Chado-Design.com

As smartphones continue to gain popularity and more companies release branded applications to add value and increase brand awareness it is important that they fully research and understand exactly how the app will affect their brand. Blockbuster, in an attempt to stay competitive as Netflix and Redbox devour their market share, decided a new strategy that involves offering new services and products and releasing an innovative iPhone app could increase brand awareness and relevancy. Unfortunately, they did not realize the implications of their actions. The Wall Street Journal reported that their iPhone application would allow customers to check and see if a rental is in stock before going to the store. This sounds like a great idea; it takes advantage of new technology and adds value for the customer by saving them time. However, it seems that Blockbuster has overlooked the fact that the application ultimately gives their customers a reason to not come to their stores. If someone who still uses Blockbuster to rent movies goes into the store looking for a particular movie and if they discover it is not in stock they will typically pick out a different movie because they are already in the store. This situation is ideal because it gives Blockbuster two rental sales, the current rental and then another when the customer comes back in for the movie they originally wanted to watch. Their new strategy involving the new iPhone app will result in fewer sales because the customer will not step foot in the store until it is convenient and the movie they want to watch is available. Also, depending on availability, customers using this app can get tired of waiting for a particular movie to become available and now be more inclined to switch over to Blockbuster’s more convenient competitors. Hopefully their other strategies can help them weather the storm but I predict the new iPhone app will spell disaster for the struggling rental chain. Blockbuster’s current mobile application strategy is a good example of how brands need to a well thought strategy before adopting new technology.