As the holiday shopping season kicks off with record Black Friday and Cyber Monday sales, it's a good time to examine how retailers are equipped to handle the onslaught of shopping search activity. The short answer: Most aren't.
This is important as we continue to move into the post-PC era, where high-intent mobile shoppers aren't just purchasing items online but are armed with the computing power to bring pricing transparency into the store with them.
Customers are getting poached from under retailers' noses by Amazon and other showrooming apps. This accelerates as we enter the biggest shopping season in the biggest year of retail evolution since birth of e-commerce.
Meanwhile, it's clear that users are embracing mobile shopping search and IAB according to Harris Interactive. ComScore Senior Director Matt Archer says mobile's share of retail e-commerce is on pace to reach double digits for the first time this quarter.
To be clear, the comScore figure is more in reference to things purchased and ordered over the phone (a.k.a., mobile commerce). The larger opportunity that we're talking about is using mobile as a search tool within the much larger pie that is offline retail.
But Archer covers that too, reporting that 37 percent of shoppers engage in showrooming in Q3. The driver in most cases was not surprisingly price shopping, followed by the need to see items in person first (origin of the term "showrooming").
Manufacturer's Suggested Retail Strategy
So with increasing ranks of shoppers checking competitive prices via mobile, it should be a wake-up call for retailers, right? Not so much: Keynote systems reports under-optimized mobile sites and weak apps from Macy's, Barnes & Noble, and others.
Across this retailer adoption scale lies fast adopters and inertia-bound holdouts, marking the dividing lines of who could survive the next decade. Best Buy for example gets points for working with shopkick (though it faces other challenges).
Target is also on the adoptive end of the scale, likewise partnering with Shopkick to engage in-store shoppers with deal discovery. The alternative: lose users' attention to the seductive glow of Amazon's competitive price shopping app.
Here a natural advantage goes to Shopkick and its retail partners. Its passive discovery experience is more mainstream-friendly than manual product searches or barcode scans via Amazon or other showrooming apps.
Shopkick, meanwhile, is innovating in other ways. It's currently streamlining the in-store sonar beacons that talk to your phone. It's replacing hardware-based installs with software that integrates with stores' existing PA systems (pretty slick).
Other cool stuff is also in the works. ByteLight develops in-store LED lighting systems. Their flicker pattern sends signals to your phone's light meter, such as promotions and in-store mapping and search (even slicker).
Meanwhile, there are well known products whose value haven't been realized. Take Apple Passbook: It's received media attention (albeit overshadowed by mapgate), but it hasn't really captured the excitement – or even understanding – for what it will do.
This will change, as there currently aren't legions of apps to demonstrate its capability and capture interest. It will take time for Passbook's open development to bring in the critical mass of customized innovation for all kinds of shopping and search apps.
So far, its value is being shown in stored value cards (Starbucks), ticketing (United) and loyalty (Walgreens). Valpak has integrated Passbook to search for a wide array of coupons to be saved and then alert users when they're nearby the chance to use one.
For Passbook and all other local shopping apps like Shopkick, there's a sequence of product innovation, consumer usage, and retailer adoption (usually in that order). We're at various stages of this continuum in lots of areas like deals and mobile payments.
There's progress on all these fronts, but still also a way to go – and the target keeps moving. It's clear that it won't materialize this holiday shopping season, but we can stay wishful for next year. The retail battleground could look a lot different by then.