Consumers Flex Their Mobile Muscle

Shoppers are turning to mobile apps for product information when making purchasing decisions, so retailers need to engage with app developers to make sure they've got the right information.

It’s hardly a secret that retailing is undergoing one of the biggest transformations in its history. Mobile POS, analytics and the cloud are fundamentally altering both online and in-store experiences. What’s not apparent to many retailers, says GS1 U.S. President and CEO Bob Carpenter, is how much power and sway today’s consumers have.

In the past, the power of comparison shopping was mostly limited to the web, where companies such as Nextag, Bizrate, Shopzilla and PriceGrabber compare everything from computers and cameras to shoes and perfume. Now, thanks to barcode scanning and price comparison apps, this capability is being pushed out to stores, where it has the power to thoroughly disrupt traditional business models.

Carpenter notes that, in the past, retailers have relied on their own loyalty card programs to communicate directly with consumers. However,  today’s consumer is increasingly looking for price comparisons and go-to apps not related to specific retailers. As a result, retailers must participate in third-party mobile apps to share private-label information with consumers. Those that stand on the sidelines risk losing mind share and market share.

However, success requires more than simply connecting with various pricing apps. GS1 and CapGemini, which consult with many of the world’s top retailers, say that there’s a critical need to ensure the accuracy of product data that’s shared over the air. In a recent joint report, Beyond the Label, the consulting firms found that between 30 percent and 40 percent of smartphone users rely on a barcode scanning app on their device. The use of these apps has increased about 1,600 percent since 2010.

Unfortunately, 91 percent of mobile barcode scans returned incorrect product descriptions; 75 percent returned no data at all 38 percent of consumers would not purchase a product if they did not trust the production information displayed about it on their smartphone.

Carpenter says that retailers must begin working with app producers to boost accuracy and create consistent and streamlined tools. Solutions that share digital product information with consumers must work in a global environment; be highly scalable; provide real-time data, and be multi-sourced to include all the data that consumers require to make a buying decision.

The end game, says Bob Fassett, vice president of North America Consumer Goods, is direct promotion, as needed, based on consumers’ wishes and company inventory flow targets. “Today, the focus is on extending individual transactions to mobile devices.” However, “Within 12 to 18 months, mobile applications will integrate personal preferences, availability of product at the local retailer or online, and provide promotional offers tied to inventory levels.”