The film and music industries scorned videocassette recorders (VCRs) and DVDs (and tapes before that). Financial institutions feared the advent of electronic banking. And now, retailers fear the mobile smartphone.
In the film, music and banking examples, the nature of the business did change dramatically. But instead of losing, in many cases the institutions won new audiences, new revenue and profit sources, and generated new ways of delivering content that increased rather than decreased their business.
We should have learned by now, one would think, that the reflexive negativity associated with new ways of buying and selling is counterproductive. But the fear of the unknown, the sense that a poorly understood power manipulated by people outside one's experience and control generates potent emotions. This is especially true for retailers in the case of mobile commerce. Not only is a new technology fearsomely effective at providing customers with alternatives to your offerings, but they can access it inside your own establishment. They are flaunting their power and your impotence as personally as possible.
The urge to surrender to the online juggernaut is compelling. But in the same way that predecessor industries learned to cope, so must those committed to the physical act of shopping. As the following article explains, embracing this change rather than rejecting it may be the smart choice. Instead of making it harder for people to access their networks, they should be encouraged to do so. The reason has to do with a fair exchange of value. Most people are happy to share information about themselves with businesses. Using that information to tailor pitches to them, remind them when opportunities arise and keep the enterprise's name in front of them can be a good way of expanding rather than reducing sales.
Data and other types of information are the keys successful commerce. Customers who are already in a store are advertising their interest in the products being sold there. Capturing information about them thus increases the likelihood that they will buy - or refer someone who will. Using the resources at one's disposal to recapture extracted value may turn out to be the best revenge - and the optimal business strategy. JL
Margarita Constantinides, Brian Gregg and Brian Salsburg report in Harvard Business Review:
Retailers shouldn't despair when shoppers whip out their smartphones among the product displays. Smartphones could be a retailer's best friend not just because they can open up new buying opportunities.