Will the iPad and Big Data Save Retail?

Thoughts on new tech and old businesses.

As I write this post, the holiday shopping season is in full swing. Retail is undergoing a massive transformation as we speak, what with constantly connected customers able to buy from Amazon while in traditional big-box retailers like Wal-Mart and Target. The process, called showrooming, represents a major challenge to brick-and-mortar retailers.

Count JCPenny among them. The storied retailer is trying to do the improbable: come back from the brink of death. New CEO and former Apple bigwig Ron Johnson is putting iPads in stores and trying to turn each “JCP” into a mini-mall of sorts. In other words, each JCP store will contain IZOD, Disney, Liz Claiborne, and other brand-specific stores.

Big Data: A Big Retail Opportunity

Will it work? If history is any guide, the answer is probably not. Department stores are well past their halcyon days of the 1950s. Johnson seems undeterred and appeared on 11/25 on CBS This Morning. For every company that has reversed its fortunes like Apple and IBM, hundreds or thousands more fade into extinction.

Now, I’ve never been CEO of a retail chain, but if I ever serve as one I’ll be sure to rely upon Big Data. As the holiday retail season unfolds, check the out the following statistics that IBM has culled from shoppers so far:

  • Online sales are up 20 percent for this same time period over Black Friday 2011.
  • The number of consumers using a mobile device to visit a retailer’s site is at 28 percent, up from 18.1 percent in 2011.
  • The number of consumers using their mobile device to make a purchase is 14.3 percent, up from 10.3 percent in 2011.
  • Shoppers using the iPad led to more retail purchases more often per visit than other mobile devices, with conversion rates reaching 4.2 percent, higher than all other mobile devices.
  • Shoppers referred from social networks like Facebook and Twitter generated 0.18 percent of all online sales on Black Friday.

No doubt that Johnson has seen such statistics. I honestly doubt that he’s putting iPads on tables just for  kicks. Rather, the data shows that tablets induce people to make purchasing decisions. Plus, I’d bet that millions of avid fantasy football fans are more likely to accompany their significant others on Sunday shopping excursions if they could watch games on TVs or iPads. Bottom line: When you get customers in the store, try to keep them in the store.

Simon Says

I’ve said this many times over the past few years: every company is becoming a tech company. Embracing technology, new gadgets, and Big Data won’t guarantee a thing. Ignoring them, however, will almost certainly expedite the demise of challenged businesses like JCP.

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I wrote this post as part of the IBM for Midsize Business program. It provides midsize businesses with the tools, expertise, and solutions they need to become engines of a smarter planet.

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