Thursday, September 29, 2011

Technology, Retail, and Ecommence

Women account for roughly 75 cents of every dollar spent at retail and women are early adopters of the IPad tablet; in less than a year the IPad, or Tcommerce will revolutionize retail.

The IPad, or tablet, is not just an ebook reader, or something to surf the web with, it is;
If you're fortunate and hip enough to own an iPad -- or have otherwise experimented with one -- the preference for this shopping device will come as no surprise. The nearly 10-inch display offers a comfortable environment for web-surfing and product consideration, overcoming the size restraints that can frustrate shoppers on mobile phones. Compared to point-and-clicking from a laptop, the touch-screen functionality provides a more immediately satisfying and tactile shopping experience. Lightweight and compact, tablets with 3G/4G connectivity are also inherently free from the constraints of the desktop; they can be comfortably schlepped from commuter trains to airport lounges to kitchen counters, facilitating purchases at every venue.
Now, Mark Zuckerberg would have you believe that Fcommerce is the next thing to "blow up"  and Facebook even commissioned a study that showed that while Facebook showed a 92% increase in referrals in August 2011 over the same month a year earlier the reality is that Facebook only accounts for 1.2% of Ecommerce conversions.  Twitter only accounted for .5% but it did achieve the highest purchase average of $121.33.  Social Media conversions represent impulse purchases, not planned purchases; planned purchases are the domain of Google and search.  An explanation of an "impulse purchase" is:
Consumers on Facebook and Twitter don’t intend to make a purchase, but rather share information. A spontaneous shopper might see an ad and get pulled into the retailer’s Web site. The shopper’s personality, combined with impulse and influence from the ad, prompts the sale or conversion.
The IPad or tablet, will totally change retail from a radically different perspective; now a consumer, armed with an IPad, can shop at any brick and mortar establishment and use their IPad to scour the internet for the same product at a cheaper price.  Thus even impulse buys will become rational.

With the announcement of the new Amazon Tablet for $199 Amazon could have become the internet based "Walmart" if their new tablet had included 3G/4G rather than Wifi.

Then of course, you will have the experts going on about "the shopping experience" and multi-channel retail, but I always refer back to an article, Don't Compete On Price, from 2007 that made the same claims and then used Circuit City as a successful case in point!

The reality is that technology, especially the tablet but also mobile technology, have the ability to turn brick and mortar retail stores into nothing but browsing catalog showrooms, much like Service Merchandise, where the purchases are made online from ones cheaper competitor.

The forces of innovation and technology always start out creating more choices and opportunities but they always end up favoring the bigger lower cost competition.  Whether one is talking about trains, automobiles, or the internet, the opportunities once created for many end up leaving only a few.

The only way a manufacturer or a retailer can compete is to focus on a niche, specialization, and  exclusivity.

No comments: