Price-comparing mobile applications are increasingly paralyzing the brick-and-mortar retail stores. A few years ago, consumers spent hours comparing prices of a particular item by shuttling between different stores. Today, investing a few seconds using a smart phone app gets the job done. (Financial discipline is the key to successful growth in the retail industry. Check out The 4 R's Of Investing In Retail.)
IN PICTURES: 5 Money-Saving Shopping Tips
Mobile shopping is changing the rules of the game. In the wake of this new trend, retail stores are aggressively pumping up their mobile marketing strategies through different ways of attracting shoppers to their stores. Latest numbers on mobile advertising reveal that this trend is growing - 85% of marketers are doing some form of mobile marketing or advertising.
Cellphone service carriers are now offering location-based shop alerts in which consumers receive promotional messages from different stores in their area offering discounts and special offers. While this service was newly launched in certain parts of United States, it's spreading like wildfire and giving consumers plenty to choose from.
These messages look something like this: "Attention Kmart shoppers, $5 off merchandise purchase of $50 or more at any Kmart. Your nearest store is 1360 Ahsland Ave N, Chicago – offer valid today only."
These promotional messages make it convenient for the consumer to keep a track of retail deals.
Apps Offer Rewards and Discounts
While some retailers are partnering with cellphone carriers, others are joining hands with mobile app developers to reach their audience. For instance, Shopkick, launched in August last year, is a mobile application developed by Cyriac Roeding, Jeff Sellinger and Aaron Emigh that has signed up several big retail brands like Best Buy, Macy's, American Eagle Outfitters and Sports Authority for reward programs. Shopkick gives the consumers "kickbucks," like points, after verifying their presence in a specific store. These points can be redeemed for gift cards, Facebook game credits, music downloads or even charitable donations.
Apart from these points, the consumers also see special discount alerts and promotional offers on their phone upon entering the store. So, if a customer is busy checking out all the store offers on his mobile phone while walking through the footwear aisle of Macy's, there is very little scope of comparing prices or even shopping online. This also narrows a customer's focus while shopping in physical stores, which is a plus for the retailers.
While location-based marketing could turn around the retail business for most, improper advertising can lead to consumers regarding the messages as spam. According to Juiper Research experts, the main focus of this mobile marketing system should be on sending out the right messages to the right people in the right area. (To analyze retail stocks, investors need to be aware of the most common metrics used. To learn more, see Analyzing Retail Stocks.)
Big Brands Jump In
A growing number of retailers are grouping with mobile application developers to fight the tough competition with mobile shopping. A few of them have come up with some unconventional marketing techniques.
Shoe retail designer brand Steve Madden is also dabbling on mobile marketing that has proved successful in maintaining its customer base and boosts sales. The retailer is testing a couple of different marketing programs. Madden will be starting an "instant win" text program during the holiday season that will encourage shoppers to send a keyword to Madden's short code to see if they instantly win a special item.
In another marketing effort, shoppers can receive MMS containing videos and imagery of certain products they like.
Electronic retail outlet Best Buy is tying up with a U.K.-based mobile banking and payment service firm called Monitise to establish its mobile marketing strategy. The app, Mobile Money Market, will help consumers insert their product code to process and finish the transaction.
IN PICTURES: 8 Financial Tips For Young Adults
The Bottom Line
Many would think that brick-and-mortar retailers are lagging behind in this unstoppable race powered by technology, but their online and mobile presence is bringing them back into the competition. Going forward, a consumer will have many options to shop in-store, mobile and online. New technology creates increased competition for retailers, and puts consumers in a winning situation.