This is one of those ideas that you really have to think from both sides. On the consumer side I get this really cool App which I click "I wanna buy a foo" and Blam! every place that both sells and has a foo in stock is right there on the page. Awesomesauce!
Ok now look at it from the vendor side. I'm running my store, I need to make $2500 - $25,000 a day to make payroll. I carry a bunch of products, I don't make them, I just resell them. This kid is offering me a free inventory management service, that's really cool since inventory turns is one of the ways I manage my business, but they offer it to everyone. Now stocking X doesn't make a lot of sense if everyone stocks it, or I use the App to look for things stores around me don't stock and I add some of those, except they do the same thing. So now we're carrying the same stuff and we're in a race to the bottom in terms of margin. If I put my price on the item then the fact that there is a wall mart 2 miles left of here and sells it for 1/2 what I do will be painfully apparent. I'll get very little 'exploratory' business because people won't even come in to check on something if they know I don't have that one thing they are looking for even if I do have things that they ARE looking for but forgot they needed. Pass.
The 'big brand' stores almost all have a 'find it at a store near you' and there is probably a week of Node.js and UX work to create an App that goes out and wiggles all of those search boxes and simulates what you want. It can't tell you that Bobs Sporting Goods has an umbrella but if you're in your car and it can get you within a couple of miles you're probably ok with it.
So to pursue something like this you have to make it at least marginally useful for the people who sell stuff. And to understand them you have to 'walk a mile' in their shoes. That is the hard part, getting honest feedback about what they are going through.
That said, if you do spend the time to find their problems there are easily a dozen $100M ideas lurking in there to be solved.
Your comment points to the solution: that of increasing retailer specialization, and the need for local stores to focus on items that are not easily purchased through mail order.
The corner grocery in an urban neighborhood doesn't compete on price with the supermarket 10 blocks away. It competes on convenience.
I'm not saying the idea works, but there is more to it than just mapping all existing old school retail establishments into a search engine.
That brings up an interesting idea of dynamic pricing based on pain (distance). Sort of the anti-hipmunk model. The app could offer close retailers extra profit because they are the most convenient to the customer OR the customer can opt to pay less by walking more.
I wouldn't say that OpenTable is hated by all restaurants, but there is definitely a spectrum of loving it through hateful ranting...
Generally, I hear a few reasons why restaurants feel they can't leave OpenTable:
Myth #1: they won't be discovered through the web anymore. People actually discover restaurants via word of mouth or local search (Google usually). Great food, SEO, marketing, PR, guest care, etc. matter a lot more than being in one particular portal. See studies about restaurant discovery.
Myth #2: their guest information is locked into OpenTable. It isn't. You can export your guest database with phone numbers (if collected) and email (if they opt-in). While it may sound like they are missing something if they can't export email addresses (unless they opt-in), it isn't. They can't email those guests through OpenTable either.
Myth #3: guests care a lot about points. This is a smaller, sub-population of the restaurant going public. Most people don't care, they just want the ease of booking online when they want, which is generally 2/3rds of the time outside of the restaurant's hours (see poll by OpenTable).
Generally, those people that use points a lot (or discounts) are not great customers either (see any study about Groupon discounting).
Why would you want to give your guest a discount to eat at another restaurant anyways?
Anyways, if you are interested in more restaurant reservation analysis feel free to check out my Quora account:
I think that there's two things that the restaurants hate -
1) It costs them money which eats into their already thin profit margin.
2) It makes it harder to build a relationship with the customers since the customer has to opt-in to giving their e-mail address to the restaurant which they're less likely to do compared to being asked for an e-mail address if you're making a booking directly with the restaurant. Having e-mail addresses for customers is clearly valuable for a restaurant for the purposes of marketing and using things like special offers to increase demand during slower periods of the week/month/year etc.
3) If/When opentable breaks, they've got no access to their reservations - a problem you don't have with a traditional paper reservation book. You probably do have chaos though, if you're a busy restaurant!
