How Brick-and-Mortar Retailers Can Compete and Win in the Mobile Arena

By Adi Prabhat Jain, Associate Sales Manager, Infosys Technologies Limited

It seems that there is no end to the woes of brick-and-mortar retailers. In 2009, while total e-commerce sales were estimated to have registered an increase of 2%, the total retail sales decreased by 7%, according to the U.S Department of CommerceQuarterly Retail E-Commerce Sales. While online retailers have been dealing blows to brick-and-mortar retailers (for some time now) and driving prices down towards marginal costs, mobile phones threaten to slowly spell their death unless retailers do something radically different to connect with increasingly demanding customers.

Advertising and promotional campaigns on mobile phones are fairly common and shopping on the mobile phone is fast picking up, albeit concerns over security still persist. However, a host of mobile applications, with diverse value propositions, are fast gaining traction. These applications are often freely downloadable and allow customers to search products, compare prices and promotions, read reviews and check in-store availability. What really sets them apart from their counterparts on the Internet is the fact that all this can be done anywhere, especially, at the point of purchase decision.

There is a bunch of freely available mobile phone applications that enable users to search for products and receive text messages with informational tidbits that range from names of local stores carrying the product, their in-store stock situation and information about promotions on those products. Even more advanced applications are available for camera and smart phones.


  • Amazon’s application for mobile phones has a function, “Amazon Remembers,” that matches pictures of objects taken on mobile phones to products available in their store, makes product recommendations, and also performs price comparisons with a few web retailers.
  • Scanbuy, a New York-based company, provides an application that enables shoppers to compare the prices of products in brick-and-mortar stores with those in online stores. Users can simply click a picture of the product barcode using their mobile phone camera and compare product prices with other Web retailers or read product reviews.
  • Google has recently introduced its “Product Search” mobile application for smart phones that allows users to search the inventory of participating stores for products of their choice. The “My Location” feature of the application allows users to find out how far they are from the store carrying the product.

Information availability ensures the best deal

As technology progresses shoppers are obtaining access to newer channels and an unprecedented amount of information. They are now empowered to make smarter decisions and challenge retailers to provide them the products they want at the prices they desire.

While mobile applications are still in their nascent stages, data on local stores is still undependable and security concerns abound, it is only a matter of time before the applications will stabilize and local store data will become more organized and security concerns will be put to rest. Whenever this happens, the balance of power will further shift in the shopper’s favor.

Retailers cannot prevent shoppers from carrying mobile phones loaded with these applications into their stores and conducting a quick, on-the-spot “due-diligence” before making a purchase decision. Neither can they match the lowest prices or run the same promotions available at other local or online stores on all products.

What should brick-and-mortar retailers do?

To effectively compete in the growing mobile arena, brick-and-mortar retailers must try to better engage their customers, although this may require a paradigm shift.

Traditionally, retailers have collected massive amounts of customer data to perform sophisticated affinity analysis to understand “what-goes-with-what” and designed promotional programs to drive revenues. However, in the context fast unfolding, merely understanding average behaviors is not enough. Retailers need to observe and understand the behavior of individual customers and act on it, in real-time.

While on one hand mobile phones present a threat to retailers, on the other they present a tremendous opportunity. Thanks to the mobile phone, through carefully designed opt-in marketing programs retailers can track demonstrated in-store customer behavior and juxtapose it with static demographic and psychographic data to get a peek into the customer’s mind.

Astute retailers will make the right investments in building systems that provide customer focused insights, design personalized promotional “bundles of satisfaction” for individual customers in real-time and communicate them to customers on the same mobile phones that can potentially upset their businesses.

This can make univariate price comparisons difficult and enhance the shopping experience and thereby keeping customers loyal. Moreover, it will enable retailers to exploit an evolving channel for meaningful business opportunities and not just “advert spam” for which an average customer has a low tolerance in any case.

Adi Prabhat Jain is an Associate Engagement Manager in the Retail, CPG & Logistics unit at Infosys Technologies Limited. He has seven years of industry experience in IT Sales, Consulting and Project Management. He has an MBA in Strategic Marketing and Information Technology Management from the Indian School of Business, Hyderabad. Adi’s professional interests lie in mobile policy, m-commerce, m-governance, green technologies and sustainable business projects.

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