Local retail: Know before you go
Last week, I was at the aptly named NRF Innovate 2011 conference in San Francisco. There has been an explosion of innovation in the digital space, especially in the social, mobile, and local arenas.
While it's exciting to see so much digital innovation and funding from the venture community, I'm disappointed with how many start-ups are leading with deep discounts as the core of their value proposition.
This is best epitomized by Groupon and its hundreds of “groupies” (copy-cat websites). Everyday, consumers are besieged by "half-off" deals from hundreds of group-buying sites including deals for Mums (Juice in the City), Adventurers (Groupenture), Golfers (Groupgolfer), and even a deal site for gluten-free products (no joke).
So while I applaud these companies’ efforts to attract customers to local stores, there has to be a better way than 'deal, deal, deal.' The good news is some plucky innovators are focusing on solving a tougher and more interesting problem, namely identifying local product availability.
According to Microsoft, 53% of searches on mobile devices have local intent and 70% of mobile consumers complete their search tasks within an hour (versus a week for PC users). High on the list of mobile searches are consumers looking to see if products are available nearby and now. It is easy to see if products are in stock on web sites, but surprisingly hard to see if products are in stock in stores. Why is this? Amazingly, at a store level, many retailers (large and small) have poor inventory knowledge.
However, retailers who’ve invested in their inventory systems, can differentiate themselves from their competitors by letting consumers know that a sought after product is available locally. Consumers who need a product now are more willing to pay regular retail prices, and are less price-sensitive than Groupon’s deal-shoppers.
Two companies that are focused on providing local inventory availability are Milo (bought by eBay last year) and Retailigence (privately held). Milo is a consumer facing website, and Retailigence powers other companies’ applications. I had lunch with Jeremy Geiger, Founder/CEO of Retailigence in San Francisco, and got a first hand explanation of the complexities of sourcing and aggregating local inventory data from thousands of stores.
The good news is that they've got a good start at this and their plan is to share their data with others, especially mobile apps (one example is Shoppo). While the data is raw, and “unknown” product availability is often the response, it’s bound to get better over time. For those of us who hate wasting time looking for elusive local products, a big time and gas saver lies ahead. And for retailers who are trying to run a profitable business, there’s no need to “deal” away profit margins, but rather, just provide helpful product availability information to attract customers to your stores.
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