> Having e-mail addresses for customers is clearly valuable for a restaurant for the purposes of marketing and using things like special offers to increase demand during slower periods of the week/month/year etc.
And that's exactly why you have to opt-in. Imagine the size of your inbox (or spam folder) if every restaurant you've ever been to had your e-mail address.
I can only tell you my experiences which might or might not be relevant since restaurant culture in the UK and the US is quite different to begin with.
In the UK there isn't so much the mid range large chain restaurants outside of a couple of chains which largely cater to the office lunch-time crowd (such as Itsu or Nandos type places), the possible exceptions being Pizza Express, Cafe Rouge, Strada and Carluccios which are well positioned in both middle class residential areas and office areas for both the sit-down lunch crowd and the evening casual dinner crowd.
I would say that the mainstay of midrange dinning is almost certainly the upmarket pub or gastropub which are often independent or semi-independently managed (they might be affiliated with a larger brewery chain, but the chain doesn't dictate things like the food they serve), and they're the sort of places which would most like to keep in touch with their customers. The bulk of their customer base is almost certainly pretty local, and has already expressed a willingness to spend money their, and being local they're also easier to entice back in with special offers.
A fairly good example would be my local which was launching a new menu back in November of last year. To trial their menu they sent an offer out on their mailing list offering a free dinner (starter and main, not including drinks) from their new menu to anyone on the list who made a reservation during that week. While it clearly cost a not insignificant amount of money to run a promotion like that (probably equivalent to $50 per head were they charging menu prices) it also gained them practice in preparing their new menu, high quality feedback on the new menu, and a certain degree of loyalty towards the establishment as a whole. The later in particular is no mean feat for the area in which I live which is both affluent and quite foodie.
I can think of several local restaurants and several national chains that do. In fact I'll bet most national chains do. I actually get a nontrivial amount of value out of local places' mailings, especially around my birthday when I'm in free lunches, coffees and desserts for a few weeks. Some places do send low- (or no-) signal newsletters but it's easy to unsubscribe.
From what I recall about Open Table, what restauranteurs have said they hate most is the lock-in - once you're using Open Table it's very painful to stop since OT owns all the customer data. Plus there's the sunk cost of the OT hardware, including staff training etc.
From what I've heard, it's frequently a profit issue. Many restaurants are operating on very thin profit margins per-table, and having to give OpenTable a cut of an entire reservation makes it even worse.
I'd imagine most restaurants hate it because it eats in to their profits, but from a technological standpoint, the technology on the back-end is pretty dated and not very user-friendly.
I think in general people in this thread are missing an interesting facet of this solution. Suppose that the inventory system was also a POS system (which it'd probably have to be in reality), there's opportunity there for lots of analytics that a brick and mortar store just doesn't get. And, there's even the opportunity of integrating deals for loyal customers, etc, etc.
The company providing the service could also get access to shopping records of individuals at various brick and mortars--something that probably doesn't exist, which could lead to targeted advertising on receipts (which the shop owners could take a cut of, for instance). There's lots of ways that all parties involved could benefit without killing the small businesses.
The system behind the app should be both. When you think of yet another groupon, you jump a little to short IMHO. But if you add POS, inventory management and a unified sales / distribution channel and provide that to local stores and shops you'l get quite a product.
But can't I stop to think of pg's frightening ambitious start-up ideas here? The odds are certainly against you, but the rewards will be equal if manage to pull that one of.
POS systems are complex and need to have very low latency. On top of that, there are many different types of registers that can be used. On top of that, since you are dealing with the everyday transactions of a business, in order to ship your product you need to be damn sure it works as expected. This is going to lead to very long and expensive development times.
The investment for the stores that would likely be excited to be apart of this is too high for those stores. That software isn't free when they need to get new hardware to support all of the systems that need to integrated so that they can be apart of the search.
