Last night at the Vilna Shul in Beacon Hill, High Start Group hosted a panel about mobile commerce. A broad topic – from consumer behavior around mobile as form factor for payment to more targeted advertising opportunities – panelists touched on some of the most exciting mobile commerce opportunities and ensuing retail transformations likely to take place. Nitzan Shaer of High Start Group moderated, and panelists included (from left to right in the photo):

The big theme from the panel was the broad implications mobile commerce presents: What will the future retail experience look like? Will consumers, with plastic cards engrained in their behavior, adopt mobile as their payment form factor of choice on a mass scale? Where does the check-in and apps fit into the equation – will retailers go-it-alone or leverage platforms like Foursquare?

Panelists all agreed that thanks to mobile’s ability to deliver hyper-targeted ads and perform functions like price comparisons, retailer margins will inevitably shrink. And continue to shrink. The panelists painted the picture of how this might play out in terms of what physical retailers will look like going forward, speaking to low-cost warehouses where consumers will walk around, phone in hand, navigating products they know will be at the lowest price. On the other end of the spectrum there will be high-end stores where the in-store experience is so high-quality that you pay a premium (think the Apple store model at a new level).

“Price comparison has been one of the first benefits of mobile commerce,” said Shaer, who shared the stat that 50 percent of smartphone owners who use price comparisons ended up purchasing the product online or at a neighboring store, and another third went directly to the store’s cashier demanding the price be matched.

Green dove into more consumer behavior data from Yankee Group’s surveys around the high fraction of smartphone owners responding in saying they have used their phone for price comparisons. Over the course of a five month period, she shared, the answer “yes” went up 8 points from 35 percent of smartphone owners to 43 percent. “You don’t see the needle move that quickly month-to-month when it comes to consumer tech adoption,” she added.

With regard to how the in-store experience will likely change, Farnham spoke to AisleBuyer’s experience with their beta customer Magic Beans. “People like engaging with the retail associate. They want to know if this is is the right car seat or stroller. Will people still engage a phone in substitution for that interaction?” he asked. “Yes and no. Some people like the idea of finding more information – like will it fit into my car – right online from their phone while shopping.”

Schneider then piped in on the employee side around how mobile can also be beneficial in teaching sales people how to answer question, or better yet, know the question (and thus have the answer) before even approaching the customer. “Mobile is empowering both the consumer and the cashiers and employees,” he said.

Grimes, with client Stop ‘N Shop, shared how mobile is transforming the grocery experience in terms of  engaging customers in a high-relevancy environment. “Customers want instant access to very relevant information, and when they want it — not a coupon for a product they just bought after checking out.”

Baker chimed in again, speaking to how businesses are already reluctant to have rewards programs because it reduces profit margins. And those with rewards programs do so because they make up for it in volume sales. “When everyone is pervasively couponing, for awhile you get more business, but that only works for awhile,” he said.

Grimes responded by explaining how the data that comes with mobile couponing means, for example, if someone buys Gatorade regularly they won’t be served a coupon targeting them and that purchase. But for someone who only buys Gatorade once every few times they visit Stop N Shop, a targeted coupon can incentivize them to make a purchase they might not necessarily make. He went on to state, “It is the brands that really want to reach the customers in this way, not necessarily the retailer.”

At this point, the conversation shifted to that of the checkin: will retailers want to deliver their own loyalty programs on their own apps and lock down their customer data, or will they leverage open platforms like Foursquare which provide data around what a customer is doing and purchasing at other locations?

Schneider was clear on his position: “Retailers should leverage the Foursquares of the world and not build their own … If retailers are building their own apps, then they should integrate with one of the platforms out there right now, probably Foursquare.”

Grimes held a different position: “I don’t think they should use Foursquare. It’s their customer, and it’s their data.” Baker added, “As a retailer, I want people to tap into my data, not the other way around.” To this Schneider responded, “That’s fine if you want your own silo of data, but not if you want to capture what customers are doing at other places.”

Green leveled the playing field a bit, sharing data from Yankee Group around security: “I get hives when I hear this capture thing. From the research we do on consumer behavior, there is a latent desire to be liberated …  The decline in presence of credit card networks in the future of mobile commerce is going to allow for another trusted source to keep me liberated to shop where I want and how I want.”

Panelists touched on NFC briefly (read more at this MIT Enterprise Forum recap) and more targeted advertising, and also spoke to the convergence of the loyalty card the phone. “The loyalty card is the phone,” said Grimes.

Schneider then spoke to an innovative mobile, social loyalty play by Tasty Delite. “You can hook up your social network to your account, and when you swipe your card, it will check you in and share it — and you get rewards for that. While it does turn social media in a way into a broadcast channel, it makes loyalty and check-in more natural because it’s passive.”

So what do these panelists believe the most prominent change in shopping will be five years out? A lighter wallet, the elimination of lines, and experiential stores not organized around the point-of-sale.

Thanks to Vilna Shul, High Start Group, and all the panelists for a great discussion. You can check out more reactions by following the Twitter hashtag #vilnashulmobile.

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