Friday, October 12, 2012

Disruption from Mobile Extends Beyond App Downloads

The smartphone market, as an outgrowth of the PC market with several of the same leading brands carried over—most notably Apple and perhaps soon, Microsoft—is big on specifications. Screen sizes, storage capacity and, since the App Store was unveiled a few years ago, the number of apps available for download on a given platform. In Apple’s digital marketplace alone, the original App Store, more than 650,000 apps are now available.

Thousands more are available for Android users—through both Google Play and Amazon, and Microsoft is slowly building its market with thousands of apps for Windows Mobile, as well. Add in the staggering number of actual downloads—more than a billion per month on Apple devices alone—and large numbers dominate the mobile conversation.

But lost in the numbers is the impact of the transition to mobile. Certain uses of these devices have a significant effect on some industries, especially retail and commerce. Looking at a few apps currently on the market is a glimpse of the seismic changes ahead as mobile apps simultaneously become increasingly advanced and ubiquitous.

For example, every retailer’s worst nightmare came true when a startup app developer named Occipital released its iPhone app, RedLaser, in 2008. RedLaser, now part of eBay and available on multiple platforms, scans barcodes using the camera of a smartphone and queries competing retailers for price comparisons. The already slim margins of retailers shrink to nothing when customers stroll the aisles doing instant price comparisons that would have beeen impossible only a few years ago.

"Brands and their retail partners must adjust to the reality that in the new mobile world, no one truly shops alone." —Joe DeSetto

But miniaturized margins are only the beginning of retailers’ concerns. When you barcode scan toys this Christmas, one of the retailers most likely to appear is, of course, Amazon. To date, local retailers held one serious advantage over Amazon—immediate gratification. Even if Amazon could beat a local store on price, many customers won’t wait three to five days for the FedEx truck.

But what happens when you combine mobile scanning with same-day delivery? We may be about to find out. In several cities across the United States, Amazon is beginning to roll out this option as it builds large distribution centers within a few hours drive of millions of customers. The time is drawing near that customers in a retail location could scan a product, order from Amazon right on their phones with a credit card on file and still have the product a few hours after the day’s errands are finished.

While this bit of futurism won’t immediately spread to everyone and requires Amazon to build out even more infrastructure than it currently has in place, the secondary effect of customers shopping with mobile apps in tow has already taken hold. Mobile devices are great for research. As such, not just rewards and price comparisons are a tap away, but product reviews, how-to videos, the friend on Facebook with an opinion on everything, and other sources of hard facts and completely subjective impressions.

Brands and their retail partners must adjust to the reality that in the new mobile world, no one truly shops alone. The brand’s j-hook displays are no longer the only connection to the customer. Smart brands must now consider how mobile devices at every step of the customer interaction will significantly change behavior, as their customers will be looking to their phones as a source of information, opinion, prices and promotions. Thousands of apps are out there, but the truth is that users with only a few apps installed on their phones still disrupt industries in new and surprising ways.

* Republished with permission from Paybefore, as published September 2012.


Joseph DeSetto is Paybefore’s emerging payments blogger and program manager of the Mobile Development Bachelor of Science degree at Full Sail University. He is the author of The Business of Design and previously served as chief technology officer for two mobile startups.

Paybefore™ is the leading provider of information to the prepaid industry. 

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