The Branded Pantry

Situation: A good deal of hoopla, and more than a bit of angst about the significant and growing roll of mobile shopping comparison applications in traditional shopping trips by customers has been on tip of tongue and pen since Black Friday.   

Consumers seem quite willing to use their smartphones to:

Check availability of comparable products

Switch stores, even if the consumer is in one store and finds a better deal for the desired item elsewhere.

Buy the product online while doing the comparison if the item is available at a better deal in an online environment.

It would seem according to Retail Insights that 45% of consumers with smartphones have used them to perform due diligence.    

The CEO of Walmart claims that this is the era of pricing transparency.    Some manufacturers and retailers look at this as an opportunity, others with more than a bit of trepidation.   The retailers looking toward opportunity feel that if they can get the consumer into their store for a “hotter” special, based on a price compare they might be able to move that same consumer into more profitable additional purchases.   It is clear the trick to success in getting the hotter special is not going to be easy to master.  Those with misgivings correctly view this movement as accelerating the demise of retailers who do not have competitive pricing.  Others hope to hang on by either controlling the new technology (both using it to attract shoppers from other stores and to better the offers of other retailers that might sway their consumers) or controlling the environment in the store so that “we will block mobile phone reception in our stores.”    Yeah sure, good luck with that.    Still others hope that their “superior customer service” will win the day.  Not so much, as a study by Accenture indicated that most experienced smartphone shoppers would much prefer staring into their phones rather than chatting with store personnel.  

Vision:  Mobile adds yet another dimension to the multi-store, multi channel choice game that is developing for consumers.  Electronic coupons, online ordering for a variety of delivery options (online, via mail, store pickup), shopping comparison tools and the like.  All of these developments seem aimed directly at the heart of shopper loyalty to specific retailers, particularly for oft-purchased items.  These applications fly in the face of what retailers had hoped to achieve.  They had hoped to convince shoppers to go to one place to buy everything.

In reality, at least for oft purchased, items consumers want the same thing.   In our view: Customer needs drivers fall into a hierarchy that is definable with a finite number of common variables, but with infinite time and intensity variation.  Some of these are:

1.    Convenience -What I want, when I want/need it.  

2.    At a price I am willing to pay,

3.    Don’t make me work hard to get it. 

4.    Occasionally surprise and delight me with relevance. 

5.    Anticipate my wants and needs

6.    And . . .  don’t do anything that will make me go or look elsewhere. 

We believe, structured appropriately these new technologies can be bundled to help the shopper achieve a new level of loyalty to the retail entity which creates a loyal devotion to meeting these needs for each consumer.    We call the vision around this development Shopper 5.0.  Done well, it could produce more retailer loyalty than anything ever built .

Hurdles: The applications are not yet there.  Nor will all of the potential power of these applications come together in a cohesive model easily.  Finally, the product data necessary to support the necessary applications and comparisons does not exist today, particularly for FMCG products.  Some retailers rely on product differences in order to avoid being directly compared with other retailers, particularly in the electronics and durables arena.  This product information area needs a rework in order to support these new applications. Lots to come in this arena.

Much more on this to come.