IBM Arming The Retailer For In-Store, Mobile Shopping

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ibmThere's a battle raging in the aisles of your local big box retailer around "showrooming," where the consumer comes to see the product in-store but buys it online for cheaper. Though some disagree, this digital efficiency is forcing brick-and-mortar retailers to re-consider the value proposition they provide consumers in comparison to their ecommerce competition.

Today, IBM thinks it may have an answer to combat the phenomenon that is eating away at retailer revenues and has released a new product to guide the consumer on their "shopping journey." Positioned as an "augmented reality shopping app," it comes from the IBM R&D group. (See the release.)

Here's the idea: You go into a store with your favorite smartphone and then download the app - presumably there's some signage around telling you to do so. Then, you aim your phone's camera at the item and – poof! – you're privy to a host of options that includes data on the product such as ingredients, reviews and even rewards – think loyalty programs. It might not get more bottom-of-the-funnel in terms of the opportunity to reach the consumer. It's similar to targeting a user while they're looking at their online shopping cart except with this use case, it's a real cart.

IBM hopes that consumers can make more informed choices, marketers can reach their target audience in-store and brick-and-mortar retailers can get a boost with a differentiated shopping experience that helps the bottom line.

AdExchanger spoke to IBM VP of Marketing John Kennedy about the new product and industry trends.

How does this new shopping app relate to the purchase funnel in your estimation?

JOHN KENNEDY: It will add benefits at either end of the funnel. At the awareness level - to the extent that a shopper now is much more specific around what they're looking for, there's the opportunity to suggest a product that may or may not have been in their consideration set.

At the other end of the funnel, now the shopper will have the ability, when the shopper's criteria is very specific, to be much more precise and zero in on the set of products that meet their criteria.

Can you talk about how this marries online and offline? It would seem attribution capabilities are possible.

This app provides even clearer diagnostics into what's happening at the shelf. You can imagine the kinds of questions marketers would begin to ask: "To the extent that shoppers have an app like this, where are they spending their time? What are they scanning?" It will lead to marketers having much more information on where they'll allocate their investments, and then as well, better insight into how shoppers make their decisions, really, at the shelf.

Again, marketers have invested a lot of money getting people into stores, and then doing their best through promotion in the aisle and elsewhere to motivate them. This definitely will give better diagnostics on literally what happens at that "moment of truth" when they're making the decision at the store shelf.

Do you think of this as a way for retailers to prevent showrooming?

We absolutely believe that. What we're also learning is that consumers and shoppers are willing to share information where they see a benefit - and when the experience can become more personal.

As we know in our own lives, when we share information in the shopping experience, we develop a relationship that's going to create a degree of stickiness and loyalty between a shopper and a retailer. This will absolutely create some inertia in that showrooming phenomenon that you're talking about.

It creates a benefit for the retailer but also for the consumer. It feels more like a relationship, less like a marketing dynamic. And that's going to build loyalty for the store and a much more productive experience for the shopper.

How does this relate to IBM's Smarter Planet branding?

We have talked about smarter planet in terms of how greater instrumentation and interconnectivity, and as a result, intelligence. The ability to make more informed decisions by having more information is helping to transform companies and industries.

Now at an individual level, the shopper is able to take the full complement of information about products that they're looking for, and have the information they need to make the very best decision to help them on their shopping journey, help them on their personal journey, and in a way, enrich their life.

As a result of that, it leads to a new relationships between the shopper, retailer and the marketer.

By John Ebbert

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