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Smartphones dialling up new business for stores

Pam Stone browses a Future Shop app on her mobile phone outside the retailer's Granville Street location in downtown Vancouver.

RAFAL GERSZAK FOR THE GLOBE AND MAIL/rafal gerszak The Globe and Mail

The meteoric rise of smartphones and tablets is revolutionizing the way people shop, but it's also breathing new life into an unlikely place: the traditional bricks-and-mortar store.

For years, a growing number of shoppers have opted to do their buying on the Web rather than in the mall. But now, the digital and the physical retail worlds are intersecting as new devices – and the software available for them – are helping shoppers do everything from finding discounts to finding parking.

These devices represent a huge opportunity for merchants, who have been struggling to keep up with technological changes since consumers started to tap into their mobile phones for shopping information over the past year. While shoppers continue to do more of their browsing and buying online, enticing them into real stores would also give retailers a chance to push even more products, bolstering profits in both digital and real-life avenues.

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It's a testament to this brave new world of digitally-assisted shopping that one of the most important weapons in many customers' arsenals this holiday season is a smartphone app designed by a firm in Calgary.

For years, Poynt has been one of the most popular apps on almost every smartphone, giving users the ability to search for businesses, look up movie listings or even reserve tables at nearby restaurants. But this holiday season, the app maker has seen its users take advantage of their smartphones to supercharge their bricks-and-mortar shopping experience.

"They're not just looking up a store listing – they're calling the store, they're checking inventory, they're mapping directions to get there, and then they're setting their search location from that store to go to the next one," said Margaret Glover-Campbell, Poynt's vice-president of marketing. "We're definitely seeing more and more of that as people are starting to understand what their phones can do."

Pam Stone, a 31-year-old real estate broker in Vancouver, is one of a growing cohort of customers standing at the junction of digital and physical shopping. Ms. Stone recently used a Future Shop mobile app to hunt down and buy a video game. She said the process was painless because her package was ready for pickup at the store when she arrived.

"It was much faster this way," she said. "You know how the stores are these days. It's kind of overwhelming." When searching for the $69 game as a gift for her cousin, she was able to find out that there were six of them left at the store close by, where she headed soon after to fetch it. "It's the new thing," she said. "It's the new wave."

Future Shop and its sister chain Best Buy, both owned by Best Buy Co. Inc. were early adopters of mobile strategies, having launched iPhone apps more than a year ago and extending them to all mobile devices this month. Shoppers are able to browse their websites, find a store where a product is available, take advantage of special promotions and make the purchase on the spot.

The early signs point to momentum building for the retailer's mobile payments. On Cyber Monday – the big Nov. 28 e-shopping day because of the bargains offered – 11 per cent of shopper visits to were made on mobile devices, double the proportion of a year earlier, said Thierry Hay-Sabourin, director of commerce at Future Shop. What is more, 8 per cent of revenue on Cyber Monday was generated from mobile devices, up from 1.4 per cent the previous year, he said.

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"It's a good representation of the growth we're seeing from the mobile devices," he said. "We're seeing that trend continue in December." On Dec. 24 at 8 p.m., when the online retailer starts offering Boxing Day sales, the company expects a rush of mobile purchases.

Part of the appeal for consumers and retailers is access to the "endless aisle" of e-commerce. " Retailers can stock many times more product offerings online than they can cram into their stores. Electronics chain Future Shop, for instance, carries four times as many items on its website as in its stores, he said.

Other retailers, such as Loblaws, Tim Hortons and McDonald's, are starting to offer mobile payments, enabling their checkout scanners to process transactions with devices equipped with a "near-field communication" (NFC) chip. While NFC is expected to eventually be embedded more universally in cellphones – making mobile payments more common – café giant Starbucks Corp. hasn't waited for NFC technology to take off: It started allowing U.S. customers last January – and Canadian customers in November – to use a phone app as a mobile wallet.

Individual retailers aren't the only ones taking advantage of mobile devices. A number of malls, such as the Yorkdale Shopping Centre, have developed apps that let users not only navigate the stores, but even find a parking spot. The Yorkdale app quickly pinpoints where a user is in the mall, and can be used to find directions to other stores. In the U.S., startups such as FastMall have taken that idea one step further, launching an app that contains maps of more than 1,250 different malls.

The Yorkdale, FastMall and countless other shopping apps are also increasingly incorporating digital discount coupons into their services. Such coupons have been around for years, but with mobile devices, companies can tailor them to a user's precise location, making it far more likely that user will walk into a nearby store to cash in on the deal.

Indeed, the U.S. version of the Poynt app recently incorporated coupons into its app – something the company hopes to bring north of the border soon.

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About the Author
Retailing Reporter

Marina Strauss covers retailing for The Globe and Mail's Report on Business. She follows a wide range of topics in the sector, from the fallout of foreign retailers invading Canada to how a merchant such as the Swedish Ikea gets its mojo. She has probed the rise and fall (and revival efforts) of Loblaw Cos., Hudson's Bay and others. More

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