Could an innovative combination of two commodity technologies—barcodes and cell phones—provide companies a propriety advantage?
Samplesaint [1], Unilever [2], and Shoprite [3] are betting it will, and they intend to prove it next month when the companies roll out a trial coupon system in New Jersey. The twist is that consumers can request and receive coupons while they shop, using a cell phone. A customer could be standing at a grocery shelf and send a text message to obtain a coupon for a product he’s considering. If a coupon is available, the response is immediate. But instead of printing a conventional paper coupon, Samplesaint’s service sends it directly to the customer’s cell phone display, which can be scanned at the register. Software takes over from there, collecting the coupon information, and ensuring it won’t be redeemed more than once.
Web2.0 meets good old fashioned coupon clipping—without scissors and fileboxes! And while a ten-cents-off coupon Hellman’s Mayonnaise might seem bland, the technology that makes Samplesaint’s innovation go isn’t. The service came to fruition after a long evolution of the components, and it could change grocery shopping in ways we haven’t thought of. But before we jump into The Future, it’s worth reflecting on how barcode and mobile technology have impacted the task of buying groceries.
My typical grocery errand—just thirty years ago, circa 1979
Without anytime-anywhere communication, no one could contact me en route about updating my shopping list, or about making an unplanned stop at the dry cleaner. I couldn’t make my errand more productive by calling a business colleague from the car. And I couldn’t stand in the cereal aisle and chat with a friend about plans for Friday evening. Making a phone call meant walking outside the store to use a filthy wall-mounted pay phone. Sometimes there was a handset on the end of the vandal-proof cable—sometimes there wasn’t.
At checkout, I didn’t have a “Loyalty Card” to present. To the store, I was anonymous. A cashier read prices from “human-readable” stickers that were affixed to every manufactured item in the store. Then, she key-entered them into a cash register—the predecessor of the Point of Sale terminal. Even the decimal required a separate keystroke! Each price entry was accompanied by a “category” key so the retailer would know whether the purchased product was “grocery,” “deli,” or “produce.” This tedium continued for each of the sixty-or-so items I collected in my steel shopping cart. If the process sounds slow, laborious, and error-prone, it’s because it was. Little wonder that retailers suffered from low accounting accuracy, and cashiers were compelled to form unions. Wages increased and workers periodically went on strike, creating an impetus to develop the cost-saving technologies that ironically grew up to become self-service checkouts.
Contrast 1979’s experience to today. Technological and economic forces have pushed mobile communications and barcoding into ubiquity, and the changes have been transformational. In thirty years, our society and our world won’t allow us—as consumers or as businesspeople—to go back in time. Today, according to GS1 [4], an industry standards organization, over five billion bar codes are read daily, worldwide.
Clearly, lower hardware prices and increased capabilities have enabled the widespread adoption of automated data capture technologies (which include RFID and barcoding) in retail. When it comes to why innovations become commercially viable, “cheaper” and “more powerful” components are easy put on the list. But two other capabilities that play a role for Samplesaint might be less obvious:
1) Data Density. Ever-larger amounts of data can be packed into ever-smaller bar codes. Samplesaint has developed its offering to use GS1 Databar [5], a small-space barcode symbol that can track not only item numbers—similar to UPC codes—but variable data such as serial numbers, lot numbers and expiration dates. And all of it fits on the small screens used on most mobile devices. (Samplesaint’s New Jersey pilot uses a different symbology.)
2) Standards and interoperability. Samplesaint’s coupon system wouldn’t work without an integrated system of global standards that provides accurate identification and communication of supply chain information. In customer terms, such standards enable an apple to be picked, processed, labeled, packed, and shipped in New Zealand, and purchased in a Wawa store in Pennsylvania—with full traceability from the warehouses that stored it to the orchard that grew it.
The convergence of mobile connectivity, high data density, and global information standards has profound implications for the retail experience. For a retailer, could Samplesaint’s technology finally enable Point of Decision and Point of Purchase to occur at the same spot, right in front of the Lipton Tea display? If mobile devices and Samplesaint's service provide vendors access to consumers at the Point of Decision, what does it mean for customer experiences? Which new capabilities would marketers develop first? Could checkout lanes vanish altogether—as did price stickers and “label guns”? How would retailers re-purpose all that space?
Imagine the possibilities—and stay tuned!