5 Mobile Technologies Retailers Should Be Using Now

Technology has always played a major role in the evolution of the retail industry. From the introduction of the barcode to the installation of the first IBM 3660 supermarket system, technology has influenced the way retailers run their business.

Today, e-commerce and mobile commerce are driving the next major shift in retail. Broadband Internet is nearly a commodity, and mobile phones are ubiquitous among consumers. Retailers that can learn to harness this technology stand to gain a competitive advantage, especially when the economy recovers.

But with new tech startups emerging on the scene every day, it can be difficult to filter through the PR noise and find technologies relevant for your business. So to help you get started, we put together a list of 5 mobile technologies that you should be using right now. Many retailers are already using these technologies and reaping the benefits. If you have had success or failure using any of these applications, please share your experience in our comments section below.

Geolocation Apps
“Geolocation” is being recognized as the tech buzzword of 2010. Using your smartphone and either GPS or cell phone towers, geolocation apps announce your location to your social network. Also known as location-based social networking, these apps are spreading like wildfire. A number of players have emerged on the scene (e.g. Gowalla, Kickball, MyTown, Loopt), but Foursquare leads the way…

Foursquare’s mission is to get users to experience new things and places, then reward them for it. Users earn points every time they “check in” at a location and share their whereabouts with others. The more often you visit, the more points you earn and the closer you are to becoming “mayor” of that location. Mayors are often further rewarded with discounts, give aways or other promotions.

Thousands of national and local retailers are now using Foursquare to incentivize consumers to visit their business. For example, the women’s apparel retailer, Ann Taylor, gives a 15% discount to users that have checked in 5 times at a location and a 25% discount to mayors. Starbucks awards frequent patrons with discounts and free drinks. Our local Wholefoods in Austin awards the Mayor with free coffee 24/7 and a free meal every Friday.

How can this help your business? For starters, Foursquare gives you increased exposure on social media and the web. Every “check in” gets pushed out to a user’s social network, including other Foursquare users, Twitter followers or friends on Facebook. Retailers might generate more sales from this extra exposure or from frequent patrons vying for “Mayor” status.

What’s most interesting about the technology is how it bridges the gap between online promotions and in-store sales. Foursquare provides businesses with “venue stats” like how many users visited the store, what the time of day they entered, who are the most frequent visitors, the gender of visitors and more. This data can provide valuable insight about your customer demographics and their purchase patterns. It could also be used to run special promotions like rewarding visitors that draw new customers to the store. Best of all, it could allow you to measure the effectiveness of Foursquare campaigns by assigning a unique promotion code to each and then tracking it back to the sale.

ShopAlerts
ShopAlerts is another app that could fall into the “geolocation” bucket. Developed by Placecast, the technology delivers SMS text messages to consumers’ mobile phones when they enter inside the “geo-fence” or virtual boundary of a business. These messages can include any kind of information from promotions, discount codes, coupons and more. And because announcements are delivered via text, a smartphone is not required; a boon to the 196 million Americans that don’t own smartphones.

Retailers like Sonic, American Eagle Outfitters and REI are already experimenting with ShopAlerts. These companies participated in a pilot program that produced astonishingly high results: 65% of shoppers that received a text message ended up purchasing a product (source).

Consumers also report having a positive experience with the technology. Sixty percent of participants found the messages to be innovative, 79% said it increased their likelihood to visit a store and 73% would definitely or probably use the service in the future (as reported on Techcrunch).

ShopAlerts has potential to be a sales-driving machine. Couple this technology with data pulled from the customer relationship management (CRM) application in your point of sale (POS) software and you have a new means to upsell or cross-promote merchandise. For example, say a customer of a sporting goods store purchased running shoes. Next time the customer travels within the “geo-fence” of that store, ShopAlerts could send an alert asking if they need a new pair of socks, jogging shorts or a dietary supplement. Alternatively, the message could be used to build brand favoritism, like thanking them for the purchase, asking about their shopping experience or requesting that they share a review of the new footwear.

Barcode Scanning
Barcode technology is experiencing a renaissance. With the development of mobile barcode scanning apps, this 60 year old technology is making it’s way back into the limelight. According to ScanLife, mobile barcode scanning is up 700% in 2010. Apps like ShopSavvy, CheckPoints, ShopKick are all riding the waves of this trend, but RedLaser leads the pack with over 5 million downloads.

