Android’s First Enemies – Retailers?

Today I have seen a blog post (in Russian) by a former Ukraine citizen living in the US now. In the post he described how he bought the first ever Android-powered phone - T-Mobile G1 - for his wife.

She herself initially thought she did not really need such a complex toy as it seemed to be full of things she would never even need. But still the author of the post managed to persuade his wife that there were truly useful things among the applications already available for download - and for free.

The thing is that after buying the new G1 in a T-Mobile store, they continued shopping in the same mall for some clothes for their child and here was where some of the most useful applications for Android made their appearance on the newly-bought phone.

While his wife was choosing some things in the store, the post author downloaded a few applications and showed her two of them - ShopSavvy and Compare Everywhere. As you may know, both applications serve for smarter shopping. Both applications find the best prices for a product in online stores and nearby offline stores using the information from the product’s barcode that a user scans using the phone’s camera.

The wife of our hero quickly realized the true value of the applications and the phone that makes use of such applications possible and how the process of shopping will be very much changed for her in the future.

But that was not the end of the story as they both returned to the T-Mobile store in the same mall where they wanted to buy a car charger for the G1 but quickly realized that the same charger can be bought somewhere online for a price that was 3 times lower than that in T-Mobile. As a result many of the people buying the G1 phones along with the accessories at the time quickly removed the chargers from their carts and decided to make the purchase everywhere. Of course it is quite understandable how disappointed the personnel of the T-Mobile store were about so many customers choosing to go elsewhere to buy the product for a fair price.

This story got me thinking about how unhappy retailers will probably be about the smart shopping applications for Android-powered phones - unless they are those offering the majority of products at the lowest price. Of course for shop owners and personnel to start hate the phone and try to do something about it, Android-powered phones will need to gain a real traction and the usage must be enough to scare retailers.

But if many stores eventually start losing potential customers who choose a product and compare prices using their phones and move to nearby stores offering better prices or choosing to order online for a yet better price, the retailers will be sure to come up with some counter measures - like blocking certain data protocols maybe (though I have no idea how realistic it is).

But what I know for sure is that retailers will find it impossible in the majority of cases to compete with online retailers given their obvious lower overhead costs. Besides, applications like ShopSavvy (especially with Google’s help in promotion of the idea) can very well teach some people what online shopping is and what benefits it can offer even if they are hesitant about venturing online to buy something.

Right now I can already imagine people accustomed to traditional shopping going to various malls to compare the products they want to buy, making their decisions as usually but instead of paying and bringing the product home scanning the barcode for this product and looking where to buy it elsewhere (most probably online).

And while this could become an obvious threat to retailers, this could very well add further momentum to online trade - once such applications are widely available on as many mobile software platforms as possible. I am pretty sure retailers should really start to worry about the future of their businesses but I am not sure if there is anything at all they could do about it.

Photo by kennymatic used under Creative Commons.