Wednesday, January 12, 2011

Mobile Price Comparison: Will It Impact Customer Relationship Management?

Price comparison has changed a lot the way we consume. Now that customers are aware both of the quality of products and of prices in different stores, they are taking this information into consideration. It has been several years now that price comparators rule the ecommerce industry. Thanks to this tool, a website visitor is able to compare thousands of online retailer prices for the same product, and accordingly switch from one to another.

We are on the edge of the mobile revolution, and thanks to smartphones, price comparison will be possible in brick & mortar stores. People will be able to scan products and find the prices of the same product in local competitors. Some applications already exist, especial RedLaser which has been the first one.

It will for sure impact the way you deal with customer relationship management. It is somehow like one competitor being able to sell inside your own store! CRM has worked a lot on the way to create added value for customers not to only make its decision on prices, but on the overall experience and service one company can deliver.

What it will imply:
  • A faster pricing management: You will need to check competition pricing on a regular basis to adjust your price, to avoid customer leaving the store only for price purpose.
  • Propose a better service: As long as the customer feels it has a better service in your store, it won’t leave the store simply for a price difference (especially if it is minor). If your store allows him to gain points, or to leave faster the store thanks to fast cashier, it will stay.

What is sure is that these bar code scanning applications, which will compare prices, will change customer behavior in a way we don’t know. This is the topic of this very interesting article how mobile will effect on impulse purchase.

According to Nick Holland, senior analyst at the Yankee Group, smartphone-empowered consumers are growing in numbers and, as a consequence, the number of impulse purchases being made is decreasing.
Indeed, he believes those that compare prices via mobile, before succumbing to an emotional buy, show "intelligence and cunning when confronted by aggressive sales staff".
"Impulse purchases are the opposite," says Holland "showing personal weakness - they are a dirty little secret that probably isn't to be shared with others."
StorefrontBacktalk editor, Even Schuman, disagrees. He believes shoppers, even those armed with smartphones, won't be able to control their natural urges.
"Impulse purchases are indeed emotional, and rationality does not come nearly as naturally," he writes.
"For every in-aisle price- and feature-comparison that an Android or iPhone enables, there will be 20 purchases in the heat of the moment. And those impulse purchases will be enabled by mobile."

If the customer is already in store, then he has already made a great step toward purchasing. Maybe not now, but sooner or later. Therefore, an appropriate use of mobile technology may actually trigger the sales.

Procter & Gamble in the 2000s has spent a lot of money in optimizing the “First Moment of Truth”, this short period of 7 to 10 seconds when the customer make his decision on which products it will buy. Mobile usage will change this important period of the customers’ decision making process. It is still undetermined what will happen, and if, as the article proposes, mobile price comparison will kill the impulse purchase. I am still not convinced. I actually believe it will help customers to make its decision while in front of the aisle.

What do you think about it?