Consider this: you're shopping for a television in a big box store. Let's say you find a 42" LCD that you love. The price is $1,499 in the store + sales tax. You whip out your Android-powered phone (i.e., Android = Google powered, it's available now at T-Mobile), scan the barcode of the product right there in the store and, within seconds, a list of online retailers shows up with the same product for $400 or $500 less with free shipping. Next to this is a button that says "Order Now?" What do you do? If it's me, I would order it from the online retailer without thinking twice and walk out of the store I was in. This is terrific and it is here NOW.
What struck me was the specter of what this kind of thing could do to brick and mortar retail. If physical stores cannot compete with this (and they cannot in my opinion), what will become of them? There are always people who will need things immediately (computer cables, DVDs, blank CDs, etc.), but when it comes to high margin stuff like televisions, digital cameras, and computers, life is about to become even tougher for retailers. Saving 30% and sometimes 50% by shopping online is pretty significant. Yes, buying products online has pretty much always been less expensive, but now a person can just point their phone at the product and have the information in seconds.
With the Apple iPhone and Amazon.com, all you need to do is take a photo of the product. They've gotten that smart. Pay attention to the video below at 1:17. Just take a photo of something like a TV and it will figure it out for you.
Will the world end up with fewer retailers and more fulfillment centers eventually? Time will tell and I would reason to guess we are headed in that direction. Not everyone uses this technology...yet. All it takes is a modest amount of consumers to stop buying high margin items from big box stores. Most of these stores are in trouble as it stands already and this could be the tipping point. I speak from a bit of experience as I was in the music business for over a decade and watched profits erode as MP3s and file sharing cut out the need for distributors. That's another subject, but that experience is still pretty fresh.
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3 comments:
Nice article thank you for posting. I didn't even know this technology was out there.
I too think this will eventually hurt big box retail. Take a look at Best Buy and Circuit City. They have mediocre service, their prices are very high and they have onerous return policies on a lot of their merchandise. I would wait an extra day or three to save several hundred dollars.
Jim
Excellent information. Thank you.
KJ
That is amazing! Thanks for posting this. Laura Kopps.
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