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[8 comments]

Retail TouchPoints: Taggle Brings Mobile Bids to Brick & Mortar Stores

March 11, 2009

By Amanda Ferrante

Through a special arrangement, presented here for discussion is an excerpt of a current article from the Retail TouchPoints website.

Taggle is a new concept designed to allow consumers in a brick-and-mortar retail store to bid on items in a no-hassle way via the mobile device. While designed to work optimally for the iPhone and iPod touch, Taggle can also work for owners of other phones via SMS messaging. In September 2008, the Consumer Electronic Association selected Taggle as one of 15 finalists worldwide as one of the most innovative applications of 2008.

"Haggling is a reality of the retail environment," said Michael Brophy, vice president of product strategy for Sysgain Inc., the developer of Taggle. Mr. Brophy introduced an "elastic pricing" concept, which, he said, will ultimately mitigate margin loss. The retailer with Taggle controls the entire promotion, messaging, what SKUs are available, description image, quantity the store is willing to sell and at what price. Mr. Brophy said the Taggle application is not limited to the elastic pricing scheme, and can be extended to support a feature similar to eBay's "Buy it Now" feature, so consumers can purchase on the spot at a designated price.

Without integrating with a POS system, data warehouse, UPC databases, etc., the core offering for Taggle is the piece that sits in the store. Sysgain brings in a wireless infrastructure, or can override the store's existing one, depending on the type of existing wireless technology. An installed VPN appliance allows secure connectivity back to the Taggle data center where bids are evaluated and sent back to consumers. A back office workstation within the store is necessary for nightly reporting and to create and maintain marketing messaging. Sysgain provides in store signage consistent with each retailers' style and guidelines.

In November 2007, Sysgain conducted a consumer survey with input from over 2,100 consumers. Those that did haggle had an average 70 percent success rate at saving $50 or more. Nearly 40 percent felt so uncomfortable about the idea of haggling that they never even tried. Sysgain recently finished taking applications from pilot retailers to develop a user base and generate buzz. "Retailers know people are using their phones in the store for purposes that are working against the retailer's objectives," said Mr. Brophy. "A lot of people are price shopping other retailers... let's try to influence their behavior by giving them a network to join once they're in the store so you can deliver your messaging."

Discussion Questions: What do you think of the potential for Taggle or other devices promising to bring eBay-like bidding to the brick & mortar level? In what different ways could the application be utilized? What hurdles do you see in the technology's adoption?

Discussion Questions



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Comments:

Just like with purchases for cars, which have been transformed through increased transparency, other retailing types will be as well. It's now easy to shop competitors without leaving a store (or without going to a store in the first place) and merchants in competitive markets will see this as a way to avoid lost sales, albeit at the cost of lost margin.

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Phil Rubin, CEO, rDialogue

This is fascinating. I love the seamlessness between digital space and bricks/mortar space.

Could it transform ordinary retail experiences? Probably not in the short run. It would probably work best for higher ticket items. It could also become a mechanism for retailers to unload excess inventory; which could be useful if the recession deepens.

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Liz Crawford, President, Crawford Consulting

Terrible idea. The vast majority of shoppers want their trips to be as easy and efficient as possible. This adds a degree of complexity and tension that will be very unpleasant for the shopper. Mark my words on this one: it will never succeed.

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Peter Fader, Professor of Marketing, The Wharton School of the Univ. of Pennsylvania

Who has time to stand around a store waiting to see if they have the high bid on an item? What sounds good in theory seems like a bad idea in reality.

Even if they move to an all "buy it now" format, will consumers stand around and wait for items to pop into their mobile phones?

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Max Goldberg, Founding Partner, The Radical Clarity Group

I'd never heard of Taggle, so I checked out their website and a few articles. But I'm not convinced. If consumers want to bid on something, do it from the internet. If they want an item without hassles, buy it in the store. I don't see consumers wanting this, and I doubt retailers want it either.

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David Dorf, Sr. Director of Technology Strategy, Oracle Retail

Bad Idea. Sounds complicated and confusing for the customer. No real value add for the retailer as far as I can see, but many negatives including customer service issues and degradation of trust in your pricing strategy. From what I can tell, it turns your bricks store into a Turkish bazaar.

Mark Patten, Consultant, Retail Matters

While the idea intrigues, haggling over the price of more expensive items is going to undermine the trust the shopper places in a retailer.

Thinking about cars, appliances, electronics, etc. where lower prices are nice, there are issues of service and warranty in the purchase decision. For fashion and furnishings, purchase involves choice, colors, selection--not on-the-spot the decisions.

And with the previous writers, Taggle sounds like work for our regular purchases, where we value our time and convenience as part of the transaction. Sorry, I just don't get this one as the way ahead.

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Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

My initial reaction after reading the articles is that this is a terrible idea. I can't imagine wanting to 'bid' in a store environment. However, I think this technology will appeal to the current teen and twenty-something techno-savvy population which tries every application offered on Facebook and on their iPods.

I would be concerned as a retailer to be an early adopter, but it could be something interesting to pilot in an environment like Best Buy (technology is already assumed in the experience) or Urban Outfitters (concentration of 'cool' young shoppers). Taggle should offer to install the technology with a high-profile retailer in a few doors as a pilot--at no or low cost--and test the waters.

The message: don't be too quick to judge a new technology innovation, but be prudent in how it is tested.

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Mike Osorio, Global VP Learning & Development, Chief Learning Officer, DFS Group

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