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App Attack! The Retail Revolution Continues

Last year just before Christmas, Amazon the world’s biggest on-line retailer, sent a winter’s chill down the spines of retailers across the world when it called on its millions of customers to take to the shops with their smartphones and use the Amazon barcode scanner app to scan the prices on any three toys, electronics, sports equipment or music.

The Christmas present offered by Amazon was five per cent of each Amazon product in return for the bar scan. Their mission – to produce a competitor annihilating database of prices in the battle for the billions spent on retail goods every year.

Apps such as Amazon’s Price Check have been dubbed ”killer” mobile apps because they deliver real-time pricing information from other competitors whether they are a few doors away or on-line. For retailers, these phone and tablet apps mean they have to respond and offer similar prices to Amazon and other on-line retailers.

This can turn into a killer when you are supporting an actual bricks and mortar store and paying VAT or other taxes which many of these on-line retailers are exempt from,’ says Dave Jabbie. ‘With smartphone apps continuing in popularity, retailers have to respond.’

Price is of course the biggest fight-factor. ‘It will become intense as mobile apps continue their take-up,’ Jabbie predicts. Stores are launching mobile apps where customers can scan an item in a competitor’s store and get the comparable price at their own. ‘What we are looking at is something that can and will forever change the face of retailing.’

The problem is, as Jabbie explains, this creates an unstable environment in a market already under pressure from the global economic downturn. So, what can retailers, especially small to medium-sized businesses, do to respond?

‘First you have to take the fear out of these apps,’ Jabbie says. ‘Look at them as just one more way you can communicate with your customers. People’s phones are always with them. This presents us with a significant opportunity.’

‘If we look at how some retailers are responding, their mobile apps strategy isn’t about competing on price. If you are going to slash prices there is always someone prepared to go lower. There are emerging trends from the US where retail mobile apps already have a higher market penetration where retailers have declined to compete on price and instead use these apps to better their relationships with their customers. These are specialist retailers who understand their market and above all, what they have to offer. The result is they can make better use of their inventory because it can be varied across their channels – both on-store and on-line. These are where the opportunities lie.’

‘Retailers need to see these apps as a way of merging commerce with your social media. Contrary to popular opinion and many people’s fears, they open up the door to an old-fashioned personal relationship with your customers. The retailers who realise this will be the ones who emerge ahead of their competitors ten years down the app track.’

So – don’t fear the app. Embrace it. For more about the Brownstone Approach – call us.

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