Sears announced that it will close between 100 and 120 Sears and K-Mart stores due to lackluster holiday sales figures. One culprit being blamed is e-commerce. Two others are mobile and social technologies.
According to a Forbes’ article – Over-Retailed Nation. Sears to Shutter At Least 100 Stores – brick-and-mortar stores are becoming little more than showrooms for online retailers. It’s a buying pattern that takes consumers first to e-commerce sites like Amazon, then to a B&M store to view the product, then back online to make the purchase. It’s a behavior that’s hurting a lot of retailers, too, not just Sears. Best Buy, for example, is getting a reputation as being a showroom for Amaozon, suggests the New York Times blog Bits.
Mobile and social technologies get their share of the blame, as well, with Forbes alleging that online retailer’s are using mobile and social media to “lure shoppers to their sites.”
Mobile Price Comparison Poses Threat
Certainly, the use of mobile technology poses a growing threat. In-store comparison shopping using mobile devices is gaining in popularity among consumers.
Mobile apps, such as those offered by Google, Amazon and PriceGrabber, allow shoppers to take a photo or scan a barcode of an item, then go online to view prices offered by other retailers. “A May survey of 3,000 shoppers…found that about 40% had searched for a lower price using an in-store shopping app or search engine, then purchased the item for a lower price online,” said a Wall Street Journal article.
This real-time, price-conscious behavior has led to stores either matching competitors’ prices or offering exclusive product lines unavailable elsewhere. For example, as much as 56% of the products sold at health-foods brand GNC are either exclusive or GNC branded, stated the Journal. BestBuy CMO Barry Judge said, “We know what Amazon’s price is on everything they sell.”
Oracle, in its May 2011 research report, said that mobile commerce is growing dramatically. Up to 48 percent of all U.S. consumers are using their mobile devices to research and browse products and services, and those numbers have grown steadily – up from 37 percent in a consumer benchmark survey commissioned by ATG in July 2010, and 27 percent in a consumer cross-channel survey taken in November 2009, according to the report.
With nearly 3 in 10 consumers making mobile purchases, and close to half researching and browsing products and services on their mobile devices, mobile is clearly becoming a connector of all other shopping channels.