Mobile Commerce Slowly Taking Hold Among Retailers

Mobile Commerce Slowly Taking Hold Among Retailers

By Ylan Q. Mui / Washington Post Staff Writer
Saturday, January 19, 2008

NEW YORK — The store of the future knows who you are.

Walk
into the store, and it sends a coupon to your cellphone for a leather
recliner that complements your home entertainment system. A store
employee has received a text alert that you have arrived. Need
directions? Snap a photo of your surroundings with your cell, and the
store will send you a map directing you to the right department.

These are just some of the scenarios conjured by IBM at the National Retail Federation
convention here this week, and they may not be far from reality. For
years, mobile commerce has been hyped as the future of retail, even as
American consumers have been slow to accept it. But at this annual show
of cutting-edge retail technology, the industry attempted to show it is
ready to dive headfirst into a wireless world.

mobilecommerceslowlytakingholdamongretailers.jpgA virtual fitting room, displayed at the National Retail convention, allows shoppers to show apparel to friends. (By Edouard H.r. Gluck — Bloomberg News)

"It is certainly,
I think, still an emerging phenomenon, but one that we believe is going
to continue and probably accelerate as the technology allows," said Pat
Conroy, vice chairman and U.S. consumer products leader at Deloitte
& Touche USA.

In recent years, retailers have begun relying
on text messages as a quick and convenient way to let customers know
about promotions or events. During the cutthroat holiday season, for
example, Wal-Mart sent shoppers a text message detailing secret in-store specials such as a Sony PlayStation 3 with 10 movies for $499. Cusp, a boutique offshoot of Neiman Marcus, sent customers a text yesterday headlined "Welcome to the jungle, baby!" that highlighted new safari-inspired fashion.

Now
retailers are trying to find ways to turn the cellphone from a simple
communication device into an indispensable shopping aid. Already, many
consumers keep their phones within easy reach, making it an attractive
target for retailers.

"This is like an electronic leash for most
of us," said Brad Beasley, president of CrossLink Media, a mobile
marketing company. "From a marketing perspective, nothing has the reach
that mobile does."

Cellfire, a mobile coupon company based in San Jose,
has signed 500,000 users since it began in 2005. It offers promotions
for car-rental services, fast-food restaurants and entertainment,
including deals exclusive to mobile customers. Redemption rates for the
coupons range from 5 to 15 percent, compared with .58 percent for its
dead-tree counterparts, according to chief executive Brent Dusing.

Although
some Americans will bristle at the idea of another electronic missive
being fired their way, research by Deloitte finds shoppers are highly
intrigued by the idea of mobile commerce, even if they haven’t tried it.

A
recent survey by Deloitte found 61 percent of consumers were interested
in a service that would allow them to scan a product’s barcode in a
store and receive other retailers’ lower price for the same product.
Fifty-seven percent said they would want to receive a coupon on their
phone, and 19 percent said they would be open to receiving a video or
text message about a sale from a store as they passed by.

However,
only 4 to 6 percent of shoppers surveyed said they had actually used
those services. Though the technology to integrate them into the
shopping experience exists, retailers are still grappling with how to
use it. Too often, stores approach cellphones as mini-laptops, said
Fred Balboni, global retail industry leader at IBM.

"The mobile channel is not a translation of the Web channel to a smaller footprint," he said.

Cellphones can function as tools to help consumers shop smarter or more efficiently. In South Korea,
for example, shoppers can place orders at fast-food restaurants using
their cellphones and receive a call when the food is ready, Conroy
said. In Japan,
many cellphones are equipped with bar-code scanners for customers to
check prices or even the quality and freshness of produce.

This
year, CrossLink is launching a program with national retailers that it
calls "text to buy." Consumers who register their personal information
— such as shipping and billing addresses and credit card numbers —
will be able to purchase products in certain commercials by sending a
text message to a specified number. Beasley said the service will be
tested in four locations and, if successful, will expand to 300 more.

"It
turns any type of advertisement, any type of communication into a
purchasing opportunity," he said. "It’s kind of like impulse buying at
its best."

Beasley said mobile technology is most easily applied
to services that are instantaneous, such as a restaurant sending out a
text message to drive lunch traffic or music and videos that can
download in a few seconds.

Retailers are also considering
equipping employees on the sales floor with specialized high-tech
cellphones. At the convention this week, Motorola
unveiled a phone with a built-in bar code scanner that would allow
workers to check product prices and receive calls and text messages
from the boss at the same time. Goodbye, loudspeaker pages.

Despite
these technological advances, consumers remain protective of their
phones. While they may be willing to share their e-mail addresses to
make a purchase or join a mailing list, shoppers are much more hesitant
to grant stores access to their cellphones.

"A mobile device is
like, ‘I’ll lend you my tooth brush.’ It’s very personal," Balboni
said. "Mobile devices are one of those last barriers."

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