Six Pixels of Separation - The Blog
December 9, 2011 8:43 PM

The New Disruption

When digital mingles with our physical lives, everything changes.

I'm a bit of a bookworm (#nerdalert). I'm doing my best to read one book every week (but failing miserably). The way I buy books has changed dramatically in the best few years. I used to love my book collection. I loved it so much, I would sometimes buy both the hardcover and paperback versions just to support the arts and the authors. After my last move, I stopped loving my book collection. The packing, the weight, the organizing, etc... seemed very antiquated to me. My current book reading is done on the Kindle app. I don't own an Amazon Kindle, I read books on my iPhone with the Kindle app. I hardly use my iPad anymore as I travel with the MacBook Air and I don't like reading books on the computer (just yet). While I often peruse the Kindle and iBooks app to see what's new and exciting, I still love heading into bookstores to flip through the books and wander the aisles. When I've made my purchasing decisions, I'll crack open the Kindle and iBooks app and buy my books - right then and there - on digital format. Being a retail creature of habit, I realize how bad this is for the retailer, but the truth is that reading, buying and storing my books in the cloud trumps all.

Retail is going to have to change. 

Amazon just released a new mobile app called, Price Check, that allows consumers at the retail level to use barcode scanning, their camera or speech to text search to price check and compare with Amazon (and their merchants). Imagine the possibilities here. Once again, Amazon is changing not only online shopping but the entire retail experience. I am a huge fan of Amazon Prime  because it not only allows Amazon to build a very strong and targeted loyalty and analytics platform, but it turns every purchase into an impulse buy. If you can have something shipped as fast as possible to you and can return it - no questions asked - then the retail game changes. Price Check does this as well. It forces retailers to pay attention to their pricing. It forces retailers to know that everyone now has a price gun on their smartphones, only this price gun is plugged into one of the largest and most aggressive retailers in the world. It also forces retailers to think differently about their in-store experience. If a better price can be had somewhere else, there needs to be more... a reason to keep on coming back. We can hold up the Apple retail experience as a Golden Child in this instance simply because they rarely put things on sale and their environment is not crowded with merchandise. Their retail experience is much more about creating a direct relationship with their consumers than it is about selling them something.

The gold is in the data.

Amazon is not hiding how they benefit from Price Check either (and it goes well beyond them selling another book). They are in it to capture data and this, particular, data set is pure gold. If millions of people start using Price Check (and if you have a smartphone, why wouldn't you?), imagine Amazon's understanding of the market, pricing (by location and down to consumer) in terms of which stores are not only selling a product at a particular price, but they're also better able to understand consumer buying habits and trends in real-time. Who else will have this kind of data and access? If Price Check takes off (and I think it will) it could change retail forever... or least force retailers to face the digitization of everything.

Disruption will continue. What brands do about it will be very telling.

By Mitch Joel


Comments Comments Feed
  • Posted by Victoria
    Mitch Joel

    This is great, Mitch. Just read the WIRED interview with Jeff Bezos and much of what you wrote here brought that to mind. I appreciate the incredible mix of humility and authority with which you write. Always good information from you; always shared
    without arrogance. Love it.

    Reply
  • Posted by Luis London
    Mitch Joel

    Technology comes to our rescue, I am very happy that there is people out there thinking about us customers. Well, as they think about themselves too for sure, I believe it creates a win-win situation.

    This will change retail the same way the music industry changed years back.

    Reply
  • Posted by CT Moore
    Mitch Joel

    It'll be interesting to see how this affects retailers who advertise that they'll match any lower price that a customer finds. The overhead for online retailers is just so much lower. So yeah, B&M retailers will really have to create a unique experience / direct relationships if they want to survive.

    Reply
  • Posted by Marc Binkley
    Mitch Joel

    I've not tried Price Check yet Mitch, but I'll download it next. I did just recently download the Kindle App for my iPAD which is great because I was able to start reading The Flinch by Julien Smith and hope to read Do the Work next.

    I think these types of branded touch points (or data mining models) are taking off because they disrupt the status quo. Rather than the person asking for your postal code at the till and a company making sweeping generalizations about consumers, our actual (online) behavior can be evaluated to improve the customer experience in very specific, personal ways.

    Take for example the Domino Project. Its disrupting the status quo of book distribution. Rather than buying just one book and recommending others to buy it as well, the Domino Project serves to make ideas more sharable. Buying a book from the domino project means that I can affordably purchase multiple copies to share with friends or colleagues. The data gained from that transaction can be evaluated by Amazon to make recommendations of books that are likely interesting to my network. Doing this creates a better relationship between my network and the brand.

    Reply
  • Mitch, I've been thinking the same! That's how I shop as well- look at items in person, buy most things online. For years I've been thinking that ultimately, many retailers will become mere showrooms for items you buy online on the spot.

    Reply
  • Yes! Retailers must evolve! I've been saying it for ages. However...what I find troubling about this kind of app (this concept isn't new- price comparison apps have been around for awhile) is that indeed, it does force retailers to compete on price. The problem is that all retailers are not created equal. Sometimes, not always, I'm willing to pay a little bit more for a retailer that serves me better, has more a knowledgeable staff, and builds a relationship with me as a valued customer.

    So the question becomes...how does a retailer that provides additional services but charges a bit more convey that via a price comparison app like PriceCheck? Or...can they?

    Frankly, while I'm happy to have price comparison options, I'd also like it if the app included reviews and ratings from customers in some fashion, allowing those retailers who serve more effectively to compete in other ways than just price.

    Reply
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