Cracking the Mobile Retail Code

Caletha Crawford
Monday, Oct 03, 2011 at 11:00 AM

Caletha Crawford is a New York-based children’s apparel consultant and part-time faculty member at Parsons The New School for Design. She has a unique perspective on the concepts, designs and companies that resonate with retailers and consumers.

I love retail. And no, I don’t just mean I love to shop (though hand me a fistful of dollars and set me loose at the makeup counters, and you’ll note I’m also a serious believer in retail therapy). I actually have a geeky fascination with the strategies stores use to try to increase traffic, cue shoppers to spend, control inventory flow, select assortments and become a destination.

Retail implementation image

As a journalist, I spent 10 years covering both wholesale and retail environments, primarily focused on fashion and accessories. My B2B audiences relied on me to enlighten them about how big issues like the economy and technology, as well as smaller choices like lighting and displays would affect their sales. Now I can’t go into a store without analyzing the layout, fixtures, music, service and selection. But even with this critical eye, there’s one aspect to which I’ve never given much thought: barcodes.

The closest I come to thinking about barcodes is a vague distrust of the ones on customer loyalty cards. (It’s unsettling to think that somewhere out there, someone knows I’m buying ice cream—again!) But my paranoia aside, a little digging revealed the revolutionary effect barcodes have had at retail. When they were first introduced in grocery stores in the 1970s, these codes weren’t exactly embraced by the public, initially being labeled a failure by Business Week and allegedly derided as a corporate conspiracy by Phil Donahue. Part of the problem was the estimated $200,000 in start-up costs stores had to pony up for barcode scanners, not to mention the expense to manufacturers who had to adjust their packaging and labeling. But once implemented, barcodes resulted in a 41 percent return on investment for stores through more responsive supply chains and lower operating costs. Further, a 1999 analysis by Price Waterhouse Coopers estimates the U.P.C. represents $17 billion in savings to the grocery industry annually.

barcode image

What does all this have to do with Microsoft Tag? Loads. Tag is the more robust 2D version of barcode’s invaluable but limited 1D technology. Each 1D code can only hold 20 characters worth of information, while Microsoft Tag’s 2D implementation stores thousands of characters. Marketers can use Tag to direct customers to mobile sites optimized with videos, product information and special offers. And the best part is, unlike costly barcode scanners, customers come equipped with their own readers—the Tag app on their web-enabled smartphones.

MS Tags image

Phones have already become an integral tool in shoppers’ buying decisions. A January 2011 survey of 10,000 shoppers by market research firm Foresee Results reveals 56 percent are already using their phones to price shop, 46 percent compare competitors’ products and 35 percent search for product specifications. These statistics show an opportunity for Tag because normally once shoppers reach for their mobile devices, the store loses control of the sale. Instead of simply selecting from the retailer’s available products, consumers are presented with infinite possibilities on the web, which may ultimately lead them to buy elsewhere. But if a store were to present shoppers with a Tag on in-store signage, they could direct shoppers to their own sites for information that would satisfy their needs.

With Tag, retailers have the opportunity to close the sale by:

  • showing the breadth of brands and models the store carries, in that location, other physical locations or on the web
  • listing pricing for all channels and products
  • providing product information and how-to videos
  • showcasing product reviews
  • reminding shoppers of price breaks or announcing coupons
  • showing which products are in-stock at that location or nearby stores
  • permitting shoppers to purchase online and pick-up at the register
  • allowing shoppers to check-in and earn loyalty rewards

Encouraging customers to use their mobile devices in this way helps the store integrate sales channels, provide real-time solutions and close the sale. This week, the Tag blog will focus on specific ways brick-and-mortar retailers can implement many of these features to combat competition from mobile channels, entice shoppers with discounts and use location-based capabilities to provide customized offerings.

What other ways can Tag help improve retail sales? Let us know with your comments below or on Facebook or Twitter.


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