Are virtual shops becoming the norm?

by david

It all started in Seoul, South Korea, in July 2011. Tesco (branded Home Plus in South Korea) sought a way to increase its market share without increasing the number of stores. This led to the idea of virtual stores. Products images were displayed in a subway station in Seoul, with QR codes allowing commuters to scan and add the items to a virtual shopping basket, checkout and pay. Products were then delivered when they got home. The concept won numerous marketing awards and drew a lot of attention within the retailer and marketing communities. So much so that Home Plus brought it into a reality on August 25^th, for a period of three months, in the arrivals hall of the Seonreung subway station, in Seoul. In the same week, Ocado, the UK online grocery retailer launched its own 'virtual shop window' for Apple iPhone users at London's One New Change shopping centre.

As an online retailer, about 15 per cent of Ocado transactions were taking place on a mobile at the time. Becoming the leading mobile retailer therefore seems the logical next step, which Ocado doesn’t hide: Jason Gissing, Ocado's co-founder, said: "We'll be looking at options around continuing this 'virtual window shopping' approach." Soon, other retailers joined the fray, and over the last couple of months not a week has gone by without a retailer or a brand announcing its own virtual shop: Oct 7: HSN HD, a US home shopping Television channel, used ’scan & shop’ QR Codes during its Innovation Weekend to test whether viewers would purchase items with their mobile phones. Oct 31: Procter & Gamble, one of the most innovative consumer goods manufacturer, set up virtual stores in four of the busiest subway stations in Prague, where busy consumers on their way to and from work could purchase essentials via their mobile phones. Nov 15: HMV (a UK retailer focused on music & movies) and Twentieth Century Fox, used QR codes printed on ads on the bus shelters, leading directly to a mobile app to purchase the DVDs advertised. Nov 28: John Lewis, a UK retailer, trialled QR codes with the launch of a virtual shop in Brighton (UK). Dec 1: eBay opened its ‘QR emporium’ on one of London’s high street. Dec 13 Argos, another UK retailer, opened its virtual shop in Waterloo and Paddington tube stations. Lasting trend or just a fad? Critics were quick to dismiss these initiatives as a stunt to increase awareness. So far, no numbers have been released; however these initiatives make sense. They are the answer to a lasting trend that will have profound consequences for our digital lives; and there is a wealth of statistics and research that corroborates this observation. To name but a few:

• By 2015, there will be more m-commerce than e-commerce (Gartner, 2011).
• Today, in the US 79% of smartphone owners use their smartphone to help with the shopping and 70% use their smartphone while in the store (Ipsos OTX 2011).
• 7 of 10 Consumers understand QR codes (MGH, 2011).

Love it or hate it, retail is going mobile. And it’s happening now.