By Paula Rosenblum, Managing Partner
4/8/2008
This week, a story about Amazon’s new texting application came to me from Greg Buzek, founder and head of IHL Consulting Group. For those of you that don’t know him, Greg is one of the good guys and most researchers and analysts count him as a friend (those who don’t probably haven’t met him). If you haven’t seen IHL’s database, Sophia, it’s well worth a look. You can find out the relationship between retailers and the technologies they use easily with the tool. It’s quite an impressive accomplishment and very easy to use.
Before I put pen to paper on this article, I scrolled back through the archives of our newsletter (you can find these archives by clicking on the Retail Paradox menu item, and then select “Read Past Issues”). It’s clear we have been harping on the notion of mobile commerce frequently. In fact, typing the words “mobile commerce” into our search tool returns no fewer than 45 results. You could say we’ve been downright nagging you. I apologize in advance, because here it comes again. A nag, along with a big “We told you so.”
Last October Brian and I went to London to deliver a speech to UK retailers. We made note of a clever Saab billboard we saw. The billboard had some motion elements to it, so it gave you more than one view of the vehicle. It was very well done and at the bottom of the billboard, some fairly large print read, “For more information text 12345” (not the right number, but you get the idea). We were impressed. Here was a simple use of simple text messaging (SMS for propeller heads out there) that gave Saab an entrée into the viewer’s life. It was not fancy – but it WAS effective. I haven’t called this billboard out in an RPW article, but I’ve mentioned it in almost every speech I’ve given since.
TextBuyIt
This brings me back to the news piece Greg sent me. Last week, Amazon announced a new feature, TextBuyIt. TextBuyIt lets consumers perform price comparisons and online purchases using text message from anywhere their cell phones work. Simply text the name of a product, its description, or its UPC or ISBN to 262966 (that’s “Amazon” for those of us who can’t remember numbers) and, if Amazon stocks the product it will text message return two like products and their prices. The last step (oh so simple…), to actually buy one of the two items, text message reply either a 1 or a 2 and an Amazon employee will CALL YOU right on your cell phone to finalize the sale.
Now of course, Amazon corporate reps are playing it cool and are not saying that this feature is meant to take sales away from brick and mortar retailers… but, well… you know, you don’t have to be a neurosurgeon to figure that one out. Four years ago I engaged in a conversation with a high end retailer CIO about a similar topic… as now, I was saying then “Look out for the mobile phone – it is going to change your life.” His response was “Well, we don’t anticipate customers wanting to pay for our (this part mine – extremely high end) merchandise with their cell phones.” And I replied, “No… but they will go to Amazon and see if they have the same item at a lower price.”
The truth is, I was overcomplicating the whole thing. I was thinking web browsers, Googling and placing orders using my tiny thumb keys. Our surveys tell us that retailers are in such a morass of “spaghetti” programming code, they’re unlikely to integrate this channel into their enterprises anytime soon. But look how low-tech Amazon has gone.
1) EVERYONE uses text messaging – at least everyone under 60. You don’t need a particularly smart phone to do that.
2) They have an actual HUMAN calling you back to help you complete your order.
3) IT integration requirements are very minor. Just get a file together that includes product description, ID, and UPC/ISBN and you’re ready to go. The call center will take care of the rest.
What Does This Mean? Trouble
Amazon doesn’t have to really worry about the 76% of children between the age of 2 and 14 that visit social networking sites, or the 28% of those visitors who actually buy things on those visits (no, I have zero idea who is issuing credit cards to pre-teens, but clearly someone is giving them money to spend –at least that’s what eMarketer is telling me). Amazon has bought itself some time to figure out how to pull all that together. In the meanwhile, it’s going to use this Instant Gratification Application (IGA – my three-letter acronym of the week) to cherry pick other retailers’ business.
Yeah, we told you so. And yeah, we’re going to continue nagging about it. Every retailer needs a strategy around mobile computing in his stores. Absent a compelling reason to stay focused on YOUR offerings, customers will shop around. Our recent survey data says retailers still haven’t got the message. Only 15% of our multi-channel benchmark report respondents view the mobile phone as an important technology enabler for multi-channel retailing. I suspect our upcoming European cut of the data will reveal most of those 15% in fact come from countries other than the US.
“Seller Beware.” This one is going to hit you like a ton of bricks.
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