Over Americans. ]

Consumers with higher incomes have been faster to adopt price-comparing apps and use them to buy from different stores or request that the brick-and-mortar location in which they are shopping match what they find on their phone. Of those making more than $200,000 in annual household income, 83% are likely to purchase the product online instead. That's damaging to retailers.

"Our survey is a wakeup call--this adds up to millions in potential lost revenue for brick-and-mortars," said Sheryl Kingstone, Yankee Group research director and author of the report.

Speaking personally, I use smartphone apps to compare retail prices all the time, especially on big-ticket items that cost more than a couple of hundred dollars. The likelihood of finding a significant discount for expensive items online can help save consumers like me cash--at the expense of the retailer.

"Retailers must embrace mobile beyond price comparison and target consumers who are not solely driven by price," said Kingstone. "Engaging mobile consumers with tools such as inventory availability, real-time personalized offers, personal shoppers, and self-checkout will make the difference between retail success and failure in the new mobile economy."

Allowing consumers to tap into inventory and other pertinent data could be a huge benefit to traditional retailers. The "immediacy factor" of being able to make purchases instantly, or the same day, can be a powerful motivational factor for brick-and-mortars that they should use to their advantage.

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PJS880
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PJS880,
User Rank: Apprentice
8/8/2012 | 3:54:04 PM
re: Retail's Future: Price Comparison Via Smartphone Apps
It just makes sense if you are shopping for the best deal in town. When price comparing inline you can compare many different retailers at once, rather than driving form store to store and then returning to the store with the cheapest price. It is no shock that people want to pay the lowest cost and with the technology on mobile devices it is no surprise that this how they are comparing. The only down side to buying online is you do not get that immediate gratification and or product, you must wait. This may not be an issue for some but others this creates a huge problem and these people are more likely to buy from physical retail because they need the product immediately. I will give an example my hard drive crashed and I needed one immediately, instead of shopping around on line I had to scour the city to find a store that had one on stock, and paid for the convenience of having that product at my fingertips because I needed it immediately or I would have bought online and saved. Any other examples where this would not benefit the customer to buy online?

Paul Sprague
InformationWeek Contributor
Building A Mobile Business Mindset
Building A Mobile Business Mindset
Among 688 respondents, 46% have deployed mobile apps, with an additional 24% planning to in the next year. Soon all apps will look like mobile apps and it's past time for those with no plans to get cracking.
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