There are a number of ways retailers and customers can use this barcode scanning apps. For starters, customers can scan product barcodes to read product reviews, learn about complementary offerings (e.g. what pants look best with this shirt), tag products for Christmas wishlists or wedding registries, or find out how and where to purchase an out of stock item.

Barcode scanning apps are also being used to navigate to websites, retrieve discounts or coupons and enter contests. For example, Nine West kicked off a campaign that allows customers to scan 2-D bar codes on in-store signage and product packaging. If the customer texts the image to a designated phone number, they are entered into a contest to win apparel and other prizes.

The most popular use of this app is to compare prices. Shoppers can scan the barcode of a product then compare the in-store price with prices online from Amazon, eBay or other e-commerce stores. In fact, both Amazon and eBay are trying to capitalize on this trend by developing their own barcode scanning apps.

Finally, a number of retailers are using the technology in reverse. Instead of customers performing the scan, sales associates scan barcodes off customers’ phones. Customers can opt-in to receive special discounts and coupons on their phones, then get credit while checking out at the cash register. Target and J.C. Penny are two of the major retailers that have already rolled this out across their stores.

Group Buying
Can you name the fastest growing company ever? It’s not Google, Facebook or Twitter. It’s Groupon, a 17-month old web company that is expected to generate over $500 million in revenue this year.

What is it? Groupon (group + coupon) presents one deep-discounted deal at a time on their website. In order to receive the deal, a predetermined number of shoppers have to purchase it for the sale to become active. Herein lies one secret of Groupon’s success. To make sure a sale becomes active, shoppers will naturally promote the deal to friends, family and their social media network.

Groupon is not alone in this space. LivingSocial, BuyWithMe, SocialBuy and Groop Swoop are all trying to cash in on the novelty of group buying. These sites are being fueled by coupon hunters, social media stewards and other early adopters.

So how are group buying websites transforming the retail industry? Foremost, they are affecting how people shop. Groupon has over 16 million subscribers and has sold over 15 million coupons. The numbers alone reveal just how popular group buying has become.

Meanwhile, retailers are seeing increased traffic and sales at their stores. There are several case studies on the Groupon website that describe the success stories of retailers using Groupon. For example, Zocalo Cafe, a local Tex Mex restaurant here in Austin, noticed a 33% increase in sales during the month they ran a Groupon promotion. Capricious Skin Care, a spa that sells high-end skincare products, reported that 10% of Groupon customers booked additional services on the spot and 25% purchased products not included in their Groupon deal.

Milo
Milo may soon lay claim to the “disruptive innovation” title in the retail industry. Their mission: “track every product on every shelf of every store in real-time.” In other words, the website shows you where a product is in stock, how much it costs at each location and how much it costs online. It’s the ultimate real-time price comparison tool.

How will Milo disrupt the market? Foremost, Milo amplifies the existing competitive dynamic between traditional brick and mortar retailers and e-commerce retailers. Brick and mortar stores will continue to gain from the “instant gratification” and tangible benefits (i.e. seeing and touching a product) of buying at a store. E-commerce retailers will continue to attract the price-sensitive shoppers that don’t care when a product is delivered.

Meanwhile, Milo could reduce brick and mortar stores to “showrooms” as Chris Dannen suggests over at the Upwardly Mobile blog. He proposes that consumers will use websites like Milo to perform their initial research for a product, visit a retail store to see it in person, then just buy later from the cheapest retailer.

But as Milo hopes, the website will be a win-win-win for everyone. Brick and mortar stores will benefit from increased exposure on the web and more foot traffic to their stores. E-commerce retailers will win the price-sensitive shoppers. Consumers will get the best of both.

Regardless of how this plays out, it might be several years before Milo has enough products and retailers in their database to make this tool truly valuable. They are off to a strong start with over 2 million products from 150 retailers at 50,000 locations in their catalog. But they will need the “buy-in” from both local and national retailers for this to be a truly valuable technology.

So which of these five technologies do you think will have the biggest impact on the retail industry? Have you had success or failure using them in your business? Let us know what you think by leaving a comment below.