Rethinking department stores with “proximity commerce”

Just read this thought provoking HBR interview with Ron Johnson, the new CEO of JC Penney (he came from Apple). Here is an idea :

Personally I never bought apparel online for several reasons (even if it is merchandized using scene7 and other features)

1.  I can’t feel the texture
2.  I dont know if it will fit me
3. Not sure how it looks on me.
4. Shopping in the store /mall is still fun for my wife and kids.

However there are several instances where I liked a particular style , but could not find the exact color in my size (and I usually settle for something else). In those situations, I wished there were innovative, location aware applications that could help me find the nearest store which might carry it. Even if it is a competitor’s store! – I know you are thinking why would anybody with a sane mind send a customer to a competitor? – But several smart, successful businesses do that to help build loyalty, for example Apple store staff, (as Ron indicated in the above interview), or Progressive insurance (recall the ads?).

So, back to this unchartered territory of location aware commerce applications, which I call “proximity commerce” – yes, I just invented a new term!!  By proximity commerce I mean applications that show the user all the available items and deals within their proximity and enables m-commerce for them.   In this case, my smart phone could interrogate the nearest stores for the type of apparel I am looking for and present to me those results in my preferred view (ordered also by distance in addition to the usual parameters). It also shows the current promotions, along with the coupons. Recommendations would be personalized  based on my previous purchases, for example the sizes and styles.  For more applications of proximity commerce in other types of retail establishments see my post.

The first mover in this space would become the preferred mobile phone destination and hence gateway to the “mall” dollars.   It could also display location aware advertisements. These will be based on what the buyer is searching for, their past buying patterns, shown just in time when they are actually looking for it and where they are looking for it, resulting in higher rates of conversion. This could also be another revenue stream for this leader. So let us  hope JCP is the first to come up with such app.