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The Mobile Commerce Explosion
It's happening right now all around you. Although the “outrageous transformation” has yet to occur, more and more people every day are turning to their smartphones for shopping convenience and comparison. For a Christmas gift for his girlfriend in 2010, Tri Tang went shopping for a Garmin global positioning system (GPS). He found exactly what he wanted at a Best Buy store for $184.85. But instead of dropping it into his cart and proceeding to the cashier, Tri pulled out his smartphone and typed in the model number. He found the exact same Garmin GPS on Amazon's Web site for $106.75, with no shipping and no tax. Tri is part of a growing number of consumers using their smartphones to find the best deals, even when in a store with the product in hand. According to Mike Duke, CEO of Walmart, smartphone-enhanced shopping has ushered in a whole “new era of price transparency.” The “old” traditional model of using advertising to get a consumer in the store no longer works. In that old model, if a retailer got a consumer in the store, it could reasonably assume that the consumer would make the purchase there. Not so anymore. Once consumers find what they want in a store, they're turning to their smartphones to compare prices and read product reviews. According to a Nielsen survey, 38 percent of all U.S. consumers now own a smartphone. In a 90-day period from March through May of 2011, 55 percent of consumers who bought a “wireless” phone purchased a smartphone with all the apps (most of them free) necessary to scan bar codes and compare prices. According to another survey conducted by IDC Retail Insights, 45 percent of smartphone owners had used them to compare prices while in a retail store. As IDC's Greg Girard explains it, “The retailer's advantage has eroded. The four walls of the store have become porous.” To fully comprehend how quickly this transformation is generating speed, consider the findings of IBM. According to Coremetrics, a...
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