Smartphones Are Transforming Retail Not With Technology But With Messy Humanity

Brian S Hall / November 5th, 2013

I believe a profound transformation in retail is now underway, one set to equal the changes in buying and selling formed during the modern industrial age. Only, it’s not what you think.

It started with Apple, which launched the smartphone wars. With smartphone in hand, we can now assess competitor price, global availability, level of service, and overall quality of any product anywhere on the globe, even while browsing inside a small store on the very edge of the farthest reaches of our planet.

For today’s retailers, it gets worse.

Amazon has constructed a platform that enables it to sell virtually any item at a lesser price than any competitor anywhere, with all necessary adjustments on price and availability made in real-time.

With Google, we can know everything around us and can locate exactly what we want, whether down the street or on another continent. There are no boundaries, no safe places.

With social media, we are always in contact with family, friends, followers and all manner of experts. Meaning, we need never pay more than the absolute best price available. We never need to choose the wrong product for our unique needs — nor be persuaded by crafty or misleading sales entreaties.

Thanks to smartphone payments apps we have our requisite coupons and loyalty points always at the ready. We can also now instantly send (digital) cash to another person’s mobile device, bypassing all manner of legal and non-legal intermediaries.

Retail — the entire shopping, buying, paying, servicing, researching, promoting ecosystem — is being de-constructed by smartphones, social media, location data and the cloud, with power flowing outward to every potential buyer.

This is only the beginning.

Values equal profits.

The more profound change, and one that industry analysts seem utterly blind to, is that the very same technologies which enable shoppers to receive the best price, the best service, the best value, will similarly guarantee that their money itself generates maximum impact.

For every $100 you spend, would you prefer that most of it, if possible, stayed within your community? If you could choose between having your next $100 go to retailers that support your child’s school, your neighborhood, your political and social views versus to a faceless corporation of undetermined origin and values, would you? I suspect the answer is a resounding yes and I believe our technologies are rapidly leading us toward this new reality.

When able to easily determine and demand the very best price and the very best product, what comes next is to make sure we spend our (limited) dollars in a manner that fosters and extends our political, social and community goals to optimum levels. Retailers will have to adjust to this new world. Their new reality is thus:

Values equal profits.

We can now get anything, anytime, anywhere and at the very best price available. How then to choose? Simple. We choose Brand X and Retailer Y because the product’s origin, its composition, the people who make it, those who sell it, those who service it, all support a world and a future that most closely aligns with our own.

Seen in this light, smartphones and the mobile web are not merely upending retail and relationships, fostering new services and business models, they are transforming the very notion of retail. No longer will it be about profits first. Rather, values first, then profits.

We can already see the beginnings of this change, of course. Fair trade coffee, handmade crafts, and restaurants that emphasize “local” as much as the food itself. These are merely brief flashes of what’s to come. I predict that within a decade, maybe less, values will be a primary driver behind most consumer sales in the developed world.

Note: I do not mean “values” as practiced in the traditional (20th century) marketing sense. Apple, for example, does a masterful job promoting their values — aspiration, liberation, creation. These are, however, feel-good values designed to please everyone. This will no longer be sufficient. In a world when we can easily find equivalents and get them at the absolute best price, values will become the prime differentiator. No doubt, the values of some retailers will be highly offensive to many. This will not slow this new reality down.

Indeed, with so much information readily available, it may soon no longer even be  possible to make a purchase decision without knowing the values of a product or the political leanings of its sellers. With instant price comparisons, location-aware search, real-time data streams, constant connectivity to friends, family, followers, spiritual advisors, political leaders and product experts, the act of purchasing based on values becomes not just possible but commonplace, probably even expected. In the near future, you don’t merely check in to a place to tell your friends where you are, you check in to make a declaration of who you are — and you can do so with every purchase.

Retail will become less about profit and more about a larger social purpose. To promote particular religious or social views, gun rights, a greener planet, transgender equality, Christian fundamentalist practices, polygamy, animal welfare; the options are as expansive as humanity itself.

