NEW YORK, January 19, 2008 - The store of the future knows who you are.
Walk into the store, and it sends a coupon to your cellphone for a leather recliner that complements your home entertainment system. A store employee has received a text alert that you have arrived. Need directions? Snap a photo of your surroundings with your cell, and the store will send you a map directing you to the right department.
These are just some of the scenarios conjured by IBM at the National Retail Federation convention here this week, and they may not be far from reality. For years, mobile commerce has been hyped as the future of retail, even as American consumers have been slow to accept it. But at this annual show of cutting-edge retail technology, the industry attempted to show it is ready to dive headfirst into a wireless world.
"It is certainly, I think, still an emerging phenomenon, but one that we believe is going to continue and probably accelerate as the technology allows," said Pat Conroy, vice chairman and U.S. consumer products leader at Deloitte & Touche USA.
In recent years, retailers have begun relying on text messages as a quick and convenient way to let customers know about promotions or events. During the cutthroat holiday season, for example, Wal-Mart sent shoppers a text message detailing secret in-store specials such as a Sony PlayStation 3 with 10 movies for $499. Cusp, a boutique offshoot of Neiman Marcus, sent customers a text yesterday headlined "Welcome to the jungle, baby!" that highlighted new safari-inspired fashion.
Now retailers are trying to find ways to turn the cellphone from a simple communication device into an indispensable shopping aid. Already, many consumers keep their phones within easy reach, making it an attractive target for retailers.
"This is like an electronic leash for most of us," said Brad Beasley, president of CrossLink Media, a mobile marketing company. "From a marketing perspective, nothing has the reach that mobile does."
Cellfire, a mobile coupon company based in San Jose, has signed 500,000 users since it began in 2005. It offers promotions for car-rental services, fast-food restaurants and entertainment, including deals exclusive to mobile customers. Redemption rates for the coupons range from 5 to 15 percent, compared with .58 percent for its dead-tree counterparts, according to chief executive Brent Dusing.
Although some Americans will bristle at the idea of another electronic missive being fired their way, research by Deloitte finds shoppers are highly intrigued by the idea of mobile commerce, even if they haven't tried it.
A recent survey by Deloitte found 61 percent of consumers were interested in a service that would allow them to scan a product's barcode in a store and receive other retailers' lower price for the same product. Fifty-seven percent said they would want to receive a coupon on their phone, and 19 percent said they would be open to receiving a video or text message about a sale from a store as they passed by.
However, only 4 to 6 percent of shoppers surveyed said they had actually used those services. Though the technology to integrate them into the shopping experience exists, retailers are still grappling with how to use it. Too often, stores approach cellphones as mini-laptops, said Fred Balboni, global retail industry leader at IBM.
"The mobile channel is not a translation of the Web channel to a smaller footprint," he said.
Cellphones can function as tools to help consumers shop smarter or more efficiently. In South Korea, for example, shoppers can place orders at fast-food restaurants using their cellphones and receive a call when the food is ready, Conroy said. In Japan, many cellphones are equipped with bar-code scanners for customers to check prices or even the quality and freshness of produce.
This year, CrossLink is launching a program with national retailers that it calls "text to buy." Consumers who register their personal information -- such as shipping and billing addresses and credit card numbers -- will be able to purchase products in certain commercials by sending a text message to a specified number. Beasley said the service will be tested in four locations and, if successful, will expand to 300 more.
"It turns any type of advertisement, any type of communication into a purchasing opportunity," he said. "It's kind of like impulse buying at its best."
Beasley said mobile technology is most easily applied to services that are instantaneous, such as a restaurant sending out a text message to drive lunch traffic or music and videos that can download in a few seconds.
Retailers are also considering equipping employees on the sales floor with specialized high-tech cellphones. At the convention this week, Motorola unveiled a phone with a built-in bar code scanner that would allow workers to check product prices and receive calls and text messages from the boss at the same time. Goodbye, loudspeaker pages.
Despite these technological advances, consumers remain protective of their phones. While they may be willing to share their e-mail addresses to make a purchase or join a mailing list, shoppers are much more hesitant to grant stores access to their cellphones.
"A mobile device is like, 'I'll lend you my tooth brush.' It's very personal," Balboni said. "Mobile devices are one of those last barriers."
