In the late 1990s, customers walking into a bookstore and seeing a new book could experience it simply by opening it, but with tens of thousands of new music, video and game releases every year, only a few hundred got public exposure while the rest were filed away in the browsing racks of stores — with no direct way for customers to experience them. 

 

I realized that technology held an answer: distributed in-store product barcode scanning and sample serving stations. It took until 1996 to launch the first such system in the world at Trans World Entertainment (TWMC), which quickly succeeded, earning a Billboard Magazine article in February 1997. Soon after, Barnes & Noble, Borders, Best Buy, Target and other retailers installed similar systems. Customers had a whole new way of exploring new artists and releases.

 

A guiding principle during my career has been that technology will impact retail so as to maximize cost-effective customer transparency of product and service information, price, location, availability and related promotional offers. More than ever, technology — particularly the mobile phone — will make or break retailer fortunes: every aspect of product and service will be transparent. Shoppers will increasingly use mobile phones to maximize the convenience, service and total price including bundle offers proposition offered by retailers.

 

The mobile phone is the fastest-growing and third largest sales platform for commerce as well as for building and managing a merchandising relationship with customers behind physical stores and the "non-mobile" Internet. The growth driver is portability: location-based convenience of product selection, location and purchase where each of these may happen in different ways and in different locations. A customer may learn about a product by scanning its barcode in one store, but buy it in another or on the internet based on more attractive total price and bundle offers.

 

Considerations for the retailer:

 

• Is your strategy based on customer focus and transparency, or are you secretly trying to hide a market-inferior product/service proposition? Fix the latter quickly because supply chain efficiency and purchasing power, in the absence of extremely compelling convenience elements or customer services tied to a complex product, will determine retail winners and losers.

• How much of the customer data stemming from mobile device activity of your customers do you own and control — or at least have the right to access — from the plethora of mobile phone transaction and advertising enablers? Are you meaningfully aggregating and using it across channels? Do you, or does your provider, know more about your customer as relating to your business — and if they do, how are you protecting the customer profile that they are building from your transactions with that customer?

• Are you seeing the coming and preparing for customer presence awareness in your store based on their mobile device becoming a new traffic counter and sales conversion metric? How are you planning to interact with them when they are in your store, for example: ShopKick?

• Are you thinking about using technology to intercept a customer in real time who has just scanned a product code for an item you sell or for an item you sell accessories for in a competing establishment with a better in-store or Internet offer? What if your competition is planning on doing it to you?

• Are you segmenting the demand elasticity of price for customers with a known mobile ID to effectively target them with promotions?

• Price, promotion, in-stock, are no longer weekly or even daily concepts: they are quickly becoming real-time, with the retail battle happening in virtual space for the marginal, very savvy but profitable customer, and more and more customers are becoming that customer. As a CEO and CMO, what are you planning and doing to win in this critical space for retail growth and market share?

 

With the customer experience and technology evolution in mind, in the early 2000s I saw the mobile phone as the interface between customer and retailer to provide mobile, real-time transparency of product information, price, location, availability, promotional offers and even in-store recognition of the customer's presence, profile and suitable interaction. 

 

Patents that I filed then have since issued as Nos. 7,929,958 and 7,957,725 and relate to acquiring product codes via mobile devices and obtaining product information, prices, location and inventory; as well as in-store customer-retailer interaction.

 

The future is not that hard to imagine: just follow the implications of the right guiding principles and cost-effective technical feasibility and position your company accordingly.