How the mobile web and “augmented reality” changes retail forever

At South by southwest interactive this week (SXSW) a huge theme was “augmented reality” the idea of, Amazon-app style, pointing your phone at any product to get more information -or a better price- online. We’re getting to a world where holding a mobile device means all of the potential knowledge and intelligence of the cloud is now in your hand as well, everywhere you go. “The web” is no longer separate place or channel we go to visit at home through our computers. The web and the real world are rapidly converging. It’s now just up to us to design the apps, and interactions to make that useful.

What was clear is that brands have a long way to go yet to figure out what to do with or what retailing models will work in this new “augmented” reality. Consumers may beat the brands at the game using their devices and information advantage to arbitrage themselves consistently better deals.

To compete as a retailer, someone mentioned the idea that physical stores just become “really expensive websites” that help brands build relationship with consumers seamlessly across both physical and virtual channels.

This is a problem for retailing models like malls, which typically take a slice of retailer sales. Now the interests of retail merchants and their landlords may be mis-aligned as a consumer may go to the apple store just to see and touch the product, make use of the genius bar, but then spend their money on apple through the internet channel, or post-sale through itunes etc.

It’s another problem of misaligned interests for merchants if physical retailers are franchises that don’t have piece of the revenues from online sales.

Apple (no surprise) is a good example of a merchant that will do well do well in the hybrid cross-channel retailing environment.

Some other merchants that compete just on product and price without specific competitive advantages are going to get killed.