E-retailers should proceed with caution on trendy technologies
October 26, 2012 11:38 AM
Many consumers find it easy enough to get caught up in the hoopla surrounding the release of a new tablet PC from one of the major players. Retailers, too, experience something similar whenever a new strategy emerges, like storefronts on Facebook.
But, just as some new consumer products fail, so do new products and services for retailers. That is why retailers should temper their embrace of new products and services, especially ones that promise to disrupt standard operating procedures, says Sucharita Mulpuru Kodali, vice president and principal analyst at Forrester Research Inc., speaking this week in Chicago at Forrester Research Inc.’s conference for e-business professionals themed “Seizing Opportunity from Digital Disruption.”
“Facebook was to be the company that displaced Google as the customer acquisition tool,” Mulpuru Kodali says. “The reality turned out to be different than the expectation.” She says Google Inc.’s paid search services continually top an annual Forrester survey on top customer acquisition methods.
In recent years, many retailers flocked to Facebook as another sales channel, but this year some large retailers, like GameStop Corp., J.C. Penney Co. Inc. and Gap Inc., shuttered their Facebook e-commerce operations. GameStop is No. 55 in the 2012 Internet Retailer Top 500, J.C. Penney No. 20 and Gap No. 22.
Even Google, the titan that it is in search, has a plethora of failed products, such as social media service Google Buzz, and those that don’t match its search prominence, like its newer Google+ social network, she says. While many liken Google’s product announcements to a lion’s roar, Mulpuru Kodali says they often can be more of a yawn. “When we look at the conventional wisdom associated with Google, the perspective is every time it opens its mouth the world is destined to change,” she says. “The reality is different.”
Her advice for retailers is: don’t get embroiled in change for change’s sake. Consider which new technologies can raise revenue or lower costs, thus improving profits, she says. “Innovate for a purpose,” she says, “not a platform.”