Best Buy, RedLaser partner on mobile app strategy
Mar 27, 2013 (Pioneer Press - McClatchy-Tribune Information Services via COMTEX) --
It's an app, app, app, app world, and Best Buy is just trying to survive in it.
The Richfield-based consumer electronics retailer says it is expanding on its nascent efforts to work with software developers of the mobile "apps" that allow consumers to comparison-shop on their smartphones.
It sounds almost as though Best Buy is trying to help customers engage in "showrooming" -- when a shopper checks out a product in one store but then turns around and buys it for less from another retailer online.
But Best Buy doesn't see it that way.
The retail giant is quick to point out that it launched a policy earlier this month to match the prices of competitors, even those of online giants like Amazon.com or discount powerhouses like Walmart.
Instead of cutting its own throat, Best Buy says it is trying to secure a strong presence in places where consumers are shopping online, said Steve Bendt, head of BBY Open, the team that made the app development possible.
His team created the application programming interface, or API, that allows developers to hook into Best Buy's warehouse of data on all of its products, their prices and their availability down to the individual store level.
"This is not a defensive strategy. It's a proactive strategy," he said. "Best Buy has a history of trying to solve customer problems in unique ways ... Wherever people are looking for a consumer electronics product, Best Buy is at the forefront."
increasingly, many of those places are embedded in mobile shopping apps that have drawn millions of downloads.
Consumers spent six times as much time on retail apps this past December compared with 2011, according to Flurry, a mobile analytics company. Time spent on price-comparison apps grew by more than 250 percent in that same period, the company added.
Meanwhile, projections put U.S. online retail sales at $370 billion by 2017, up from $231 billion in 2013, according to Forrester Research,
a technology consultancy based in Cambridge, Mass.
RedLaser, which began its digital life as a simple bar-code scanning app for price comparisons, is one of Best Buy's strongest app partners. The San Jose startup, now owned by eBay, has since beefed up its app to include a deeper well of information on its retail partners.
If a shopper clicks on the Best Buy button in the app, he can not only look at the product's features and price but also find the nearest Best Buy store that has it in stock and then buy it without having to leave the RedLaser app and open up another one.
The buyer also can check inventory at the store nearest him and pick up his purchase the same day, often within minutes, Bendt said.
"It's really been pretty awesome," he said. The in-store pickup in particular, he said, has "revolutionized the business," with 40 percent of Best Buy's app shoppers hauling their online booty home rather than waiting for delivery.
Best Buy was one of the first merchants to open up its databases to RedLaser, eBay spokeswoman Amanda Coffee said.
The Best Buy feature RedLaser likes most is the in-store experience, in which a shopper gives RedLaser permission to track his smartphone.
The app, which has 26 million downloads, introduced Best Buy's in-store feature in October. The shopper gives the app tracking permission so it senses when he's inside a Best Buy. When the shopper turns on the app, information pops up on the phone announcing special deals in that store.
The in-store experience is still relatively novel. RedLaser also has that capability for Minneapolis-based Target and Walgreens, but in April, it plants to unveil 11 more "top retailers" that will let RedLaser put that capability in its app, Coffee said.
"It's another way for the retailer to engage with the consumer while he's in the store," she said. "It's about being a shopping companion."
Bendt won't reveal mobile app sales figures, saying only that they have "grown significantly year over year" since Best Buy gave him the green light to open up the data four years ago. Since then, the company has handed out more than 2,000 "keys" to its API to app developers, compared with 20 its first year.
Best Buy's moves make sense, said Stephen Baker, vice president of industry analysis for NPD Group, a consumer and retail market research firm.
"Things like this are going to become table stakes for most of the retailers out there," he said. "You want to get as much inventory in front of the customer as possible."
But Baker doesn't believe smartphone retailing will dominate, largely because the average smartphone screen is too small. Most of the app activity will occur on tablet computers, he said.
Baker dismissed concerns about aiding "showrooming" by cooperating with app developers.
"How is that different than saying 500 yards away there is a Walmart Retailers tend to cluster. You have to be where the customer goes," he said.
Leslie Brooks Suzukamo can be reached at 651-228-5475. Follow him at twitter.com/suzukamo.
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