Descriptions of the changes wrought by mobile technologies have a tendency to focus on the latest craze or most creative applications. But in addition to the exciting short-term changes invoked by mobile marketing and retailing, some of the shifts are permanent and expansive in their reach. In particular, mobile technology has eternally altered the way retailers allocate their budgets, price their offerings, and think about what they really provide consumers.

From a budgetary perspective, we find two main changes. First, with the widespread recognition that it is more expensive to attract new customers than to retain existing ones, many retailers traditionally assigned more of their budgets to getting new customers in their stores. They would host massive sales or spend money on advertising blitzes. With mobile options though, retailers are rebalancing these allocations, devoting more of their budgets to personalized, dedicated appeals to existing customers to encourage them to buy more. That’s not to say they are done with advertising. Rather, they are trying to leverage those less expensive retention efforts to make current customers into better customers. Second, in a related shift, retailers are spending a lot more to obtain advanced, high quality data analytics and insights. With these big data, they can better find customers where they are (i.e., on their mobile devices) and appeal to them in appropriate ways and times.

Other shifts pertain to the role that retailers adopt for themselves. For example, rather than simply providing items that people might buy, modern retailers in the mobile era must provide information and insights. It is easy for mobile customers to switch to another app to find information. To avoid that move, retailers aggregate a range of informative content and make it readily available on their mobile sites and channels.

They also provide a new form of fulfillment. Because mobile customers have different preferences for when and where they obtain products, modern retailers have had to adjust how and when they provide those items. The arrival of mobile commerce means that most retailers need to offer an option for people to buy through their mobile devices, then receive deliveries or pick up the purchases later from a store.

Finally, mobile means a new view of pricing too. Whereas once retailers seemingly had only two choices—everyday low pricing or a HiLo strategy—shoppers on their mobile devices are less swayed by these simplistic approaches. Instead, pricing strategies today rely on dynamic changes and shifts, in accordance with moment-to-moment sales rates, inventory levels, and competitors’ prices. For example, an innovative approach allows customers to show a retailer a better price online, and the shelf tag updates automatically to beat that price.

As this example shows, the changes induced by mobile technology still offer plenty of room for the “latest and greatest” types of innovation and change in the retail sector. But over time, those technological advances combine to transform retail altogether, in permanent, structural ways.

Discussion Question:

1.  How has mobile changed retailing?

Source: Jim Nichols, iMediaConnection.com, September 15, 2015