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Beam to Redeem

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What if consumers could walk up to any retailer’s point of sale system and use their smartphones to receive coupon or loyalty card savings or redeem gift cards? A new app makes that possible with a “one size fits all” solution requiring no changes in existing retailer equipment or technology.

Many consumers think scanners can already “read” barcodes on smartphones but are disappointed at checkout. In today’s retail marketplace, almost anything that uses a barcode for savings or credit must be printed out and physically presented to be redeemed.

Technology company mobeam took a different route to enable smartphone barcode reading on any system. CEO Chris Sellers says the idea for the smartphone app began forming almost 10 years ago. “We recognized that a POS red laser scanner could not read a barcode off a phone screen because the light had to reflect off a barcode or coupon on the phone and then back to the sensor, common to all scanners,” he says. “So we thought, ‘Why not send a beam of light from the smartphone directly into the POS sensor?’”

Patented process
With the mobeam app, consumers save coupons, loyalty cards, gift cards and other promotions to their smartphones. Then, instead of pulling pieces of paper and cards from their wallets at checkout, their phones are scanned at the POS and send a light to the POS scanner. The barcodes are converted in this beam of light and the consumer receives savings or credit.

Light-based communications (LBC), mobeam’s patented process for converting barcodes into the light beamed to POS sensors, means that neither existing POS scanning equipment nor technology must be changed for retailers to accept the app.

According to Sellers, other companies have attempted to accomplish what mobeam has by using the POS scanner to scan the smartphone. Sending scanner light to the phone to be bounced back overwhelms the system, he says, so that barcodes are rarely recognizable or accepted.

Optical scanners are a possibility, but very few retailers have this technology — which requires significant investment for new systems. Both POS and back-end databases would have to be changed to use the optical scanner.

mobeam used a music video to introduce the new technology earlier this year at the Mobile World Congress. In March, Samsung announced that its new Galaxy S4 smartphone would come equipped with mobeam’s LBC technology so that traditional barcodes could be beamed. Samsung chose mobeam’s technology to allow Galaxy S4 smartphone users to participate in mobile commerce at millions of retail locations around the world, Sellers says.

The rise of digital coupons
Juniper Research projects that the number of coupons accessed and redeemed by mobile means will reach 10 billion this year — a one-year increase of more than 50 percent. Kantar Media reported that digital coupon events on major retailer websites increased 50 percent in 2012 over 2011. This is compared with retailer advertising expenditure increases of 4 percent and a 5 percent increase in retailer participation in freestanding insert coupon promos.

There were significant shifts in advertising and promotions among top retailers in mass merchandise, food, drug and other retail distribution channels, the Kantar report says. In the area of digital coupons, Walmart’s activity increased 190 percent, CVS’s increased 150 percent and Walgreen’s was up 77 percent. Retailers are using digital coupons to target customers in their homes to increase trips, transactions and profits for their stores, according to the report. In some cases, manufacturers and retailers are working together to align promotions and strengthen potential shopper draw.

mobeam’s first major manufacturing partner is one of the largest: In a statement, Procter & Gamble indicated its willingness to use the technology to better fit into the busy lives of its consumers. Coupons remain an important vehicle for product trials and savings on chosen brands; P&G believes that delivering “couponing on the go” for busy consumers with no additional cost for the retailer is a win-win proposition. mobeam is also in talks with other major manufacturers to form future partnerships.

A new form of advertising
Google AdWords, which would be one of mobeam’s closest competitors, charges companies in a “pay on acquisition” or “pay per view” model, Sellers says. By unlocking mobile communications between smartphones and POS scanners, mobeam creates a new form of advertising, migrating from a cost-per-thousand to a cost-per-use-and-redemption model — the ultimate goal of coupons, he says.

“Retailers and manufacturers will be able to release an advertisement to consumers and find out where the ad was accessed and where the coupon was redeemed,” Sellers says. “With 200 million handsets out there, that’s a critical mass.”

mobeam’s app has been tested “exhaustively across every scanner type,” according to Sellers. The company also tested for Samsung and conducted live market tests in stores for P&G. “There were no failures,” he says.

Many large CPG producers and retailers spend millions of dollars each year to gain a stronger relationship with consumers, and mobeam’s app can be an effective tool in this pursuit, Sellers says. Eventually, Sellers believes this new technology may help manufacturers and retailers fine-tune their advertising mix.

In the near future, mobeam will enable retailers to connect with customers in-store via their smartphones. “This will give consumers the ability to take action and get value through their handsets while shopping,” Sellers says.