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The Defenseless Retailer

  
  
  

An article on The St. Louis Post-Dispatch’s website yesterday caught my attention. The headline was “Mobile Shoppers Shaking Up Retail Industry”, but what captured my interest was several of the assertions:

Mobile shopping is breaking down the walls of traditional brick-and-mortar stores by giving consumers the ability to easily find a cheaper price in a store down the street.

"That smart phone makes every retail box (or store) a glass box. So a consumer with a smart phone in an aisle can look out through the glass box and see every alternative available to them. It completely changes what happens at the shelf."

Stuff like that has to leave you wondering whether retailers are defenseless against these newly enabled consumers. It’s as if Consumers have been armed with the 21st century version of a Star Wars lightsaber, and Retailers only have rocks to throw. But no, retailers can respond:

Through various apps, retailers can tell when customers are near their stores and send them text messages about sales.

Oh, I get it. Retailers can respond by simply running more sales and offering more deals. That sounds like a sustainable business model.

Jonathan Mills, an avid mobile shopper who lives in Lake Saint Louis, would like to see more local retailers, especially grocery stores, launch apps that sync up to loyalty cards and coupons, as he has seen with chains like Safeway in other parts of the country. "I will reward a business if they give me something back," he said. If not, he will go wherever he can find the best price.

It sounds like shopping is on the verge of becoming a strictly rational, utilitarian activity. "Just the facts, ma’am."

Borders already is paying the price for failing to anticipate the impact of e-commerce.

Well, this is a pretty clear message to retailers: Do it, or die.

Please. Let’s think this through. Mobile is not a 21st century version of a Star Wars lightsaber, but of things a lot more mundane, a 20th century catalog, weekly circular insert, or weekly coupon book. Granted the technology is light years removed from run-of-press, but the medium is sending the same message: Here’s what’s on sale!

Mass-market retailers, the national retailers we all know and rarely love, have ridden the item-price promotion business model all the way down to the point where just about everything they sell has been commoditized. All they seem to have left to compete on is price.

But there’s a lot more to retailing, and perceived consumer value, than price. Value is ultimately the sum of the total customer experience, and if all that adds up to is price, well, then value equates with price. But the very best retailers, especially the very best independent retailers, have long understood that true value is the synergy of distinctive stores, unique and compelling high-quality assortments and presentations, passionate, informed and engaged store associates, state of the art product knowledge, outstanding customer service and exceptional execution. All of these things add up to a memorable customer experience.

Further, if retailers have allowed themselves to be defined strictly by their price points, they’re certainly appealing to rational, utilitarian, price-driven shoppers. But we all know that consumer motivations are far more diverse. Shopping is far more than the cold-hearted utilitarian acquisition of commodities. It’s a highly personal, emotional, and at times irrational activity that satisfies a broad range of human urges and aspirations. In that regard, retailing is about so much more than just price, it’s about the totality of the customer experience, just like the very best retailers have always understood.

So, retailers are not defenseless in this new mobile age, any more than they are helpless. Mobile technology is merely the latest in communication technology, and while it certainly must be accounted for, it’s hardly the make or break of a successful retail strategy. To understand that, all you have to do is ask yourself who has the more appealing and compelling stores: Barnes & Noble or Borders?

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