Market Watch: The Impact of ‘Perfect’ Consumer Information
Jeff Harbaugh
- June 23 2009
- 1,773 views
- 36 comments
My wife has never had gadget lust before, but the iPhone got to her. I was politely attentive as she gleefully showed off app after app she downloaded (“For Free!” she kept reminding me).
But she got my full attention when she showed me one that allowed her to take a picture of a product bar code with the camera in the phone while standing in a store and use that picture, as you are standing in the store, to look for other prices for the same item using Google product search.
Instantly. Standing in the store. Oh shit. In the interest of full disclosure, I guess I should tell you that this app costs $0.99. HERE’s a link to the company that makes it.
Now, I’ve only played around with it in my house with various products that still had bar codes and it worked pretty well, if not perfectly. I have not yet worked up the emotional stamina to take it to one of our specialty retailers and see how it works. But I will, and I’ll let you know. That’ll be a store I’ll be real popular in.
It may presently work great, or not so well. The point is it’s going to work better. Here’s how the company, Occipital, describes its Red Laser software:
“Since launch, RedLaser has been learning from your barcodes and incrementally getting more accurate as a result. Meanwhile, we’re preparing a serious update that will make RedLaser smarter, quicker, and more fun to use. For now, keep RedLaser installed on your phone to catch updates as soon as they are available.”
They are also “…changing the way you search for information. Today, virtually all of our mobile search queries are textual. Tomorrow, many of them will be visual. Just point your camera and query into a sea of information. We call this mobile visual search. It’s faster, more precise, and more fun. We think it’s kind of a big deal.”
Snaptell uses some similar technology to help brands develop targeted marketing campaigns to cell phones.
Apple has now come out with the $99.00 iPhone. I’d bet that personal connectivity devices, in some form, are going to become ubiquitous. And the software will improve.
We can discuss the timing, but not the ultimate result. Your customer, carrying the internet around with them, will be able to compare your price with the price of the same item of other widely distributed brands at multiple locations even easier than they can now. And because of the information the bar code carries they will be able to do it with great specificity. No multiple refinements of searches required.
Let’s conjecture on the impact a little. Having done the scan the consumer might find one of three generic situations. First, they might find that the product isn’t available at any other brick and mortar retailer where it’s convenient to buy it or on line. There is, I would think, the likelihood of a quick sale at full price. The brand, and the retailer, will have done something to distinguish themselves in the eyes of the customer. This is why I think new, and carefully distributed brands are going to be so important to surviving specialty retailers.
The second situation would be where it was at some other convenient stores and some places on the internet. Prices will vary, but maybe not too much. Does the consumer think it’s worth the extra travel time or the wait time to save a few bucks? Maybe they just ask you to match the price. The retailer they are in no longer looks as indispensable as in the first example, but it may still be convenient to buy from them. The brand looks, well, not quite so cool and exclusive.
I’m sure you’ve guessed what the third generic situation is. The product is at every store, big and small, in the area and all over the internet at big discounts. Standing in the specialty retailer’s store, the customer orders the product on line wherever it’s cheapest. The retailer’s only purpose becomes to showcase the product for the connected consumer. That, of course, is already happening but will get worse. The brand begins to be reduced to a commodity to be bought based on price in the eyes of the consumer.
We are moving in the direction where consumer product information and pricing is frictionless. That is, it’s precise, complete, and easy to get. A consumer may still prefer one brand over another, but why won’t they buy it at the lowest price if it’s so easy? Answer: the retailer has to offer a measurable and relevant reason to buy from them. Don’t say “customer service.” Nobody has ever told me specifically what that means and besides, you can offer the customer service and then they can still buy it on their iPhone. In front of you. While they talk to you.
Alternatively, you can have a product that’s actually, seriously, and really distinctive from other products. Not being able to find it all over the place is a good example of that.
Why don’t you retailers with iPhones get the app, scan some of your products and see what you come up with? Then tell me on the comments section.
It wasn’t all that long ago that we needed travel agents to book plane flights. Now, all the information is on the internet and they’re pretty much extinct. How do we create value as we move towards a world of perfect information unless our products are actually distinctive and not over distributed?
Jeff Harbaugh is a consultant for the action sports industry and works with companies to identify and focus on critical business issues and opportunities fundamental to the bottom line. For more information, visit www.jeffharbaugh.com.
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