No one says that this has to be a GroupOn play. CVS (the drugstore) has a loyalty program in which they give money back (in coupons) for money you spend. That sort of thing is certainly possible, and probably works fairly well.
I think this downward spiral would not happen because of the location-based nature - or only if there are many stores in one area having the exact same products. If I need a product RIGHT NOW (why else would I fire up the app and look for it?) I will walk into the next store and pay perhaps up to 20% more than the average price. I remember the time when I often forgot my micro USB cable when going to Uni, so someday I walked into the (ridiculously expensive) tech store near Uni and bought another one. Had I bought it over the internet I might have paid only half or third of what I paid there. This is also the reason why expensive lemonade stands at points of interest do so well - they are just THERE.
This seems a lot like saying that my business should elect not to show up in Google search results just because we're not the #1 result (or that a product shouldn't be listed on Amazon if it's not the cheapest, etc.).
Pro: You get a free inventory system
Pro: You show up on local search results
Will some (maybe most) people go to Walmart instead? Sure, but those are people already using the app, which means that if you're not listed at all, you have absolutely zero chance of winning the business. Unless I'm missing something, this seems like a no-brainer for vendors.
Another way to look at this is: what if the business could use the inventory system for free, but opt out of showing up in the local listings. Are you saying that you think there's a vendor on this planet that would actually choose not to show up in the search results?
There's no such thing as a free inventory system. How will it integrate with their POS? Handle refunds, human error, and "shrinkage"? Unless you're delivering an end-to-end turnkey retail solution, an inventory tracker isn't worth much on its own.
It's an interesting core idea, but it needs to account for the path dependence of existing retailers and how ill-equipped they are to adopt something totally new.
Aren't most pos systems just a touch screen, sounds like the perfect app to deploy on a tablet.
Wastage you get through stock takes, which could be done with a camera (same tablet or a phone), cloud sync so no cradle needed
It could integrate with the latest cloud based accounting systems which their existing pos wouldn't be able to handle (referral $$$), and large companies who have a lot invested in their pos system could pay an employee to integrate it though the apis if they want the search traffic
The biggest problem would be integrating it with the cash tray that goes ding, which I think is desirable I think to stop costumers reaching over the counter and grabbing money while you aren't looking. I guess deploy it as a phone peripheral.
I just wonder if the idea itself has merit. I suppose neighborhoods would specialize more and there'd be less stores with identical stock.
The other opportunity would be advertising to those retailers by suppliers and taking a cut of sales for orders to suppliers, I think that could be where the real money is
Ok now look at it from the vendor side. I'm running my store, I need to make $2500 - $25,000 a day to make payroll. I carry a bunch of products, I don't make them, I just resell them. This kid is offering me a free inventory management service, that's really cool since inventory turns is one of the ways I manage my business, but they offer it to everyone. Now stocking X doesn't make a lot of sense if everyone stocks it, or I use the App to look for things stores around me don't stock and I add some of those, except they do the same thing. So now we're carrying the same stuff and we're in a race to the bottom in terms of margin. If I put my price on the item then the fact that there is a wall mart 2 miles left of here and sells it for 1/2 what I do will be painfully apparent. I'll get very little 'exploratory' business because people won't even come in to check on something if they know I don't have that one thing they are looking for even if I do have things that they ARE looking for but forgot they needed. Pass.
The 'big brand' stores almost all have a 'find it at a store near you' and there is probably a week of Node.js and UX work to create an App that goes out and wiggles all of those search boxes and simulates what you want. It can't tell you that Bobs Sporting Goods has an umbrella but if you're in your car and it can get you within a couple of miles you're probably ok with it.
So to pursue something like this you have to make it at least marginally useful for the people who sell stuff. And to understand them you have to 'walk a mile' in their shoes. That is the hard part, getting honest feedback about what they are going through.
That said, if you do spend the time to find their problems there are easily a dozen $100M ideas lurking in there to be solved.