Smart phones 'scary' for retailers as shoppers access product reviews
For retailers, the emergence of Web-connected smart phones alternatively offers a major opportunity and presents a frightening new paradigm in which consumers can read online product reviews while examining items at a store.
“That’s a really scary thing” for retailers, said Larry Freed, CEO of Ann Arbor-based Web customer satisfaction firm ForeSee Results.
The growth in the smart phone market, which includes Apple’s iPhone and Research In Motion’s BlackBerry, for example, is offering instant Web access to shoppers. Cell phone companies shipped 43.3 million smart phones in the third quarter of 2009, up 4.2 percent from 41.5 million in third quarter of 2008, according to Massachusetts-based research firm IDC.
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Experts expect that it’ll become increasingly hard for products with poor customer reviews online to hide as consumers search the Internet for product details while standing in a store.
While visiting a store, customers can also compare prices with the store’s online competitors.
They could walk “down the aisle of a retailer and say, ‘I got the same product here on my smart phone.’ Literally are they going to hold it to the associate’s head and say, ‘Match the price or I’m going to hit this button’? It could start to happen,” Freed said.
Freed said the trend makes it imperative for retailers to create their own smart phone applications, which allow customers to browse products in an environment controlled by the retailer.
“Retailers are going to have to create a better mobile experience, a better integrated experience for their consumers with their mobile apps while they’re in their stores,” Freed said.
The threat of unlimited access to product information and competitor pricing could lead major retailers to invest in clandestine “viral marketing,” in which a company secretly pays bloggers and other online sources to promote its products.
“I think there’s probably a lot of people that are doing that and getting away with it, but it’s risky,” said Derek Mehraban, CEO of Ann Arbor-based marketing firm Ingenex Digital Marketing. “Any brand with integrity would not want to do that.”
Instead, companies should invest in Web development that allows online customers to post reviews directly to the retailer’s site.
“Making it easy for people to easily give you thumbs up and a five-star review - that’s really, really important,” Mehreban said.