Smart Phones – Not So Smart for Retail


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Retail purchases were down on Black Friday.  I’m not surprised.  Retailers think that having an app where customers can purchase merchandise whenever, wherever with the push of a key, is cool. It might be cool, but encouraging customers to make purchases on their phone is not the wisest decision.

According to Justin Norwood, an IBM strategist, those customers who make purchases on their smart phones tend to purchase fewer multi-items compared to buying on their laptops, tablets or desktop computers. Anuj Nayar, a PayPal spokesperson said consumers are “snacking” on their mobile phones, meaning they are making smaller purchases or browsing in short bursts throughout the day, instead of placing larger orders at one time from their computers.

Overall, the retail industry is in big trouble. The smart phone is not the source of the problem; it’s that the retail industry has forgotten the adage, where’s the beef?  In this case, the beef is the human connection. In real estate, the most important consideration is and will always be ‘’location, location, location.” Successful retail businesses require repeat customers. In order to generate repeat business the key priority must be “relationship, relationship, relationship.”

Up until the 1970’s, most retail sales were rung at your neighborhood stores. There wasn’t a need to train associates about the importance of building relationships because store owners lived in the same town as their customers, kids went to the same schools and everyone saw each other at local events.  Then came the era of the large retail mall.  Many of the retailers did a good job of replicating the service at the neighborhood store by employing seasoned sales people who knew the merchandise and understood the importance of customer engagement. My mother worked at Bloomingdales in a large mall in New Jersey; she was a great salesperson and an even greater mom.

Then retailers thought the magic ingredient to become more profitable was to replace seasoned sales associates with kids who might have been trained to be helpful, but unfortunately lacked the maturity to create relationships. They also worked part time and only for short durations.

The Internet arrived in the 1990’s but ecommerce didn’t grab hold until the 2000’s.   Retail again made another strategic mistake. Instead of consolidating brick and mortar with ecommerce, separate departments manage each channel and frequently compete with each other.  It should be a consolidated effort with the main focus on the customer, no matter the channel.  The relationship ingredient is the pivot. In the ecommerce world, relationships cannot be substituted with Internet Spam.  Daily email promotions will not keep customers coming back.

Now we have smart phones; most likely managed by a third silo that is now competing with their own brick and mortar and ecommerce channels.

As we said before, smartphones are not the problem.  Retail has lost its mojo. Where’s the beef? The key to repeat business is relationship, relationship, relationship. Technology is cutting edge if it enhances the customer experience. Businesses must find a way to build a human connection, own the relationship with the customer and use technology to supplement and improve that connection.  Those companies that own the relationship will have control over pricing and distribution. Those that eliminate the relationship from retail will see their customer base dwindle and in turn, their profits.

By nature, I’m an optimist. I don’t like writing blogs that lack hope. But I feel it’s like the Emperor Who Had No Clothes. I think someone must suggest to the Emperor, in this case whose kingdom is retail, that three critical pieces are missing:  relationship, relationship, relationship.

What do you think?

Republished with author's permission from original post.

Richard Shapiro
Richard R. Shapiro is Founder and President of The Center For Client Retention (TCFCR) and a leading authority in the area of customer satisfaction and loyalty. For 28 years, Richard has spearheaded the research conducted with thousands of customers from Fortune 100 and 500 companies compiling the ingredients of customer loyalty and what drives repeat business. His first book was The Welcomer Edge: Unlocking the Secrets to Repeat Business and The Endangered Customer: 8 Steps to Guarantee Repeat Business was released February, 2016.


  1. Hi Richard: in my graduate program in IT, we began with a humble distillation of the role of IT: in order to create business value, IT strategy was considered subservient to the overall business strategy. This was in 2005, when IT projects regularly took on a life of their own, and became the goal – business objectives be damned!

    At the end of 2015, things haven’t improved much as far as ill-considered uses of IT. Everyone has a mobile phone, so, voila! – mobile commerce! That it coheres to a customer experience strategy appears to have been missed in the application design. There are many, many similar examples. “We do it because we can!” – I regularly see artifacts of this hubris.

    At the same time, I understand the financial appeal of creating new buying channels and exploiting technology to create new opportunities for people to buy things. People who have disposable income have idle time, during which they diddle on their mobile phones. Why not offer convenient buying opportunities?

    I sense that your observations come from evidence that retailers consider mobile purchases as “the new wave,” replacing older selling methods. That’s a common trap. Mostly, technologies coexist rather than replace.

    I don’t see that problem in the retail scenario you describe. People routinely make compulsive, perfunctory purchases. Offering a way to accomplish that on a mobile device opens new opportunities for revenue that might otherwise be lost.

    For retailers, the same back end supply chain and logistics support all retail channels. But I agree with your point that the front-end sales processes appear uncoordinated and disjointed to customers, because, absent an IT strategy that supports the business strategy, they are.

  2. Completely agree, especially when you say “Businesses must find a way to build a human connection, own the relationship with the customer and use technology to supplement and improve that connection. Those companies that own the relationship will have control over pricing and distribution. Those that eliminate the relationship from retail will see their customer base dwindle and in turn, their profits.” I’d add that, beyond the pivotal human connection in these vendor-customer relationships, retailers need to be more creative and innovative about building unique value in the experience. Showrooming, the practice of examining and comparing brands of merchandise in a traditional brick and mortar retail store or other offline setting, and then buying it online, has cut into the frequency of in-person visits . Online stores will often offer lower prices than their brick and mortar counterparts because they do not have the same overhead cost. How have many retailers endeavored to counter this? By lowering prices (rather than enhancing the experience), and failing to make shopping at their stores a destination experience, the sure and certain path to commoditization, and possibly doom (think Bradlees, Ames, Value City, Syms, Blockbuster, Today’s Man, CompUSA, Bombay, Levitz, Wickes, Rickel, Circuit City, Korvette’s, and many others).

  3. I think we have to separate the day to day buying from complaints. I do buy high value items on the net.

    Take the phone. In the good old days we had operators, and we got used to dialling ourselves. We have forgotten our neighbourhood taxis and become uberised

    I think companies will win by converting customers. they are already doing it.

    The problem is when there is a problem. Then what?

  4. Great post Richard – and one that resonates with my thinking in many ways. Plenty of CX commentators are talking about the importance of emotion in the Customer Experience today – as retailers have continued to transition more and more ‘online’, too much emotion has been eroded from the end to end customer journey. At the end of the day, ALL technology should be used to better enable an organisation to deliver the experience that customers need, want and expect. That does not mean that technology should replace traditional methods of interaction – such a face to face or telephone. Technology is not the answer to everything – it needs to be used carefully and appropriately.

    I increasingly find myself referring to an old mantra taught to me when working for GE many years ago – that mantra was FIND, WIN, KEEP – too many businesses are still focusing on finding and winning without spending anywhere near enough time on understanding how to KEEP customers. CX is a LONG TERM business strategy – there are no silver bullets!

  5. Andrew, I greatly appreciate your comments and insights. Thanks for adding your wisdom to the conversation. Richard

  6. Michael, thanks for your comment and reminder of all of the retailers that no longer exist because they lost the human connection along the way. Richard

  7. Ian, thanks for sharing the lesson you learned at GE about the importance of finding, winning and most of all keeping customers. Too many companies don’t care and are not focused on having proactive strategies in place to focus on customer retention. Richard


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