History Of Omni-Channel: Mobile Arrives In Retail

When you ask industry leaders about when mobile came to retail, a lot of them point to the introduction of the iPhone in 2007. When that thing rolled onto the scene, I think everyone knew that it was going to change shopping forever. But I don’t think it really had an impact on retail leadership’s thought processes right then, primarily because they didn’t see it impact their main business – their store business – until 2011. What happened then? Amazon introduced its price check app just in time for the 2011 holidays.

Between 2007 and 2011, the only people in retail who really cared about smartphones and their impact on the consumer shopping experience were eCommerce people. And let’s face it, even as late as 2011 (and still to this day in some companies), the eCommerce executive had about as much organizational sway as maybe a regional manager or the district manager of a particularly valuable set of stores. So when they started saying things like “Wow, we’re seeing an awful lot of our traffic start to come from mobile devices” pretty much no one else was listening.

Their response to the challenge was to “mobilize” the website – pretty much the only thing they could control of the mobile experience. Even as late as 2011, there were plenty of retailers out there who thought of their eCom site as nothing more than a largish store – a separate channel that only twenty-something males who lived in their parents’ basements used because they were shut-ins.

That all changed thanks to Amazon. When they introduced their price check app in the fall of 2011, it was a shot across retailers’ bows that they had no intention of ignoring the physical store. And they were fully aware that consumers were plenty happy to use their mobile phones to bridge the digital and physical shopping experience. I found this article while refreshing myself on dates and times – it’s pretty indicative of the coverage at the time.

At first it was pandemonium in the streets. I am not making it up or exaggerating when I say that I had more than one retailer ask me during that time if I thought it was okay to install cell phone signal blockers in their stores to prevent consumers from accessing the internet while they shopped – or rather, more precisely, checked prices online before they bought.

There were a lot of existential arguments about how it wasn’t fair for stores to compete against online prices because the cost structure of stores is different and price checking apps weren’t all that balanced because a lot of them left out shipping costs (moot if you’re an Amazon Prime customer). That consumers just didn’t seem to value the expertise of in-store employees (which was only true if you were Container Store, as everyone else had cut labor and training to the bone). Whine, whine, whine.

We’re still experiencing the aftershocks of this particular milestone. It was only this last holiday season that a lot of the major store-based retailers updated their price-matching policies to say they would match some of the major online competitors, including Amazon.

And as a consumer, I can personally attest to how the mobile phone has changed my shopping behavior when it comes to out of stocks. You’re out of my favorite brand of [insert product category here], Target? Well let’s just see if Amazon has it. Oh yes, they do. And they’ll give me 5% off if I subscribe and save. I’ve done that for lip balm, for tea, and even for chocolate chips. Drag my surly teenager to ten stores in the mall on the off chance that I might just maybe find one pair of size 28×34 jeans that he will actually wear? Forget it. At best, I might check my phone to see if you have some in stock at THAT STORE because I know I’ll be driving right by it this afternoon, but if you can’t give me that information in a compact, efficient way, then you’re out. You lost.

Now, let’s marry those two trends up: mobile sites that were initially designed by an eCom team who had no internal support from anyone else in the business vs. the store team who suddenly freaked out when consumers started using their mobile phones as part of the in-store shopping experience. A recipe for disaster, right? And the industry is still experiencing the aftershocks of that collision too – with a lot of scrambling around about mobile, and a lot of griping that past mobile investments haven’t panned out (big surprise – they were never designed for how consumers actually want to use them. And don’t go blaming the eCom team – where were you when that decision was made?).

The good news is that we’re turning the corner when it comes to mobile. Retailers are starting to recognize that it is an integrative experience. And that its main focus may not be on commerce so much as engagement (these are findings from our Mobile benchmark – a great read). Retailers have gotten over the whole price transparency thing, either by defining more holistic omni-channel pricing, or finding some promotions-based way to navigate the channel conflicts. And they have come to recognize that competition is competition, whichever channel it may live in.

Now they just need to figure out how to actually use mobile as part of the shopping experience – the end-to-end shopping experience. And not let it languish as some kludgy adaptation of the desktop site. Then we’ll get somewhere!

And I’m not done yet! Conference season is coming up, and I’ll have a lot to say from the conferences I attend this spring, but I’ve got at least four more parts to this series before I’m done!