Friday, December 23, 2011

How business is shifting from the Brick Store to the Internet and the Cell Phone

From the link:

How do you make people part with their hard-earned money? How do you make them buy your products? How will you make money on Black Friday? According to the new findings of the Boston Consulting Group (BCG), you have to become the Jennifer Lopez of business models. You have to be—like the singer, actress and dancer—a triple threat. A couple of years ago, it was all about complementing your brick and mortar store with online presence by way of your own e-commerce site or by making your goods available on major e-tailers. But that’s an old business model now according to the Multi-Channel 3.0: The Mobile Revolution report of BCG. Now, you need to keep up with technology as well because today’s “consumers are gaining increasing control in the buyer-seller relationship through the rapid emergence of 
  • Feature-rich mobile devices
  • Social networking & 
  • Cloud computing.
 “Three recent trends in digital technology are driving the mobile revolution. 
  • First, mobile connectivity is making Internet access ubiquitous. In 2010, 43 percent of the mobile phones sold were smartphones; that number is expected to grow to 71 percent by 2015. 
  •  Second, online social networks are transforming retailing by creating new marketplaces. Every week, 800 million Facebook users share 7 billion pieces of content, and nearly half of these access Facebook through their mobile devices. 
  •  Third, cloud computing, the newest technology, is liberating storage from the limits posed by hard drives. By 2013, 60 percent of server workloads will be virtualized.”
In simplest terms, this means that more and more people will be making purchases using their mobile phones. They could view and pay for merchandise using their smartphones. This is already a big trend in Japan and other parts of Asia. Social networking sites would also grow ever more important. “Facebook has been a tremendous source of innovations, both on and off its site. Facebook members can buy goods on Facebook, find deals tailored for a particular time or place, and use virtual currency to pay for games and apps. Facebook also helps users find brick-and-mortar stores that send location-based offers and coupons to consumers as they shop onsite. Starbucks, for example, has more than 25 million fans on Facebook, where customers can monitor their accounts and purchase gift points for friends.” Burberry is one of the first brands to embrace Facebook. Today they have close to 10 million fans who get updates on everything about Burberry on a daily basis.

Another interesting finding from the article is the rise of price comparison applications. “Online retailers are expanding their reach and gaining access to offline [brick-and-mortar] stores through price-comparison applications such as RedLaser, recently acquired by eBay.

RedLaser allows customers interested in a product at one store to instantly learn what the competition is charging and to find product information and store locations. Potentially more threatening is the new Amazon Remembers tool, which could turn brick-and-mortar stores into show rooms for Using this feature, shoppers in a store can snap a picture of a product with their mobile phones, and the photo is automatically uploaded to, which then searches for a similar product. Customers can purchase the Amazon product immediately or ‘remember it’ in their Amazon account.”

What does this mean for the consumer? It will make shopping more efficient and give us access to better customer service via feed backs on social networking sites. “Without entering a store, consumers are accessing information on products and services, downloading personalized deals and offers, and making purchases through their smartphones. And once they are inside a store, they are using their phones to compare prices with online offers, check product reviews, order out-of-stock items directly, and pay for their purchases.”

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