E-commerce was supposed to herald the end of the brick-and-mortar retailer. From bookstores to consumer electronics retailers, tech companies have been working hard to steer shoppers away from physical stores.
Now, however, some traditional retailers are trying to turn the digital tables on the competition. Using technology developed by Venice’s inMarket that allows retail businesses to send mobile coupons to customers while they’re shopping, physical retailers are trying to keep consumers coming back in search of deals rather than buying products online.
Todd Dipaola, inMarket’s co-founder and chief executive, said the company’s “mobile-to-mortar” platform is helping retailers take up arms against online sites like Amazon.com that capitalize on “showrooming” – when consumers evaluate products in person then leave the store to buy them online at lower prices. Showrooming by some estimates costs U.S. retailers roughly $1 billion a year.
A September study conducted by Columbia Business School in New York found that one-fifth of all consumers use mobile devices while in retail stores to assist in their shopping decisions. Of those, 70 percent said they visited a store to look at a product and wound up buying it online instead.
Amazon’s new Fire smartphone even has a feature the trade magazine Business Insider referred to as a “built-in showrooming tool.” The phone can identify more than 100 million items via its built-in camera and give users the option of purchasing it from Amazon.
Accessing technology introduced within the last year into smartphones using the iOS and Android operating systems, inMarket is one of several companies that has developed a platform that can send coupons, loyalty rewards and grocery list reminders to shoppers as they walk through stores.
While the new technology could be a boon to long-suffering retailers, the software relies heavily on information stored in phones, leading consumer privacy advocates to argue that inMarket and others should be doing more to inform consumers of their data collection habits.
InMarket’s technology enables smartphone apps to detect signals from Bluetooth-enabled beacons placed in stores that track shoppers’ exact locations more precisely than even GPS. Each retailer controls what types of mobile notifications are sent at its stores.
Even retailers not as acutely affected by showrooming are getting in on hypertargeted marketing. Wholesale distributor Unified Grocers, a Commerce co-operative of retailers, deployed inMarket’s platform in select member stores in California and Washington state in June as part of a pilot program. L.A. stores could have beacons installed later this year.