Consumers Empowered?

A patent targeted by EFF’s patent busting project caught my eye. A company called NeoMedia claims:

the general concept of reading an “index” (e.g., UPC number1) off of what it calls a “data carrier” (e.g., consumer product) and crossreferencing that index in a database in order to find the necessary information to look up and connect to a remote computer (e.g., URL fetched out of a database which is then inserted into a web browser).

The November 15, 2006 edition of the EFF’s Effector email newsletter summarizes the patent:

NeoMedia claims to have invented the basic concept of any technology that could, say, scan a product on a supermarket shelf and then connect you to price-comparison website.

This technology has the potential to empower consumers and force prices to reflect real-time supply and demand. Think about scanning the bar code of a product at a retail store with your phone. The information is transmitted to a price-comparison site and the results display on your phone. Now you know instantly whether the price there at the retail store is the best price.

This technology has the power to put some real teeth into those lowest-price-guarantees. What if the price-comparison surveyed not only online retailers but also traditional retailers? So you could scan a product at Circuit City and find out it is available for $50 less at the Best Buy store one mile down the road?

A company called Scanbuy already provides a free service that allows consumers to enter a bar code into their cell phone and receive: best price, other online prices, product reviews, and information about the product. This service will probably only really catch on when it is easy to use, i.e., when the users cell phone scans the barcode instead of requiring the user to manually enter the number.

Will retailers honor their lowest-price-guarantee when a customer shows the retailer the price comparison results on their phone? Some guarantees do not apply to prices of online retailers, and some match only in-print advertisements from competitors. The cost of redeeming a lowest-price-guarantee has been described as a hassle cost. Can retailers afford to continue providing guarantees when the consumer’s search cost incurred in discovering a lower price is virtually eliminated? Will this technology be the death of low-price guarantees? Or will retailers just retreat to price matching only in-print advertisements from competitors? If they retreat will the guarantees loose their effectiveness (if they are effective in the first place)?

Price-guarantees aside, a service like Scanbuy, should offer the option to “buy it now” that lets the user purchase a product using their phone from the online retailer with the lowest price. E-commerce continues to expand. The ability to purchase products with your phone while standing in a retail store maybe the next step in the evolving way we purchase goods.

14 Replies to “Consumers Empowered?”

  1. Eric,

    Yes, Physical World Connection has the potential to be a very disruptive technology. Every physical object will/has a physical world hyperlink (RFID tag, barcode etc) and can be connected to the Net.

    Two companies that you mention, Scanbuy and NeoMedia appear to be two companies going in opposite directions.

    Tale of two physical world connectors

    Since I posted that story, NeoMedia’s COO left the company.

  2. Then Scott, would you please explain why your blog, which pretends to be a blog encompassing all aspects of mobile marketing, made no mention of Neomedia’s recent and huge partnership with News Corp? Or any of their major deals over the past year? Why, in fact, you tout scanbuy incessantly, but purposefully ignore any positive news that has anything to do with neomedia? Your bias is utterly transparent.

  3. Scott, your statement ” 4. Scott Shaffer – December 28, 2006

    Compensation is not an issue, and never has been

    Does not answer the question whether you have been compensated by ScanBuy. Please answer, “yes” or “no”.

  4. Scott-

    Would you also comment as to whether you have ever had any financial dispute with Neomedia, say for sending another company their way that you might feel deserves compensation but which they did not agree to? This has direct bearing on your objectivity regarding this company.

  5. Scott,

    There seems to be a slant to your blog. Are you aware that the FTC doesn’t like the paid bloggers? A snippet is below,

    The FTC’s recent staff opinion might cast the legality of paid blogging programs in the U.S. in a questionable light. Underscore Marketing’s president discusses what this opinion means for marketers.

    If you’re a marketer paying people to write favorable blog posts about your company or its products, now might be the time to start sweating bullets.

    Just curious

    Ninja 200

  6. Gee whiz Scott, I wonder if compensation is not an issue, why then was Nately Kogan introduced to Olivier Attia of ScanBuy back in Jan. to close on a $10Mil. JV round of financing? I’m sure there was a serious slice of the pie in it for the ole gipper, eh? But wait! Weren’t you also being paid a finders fee to bring MoBot to NEOM’s table at the very same time? Looks like a little conflict of interests there sport, huh? Also, who contacted Joel Levinson of ChangeWave to commence the sell off in NEOM on 10.06.06 without the expressed knowledge of Tobin Smith? I wonder just how significantly greater a number of shares in the $300K sign off package for the old Primate would have been realized if the deal went thru? Tobin Smith even acknowledged to a smal group in an elevator during the Money Show that he had no knowledge that ChangeWave was going to issue a sell directive that day.

  7. Scott,

    Your unauthorized NeoMedia sell not made myself look bad, but also the rest of the Changewave alliance/investor family, and caused shareholders to loose a significant portion of their portfolios.

    A real shame.


  8. It seems Houdini is in fact Tobin Smith.

    It also seems Scott Shaffer is an easily bought pumper that holds incresingly less and less credibility in the PWC space.

    Give it up Scott……and Tobin, dont run and hide your involvement in all of this shameful turn of events re Neomedia.

    Scanbuy is a one dimensional comparative shopping tech. Neomedia holds the key to the future of PWC. Lets all look closely at their patents and admit this fact.

    Disclosure: I do not hold any shares in NEOM

  9. WOW!!! Tobin if that is really you. Do you see the change of events to turn the company around and focus on the Qode platform?

    If you do, do you plan on bringing your investors back on board again?

    I would love for someone to end up with egg on their face when this is all said and done.

    You must admit, whether here or otherwise, that the development between NEOM and News Corp is a very big development in this area.

    This is huge to say the least!!!!!

  10. Many major companies are encouraging loyalty/rewards cards for their customers. Jewel in Chicago is experimenting with a Kiosk based system where if you request it you will get the special price and that price will be different from another person who may be a more “loyal customer.” That is the wave of the bigger companies – special individual pricing based on your purchasing history. Marketing to the buyer who does not have loyalty to your store or brand and is just looking for the lowest price is not conducive to long term success in the marketplace. Take a look at Dorothy Lane Markets – a leader in loyalty and rewards in the Grocery Industry (even though they are small). The made a strategic decision that is changing the way we will go to market as retailers – they stopped almost all advertising and their circular (in the grocery industry this is the bible) and have made significant gains in market share as they truly reward their loyal and best customers. They understand to spend money on their best customers and not on the casual customer.

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