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Mobile Phones Become Essential Tool for Holiday Shopping
Published: December 17, 2009
The mobile phone is quickly becoming Santa’s biggest helper.


Powerful software applications for devices like the Apple iPhone are making it easy for bargain-hunting consumers to see if another retailer is offering a better deal on a big-screen HDTV or pair of shoes and to use it to haggle at the cash register.

Online retailers are revamping the mobile versions of their sites so consumers can make purchases without tedious typing. And offline retailers, battling for every last dollar, are sending cellphone users electronic coupons to lure them away from competitors.

One in five shoppers said they intended to use their cellphones to shop this holiday season, according to an annual survey by Deloitte, the accounting and consulting firm. Of those, 45 percent said they would use their phone to research prices, 32 percent said they would use it to find coupons or read reviews and 25 percent said they would make purchases from their phones.

“We are at the cusp of this technology really driving a lot of activity during the shopping season,” said Stacy Janiak, United States retail practice leader at Deloitte. “It is both an opportunity and a challenge for a retailer, because you can have a consumer who can cross-shop your store with other bricks-and-mortar stores or online, all from the convenience of your aisle.”

Heather Reed, a mother in Cypress, Tex., is one of those mobile power-shoppers. She uses several apps on her Samsung Moment phone to whittle down her spending. She was recently considering a $29.99 Hot Wheels video game for her son at Wal-Mart. With a quick scan of the bar code, an application called ShopSavvy found it at Target, just across the freeway, for $19.99. Another app from MyCoupons.com provided a Target coupon that sliced off $10 more.

“It went from $29.99 to $9.99, all in five minutes, no searching the Internet or spending hours trying to find a deal or a coupon,” she said. “It’s all right there in your hand.”

Of course, mobile shopping technology is still somewhat clunky, between erratic Internet connections, outdated pricing data and balky product scanners.

But smarter phones and a heightened bargain-consciousness among consumers are spurring a level of innovation in e-commerce last seen during the height of the dot-com boom a decade ago.

In addition to ShopSavvy, mobile apps from RedLaser, TheFind, ShopStyle and PriceGrabber.com allow customers to compare prices across a range of retailers. Retrevo, an electronics review site, has a service called RetrevoQ that lets users send a text or Twitter message with the name of the product they are considering and get an immediate response with a recommendation of whether to buy it and a range of online prices.

While searching for prices is easy, buying from the screen of a cellphone is more difficult. It generally involves clicking to the retailer’s Web site, which is often not customized for a mobile phone’s tiny screen, and then entering shipping and billing information using the tiny keyboard.

To fix that, some retailers are building sites and applications specifically for cellphones. The iPhone app for the Tommy Hilfiger online store, for instance, shows select products based on what shoppers are looking for so they do not have to scroll through pages of clothes. Those who are registered on the Web site need only enter their e-mail address and password to check out.

“Retailers need to realize that if you give people a way to make it easy, people will shop on their phones,” said Kelly O’Neill, product marketing director for ATG, which provides e-commerce technology to retailers and built Tommy Hilfiger’s app.

EBay’s iPhone app sends people notifications if they are outbid in an auction and lets people check out with just a few clicks if they have a PayPal account. Mobile shoppers will spend $500 million on eBay this year, the company said.

By improving ease of use, savvy online retailers are snatching sales from bricks-and-mortar ones. Matthew Tractenberg, for example, was recently shopping in a Silicon Valley bookstore, where he picked out five books for a total of $80. Before taking them to the counter, he typed the titles into the Amazon app on his BlackBerry Curve. Amazon had the books for $50 and would not charge sales tax or shipping. He placed the order on the spot and left his small pile of books in the store.

“It’s almost easier than doing it on a computer,” Mr. Tractenberg said.

Offline retailers are feeling the pain. Armed with competitive price information, shoppers are haggling as never before.

Although most stores refuse to match prices, especially from Web retailers, it is difficult to simply allow a customer brandishing a lower price to walk out the door.

Best Buy, for example, officially says it will not match prices of online electronics retailers and will match offline prices only if the customer brings in an ad or receipt. But several ShopSavvy users report having luck getting individual stores to match prices they find using the app.

Pacific Sunwear, a clothing and accessories retailer, said it would match lower prices found in stores or online. According to Chad Petrillo, a clerk at the chain’s San Francisco store, more people have been showing him competing prices on their phones, most often for shoes. The store will honor them after calling the other store to verify the price, he said.

For most shoppers, price is only one factor, to be weighed against the time it takes to drive to another store or wait for a Web site to ship an item. That could be a boon for offline stores, according to Ron Levi, vice president of products at TheFind, a shopping comparison Web site. “Your proximity to that retailer gives them an advantage,” he said. “It’s theirs to lose.”

Michael Robison, a Coast Guard petty officer from Guernewood Park, Calif., routinely uses ShopSavvy to check prices, but that doesn’t mean he always goes with the lowest one. He just bought a Victorinox laptop case for $45 at Macy’s, even though it was $30 at eBags. For that amount of money, “I would much rather walk out with it than wait,” he said.

Another problem with the mobile apps is accuracy. When Mr. Robison scanned a Nintendo hand-held gaming device at Radio Shack recently, ShopSavvy told him he could get it for $110 online instead of paying $170 at the store. When he got home, he discovered that online bargain was for a used machine.

Aware of the power of mobile phones, some offline retailers are using the technology to fight back.

If someone standing in one store scans a product with ShopSavvy, for example, a retailer down the street could deliver the shopper a coupon for the same item. A major retailer is already doing that in a few test cities, including Seattle, said Alexander Muse, co-founder of Big in Japan, the start-up that created ShopSavvy.

Other applications, including Yowza, use the GPS location information in cellphones to send shoppers coupons for stores within walking distance of where they’re standing.

“This empowers consumers to make a smart decision,” Mr. Muse said. “Already, retailers are starting to figure out, ‘I need to be in this game.’ ”

A version of this article appeared in print on December 18, 2009, on page B1 of the New York edition.

http://www.nytimes.com/2009/12/18/technology/18mobile.html?_r=1