Yes, it can get messy. It will get messy. Humanity is messy. Despite such messiness, I believe this trend is inevitable — and ultimately far more liberating. I also expect this new reality, in fits and starts, to be absolutely embraced. Very soon we will have a difficult time comprehending 20th century retail.

We have spent our whole lives focused on price, quality and convenience. We won that war. Anything, anywhere, at anytime and at the best price is now the base level expectation. Deeply personal, values-based shopping comes next, enabled, ironically so, by mass market computing technologies and globe-spanning social media platforms.

We are only now entering a era where we can search and find shops that match our values for whatever we want. We are only now able to instantly declare our purchases to all our friends and followers, telling them and the entire world in semi-permanent digital ink who we are and what we believe in with the very money we spend.

Values will drive sales. Values will drive profits. Values cannot be matched by Amazon, Google or any global conglomerate.

Image courtesy of The Guardian 

Brian S Hall

Brian S Hall writes about mobile devices, crowdsourced entertainment, and the integration of cars and computers. His work has been published with Macworld, CNBC, Wall Street Journal, ReadWrite and numerous others. Multiple columns have been cited as "must reads" by AllThingsD and Re/Code and he has been blacklisted by some of the top editors in the industry. Brian has been a guest on several radio programs and podcasts.
  • Wow! You are either a genius prognosticator or spinning a nonsense theory from straw.
    Only time will tell.

    Some supporting data: real incomes in the USA have doubled every 50 years since 1900. If everyone is richer, then price matters less in the overall purchase decision.

    • Well, for now, let’s just go with that first one.

  • aardman

    If social purpose in retail is really so important, then explain Walmart. 🙂

    • Rene Stein

      Social purpose in purchasing only comes to those who can afford it. People who shop at Walmart cannot.

      • aardman

        And that is why I think the rise of values driven retailing, as described in the article, is being grossly overestimated. Especially if the bifurcation of the US economy (into a very, very wealthy few and teeming masses facing declining incomes) continues at pace.

  • Viking

    Product, place, price and promotion will continue to dominate how products are marketed and sold; I don’t see ‘values’ becoming the 5th ‘P’. Traditional retail is being blown up; the result is not a move to ‘values’ based buying but perhaps just the opposite (look at the growth of Walmart and Amazon). People want best product, fast delivery, cheapest price and a brand they like; always have and always will. There is a subset of the population that will sacrifice (i.e. usually pay more) to make a ‘values’ based purchase but this is a small segment of the population (and will likely remain small in the future).

    • I believe those will be a given. We can get the best product, at the cheapest price, and with the fastest delivery. Amazon, alone, makes that possible. What then for *every other* retailer on the planet? I think values becomes a core function of their business.

      • I can go to Walmart or any physical retailer and leave with the product in hand or wait 2 to 7 days for Amazon to deliver it. That defeats your fastest delivery argument.

        And China’s economy seems to defeat the rest of your argument. Either that or everyone with values is going to have too look real hard to find a replacement for their Chinese manufactured smartphone to implement your argument. I mean if it’s in your value system to support people living under communist rule then by all means keep shopping with your Chinese smartphone.

        And if you really believe the values argument maybe you ought to invest in MOTO X stock because being made in America it’s the only phone that will sell to values orientated consumers – hence the huge upside to the stock value.

        Furthermore values is code word in Amazon’s home state for labeling anyone who doesn’t agree with the Democrat’s progressive agenda as an extremist. Ask our former governor about how effective that strategy is. Every sentence out of her mouth contained the words ‘our values’.

  • Rene Stein

    This type of thinking already is starting to permeate in cultures that can afford it. In Switzerland I have noticed a strong trend towards fair trade products (also amongst English people I know, but not as prolific). In fact, my friends in Switzerland will not buy Lindor chocolate because they do not purchase fair trade beans. Of course, Switzerland is a country where people can afford to pay more to get less in order to purchase within their value system. As much of the world tries to clamber up the long, steep hill to western decadence, personal values influencing purchases will make a much smaller impact on those purchases.

    • Great point. To start this will be a first world “problem”.

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