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Mobile Shoppers Putting More Pressure on Retailer Pricing

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Smartphone shopping apps are helping consumers buy more online, and they’re getting people better deals on the street. Two new data points from online auctioneer eBay (s ebay) and price comparison app Scanbuy help drive that home, and more importantly, suggest where things are ultimately headed: Deal-hungry users are increasingly going to put pressure on retailers, both online and offline, to change prices in real time to satisfy these more savvy buyers. First, here’s the news:

  • EBay said Wednesday that global mobile sales brought in almost $2 billion in 2010, up from $600 million in 2009. In the U.S., eBay mobile sales grew almost 175 percent, generating nearly $850 million in gross merchandise value in 2010.
  • Meanwhile, Scanbuy said mobile barcode scanning activity was up 16x in 2010 over 2009, with scanning in the fourth quarter doubling that of the previous quarter. The big scan days were the day after Thanksgiving and Christmas Day.

What this confirms is that consumers are wielding their smartphones as shopping tools, arming themselves with data that’s informing their choices. In some cases, it’s pushing people to buy online. In other cases, they’re searching for better deals nearby. But as users get more access to pricing data wherever they are at all times, it’s going to force retailers to have to react more in real time with their pricing. If users can see there are deals to be found elsewhere, retailers are going to have learn how to respond quickly with counter offers.

As IDC put it in a recent report on mobile shopping: Consumers are “ready to use their mobile devices in ways that transform how they shop everywhere and, in particular, how they shop in retail stores.”

This is good news for consumers, who can leverage this data more for in-store discounts and bargaining. Flash an online price of a product at a Best Buy (s bby) employee, and see if the price can be matched or beaten. It’s going to put more pressure on retailers to monitor these pricing schemes and devise quick strategies. It’s not enough to just offer check-in coupons and offers; they’re going to have to be aware of the competing offers available to consumers as they hunt for bargains. One option for physical retailers is to make the in-store buying process easier, possibly through emerging applications like AisleBuyer, a service I recently wrote about that lets users do mobile self-check-outs. The war is on for those shopping dollars, and retailers need to have some kind of real-time battle plan.

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6 Responses to “Mobile Shoppers Putting More Pressure on Retailer Pricing”

  1. Mukesh Aggarwal

    Or retailers will just slap a customized UPC on each product. That would make all these comparison shopping apps useless. Walmart does it already where their product numbers/upc are only available at walmart.

    • I think you are right retailers have had this scheme for years – “we will match any price on identical item” and then having unique product code for the product in their stores.

      These days it is not hard to get unique bar codes from the vendor or to whip up your own in store codes tied to a database on your internal network.

      Unlike the old Syms clothing tag line “An educated consumer is our best customer” today an educated (or equipped consumer is an attack on the bottom line.

  2. Wow,
    Great post. Thanks Ryan! Om should encourage folks to put out similar posts.
    I did exactly the same seven times in last three months. I was shopping for a LED TV,couple of laptop hard drives, hard drive enclosure,Mobile USB car charger, couple of games. I started my shopping with BestBuy. During each one of my visits to BestBuy I checked the prices on line. I did not buy any of these items from BestBuy. Why ? with the exception of LED TV the rest have become a commodity items. So no point in paying more to BB while the same thing is four times cheaper on eBay. All my money went to Ebay followed by Amazon.

    BestBuy will probably be dead soon. The only business they with have is with people who are not tech savvy or who don’t have a smart phone or who wants to go to a “real store” for buying stuff.

  3. Of course, the retailers will then try to do what Southwest Airlines has done (and American Airlines is trying to do) in the airline industry – namely, keep their retail information on its own separate site, unsullied by competitive offers.