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Is free consumer Wi-Fi a good thing?

By Retail Technology | Friday August 16 2013

The latest in our series of ‘Ask the Expert’ articles explores the potential impact of pervasive wireless communications in retail stores

So far, readers voting in the poll at the bottom of our homepage agree that consumer Wi-Fi is good. 

But Brian Hume, managing director of retail technology analyst, consulting and training firm Martec International, contends that many retailers are offering free consumer Wi-Fi instore more as an act of faith or because competitors are doing it, than because they know what to do to get competitive advantage. 

Speaking exclusively to Retail Technology magazine, Hume pointed out that many consumers already own a smartphone and use it to compare prices at the shelf edge while in a retailer’s store, using mobile data connections or free Wi-Fi.

Following consumer trends 

Recent research backs this up. Emarketer estimated in June that there will be 30.9 million smartphone users in the country this year, representing 48.4% of UK residents and 60.4% of UK mobile phone users. And Accenture Interactive late last year found 72% of consumers aged 20-40 in the US and UK use mobile devices while instore to compare prices, but the majority leave before making a purchase.

Many retailers fear showrooming. “Showrooming is where the consumer checks out a product in your store (fabric, size, fit, etc.) and then buys it for less from an online competitor,” Hume said. But he added that the jury is still out on its impact upon actual sales lost or saved.

Either way, the IT analyst argued that price matching is an inevitable consequence. “If you have electronic shelf edge labels (ESLs) you can react fast,” he commented. “Kiddicare started with ESLs when they opened their first store and have given themselves a fast reaction capability. 

“Retailers in Southern Europe have much larger deployments of ESLs than we do in the UK,” he continued. “Historically, it has been hard to make a business case for ESLs, but the ways in which pricing can be optimised in future are strengthening that justification in leaps and bounds.” 

Harnessing pricing agility 

For example, Hume suggested: “On Monday, the buyer concerned could examine the volume of price match requests, examine the competitors’ pricing, determine the nature of the issue and decide whether to implement a permanent markdown nationally, or do something regionally. Alternatively, they can restore the price to its former level. This type of capability will become a strategic priority for some.

“For those with a lower technology capability, they could just send an email to store managers alerting them to the situation and suggesting that they either agree to price match or perhaps put managers specials signs up. It all depends on the scale of the problem.”

Hume concluded: “Of course, it’s difficult to price compare own brands, which is one reason why John Lewis Partnership can be ‘never knowingly undersold’ and may have been a factor in them adopting free Wi-Fi early on. It’s likely that if price comparison becomes a problem, more retailers will expand their own brand offerings.”

The next issue of Retail Technology magazine will feature an extended, exclusive interview with Martec International’s Brian Hume about the impact of free consumer Wi-Fi in retail stores. Contact us to subscribe.

What do you think? Have your say by joining the discussion as part of the Retail Technology Group on LinkedIn.

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