The Power of the Mobile Barcode Scan

by Chuck Martin on March 10, 2011

Walking through Sears recently I happened to come across a couple looking at a Kitchen Aid mixer, with the price of $199 prominently posted. The man pulled out his smartphone, read the barcode and told his partner “it’s cheaper at Best Buy. Let’s go.” And they left Sears, presumably headed to Best Buy.

Out of curiosity, I loaded one of my trusty barcode reader apps (in this case, ShopSavvy) and checked the price. Sure enough, it was available at Best Buy for $179, a $20 saving, or 10 percent.

Now that may not seem like such a big deal, with a brand the size of Sears, which has about 2,500 stores in the United States and Canada.

But if you consider the magnitude of the power of people armed with smartphones and barcode readers, the impact can be profound.

For example, if only one person a day did what the couple I watched today, that is, scan a $200 item and leave the store to purchase it elsewhere, the overall gross revenue loss to Sears would be that $200. Seemingly no big deal.

However, if that occurred once a day in each of Sears’ roughly 2,500 stores in the United States and Canada, that would be a loss of $500,000. Again, not significant compared to the overall Sears Holdings Corp. revenue of $44 billion.

But if one person a day did this in each of the 3,921 total stores of Sears Holdings, which include Sears and Kmart, that would add up to $784,200.

If this happened each day of the 28 shopping days to Christmas, it would add up to $21,957,600. Again, $22 million is not a significant part of $44 billion.

So the impact of only one person per store using a smartphone to find a better deal elsewhere hypothetically could cost a very large retailer $22 million just during the holiday season.

If this occurred almost every day, say for 360 days, just by one smartphone-armed person per store, the impact would be about $282 million gross revenue lost, if my math is correct.

What if 10 people a day used their smartphone, read a barcode on a $200 product at each Sears and Kmart and found it elsewhere for less and left the store? The lack of that gross revenue annualized would be $2.8 billion.

And what if a person is scanning and price comparing more than one item? Will that shopper go back to the store that had the higher price?

The point is this will not be done by only one person per day. It will be done by thousands of people.

Mobile will forever change retail.

 

 

 

Chuck Martin is author of The Third Screen; Marketing to Your Customers in a World Gone Mobile, The Smartphone Handbook, CEO of Mobile Future Institute, Director of the Center for Media Research at MediaPost Communications and a highly sought-after mobile marketing speaker.

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