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The Transparent (Shopping) Society

By - November 09, 2004

eyepyramidAs long as I’m on the topic of societal impacts of search, I wanted to sketch out a scenario for you all, in a similar vein to the one I did recently on the integration of search and television.

This scenario involves several elements already in place – search technologies, mobile phones, and the Universal Product Code system – and some more fanciful, but nevertheless feasible technological and business model innovations.

So let’s set this one in motion and see what happens. Imagine it’s the near future, and you’re in your local grocery store on a mission to pick up dinner for a Saturday night dinner party. Because you’re a Searchblog reader with oodles of disposable income to burn, it’s a Whole Foods store, the aisles dripping organic righteousness and whole grain goodness. You know that dinner for 8 is going to run you at least $200, not counting the wine, but that’s OK, compared to the tab at the local bistro, you’ll be coming out ahead. But you do want to make sure you’re not spending money you don’t have to, especially on the wine.

Now, Whole Foods has quite a wine selection, but the store ain’t known for its discount prices on anything, and when it comes to wine, you’ve always had a sneaking suspicion they’re really sticking it to you. But it’s a convenience buy, you’ve always thought, you’re willing to put up with it for the most part.

wineAs you slip your Naiman Ranch tri-tip into your basket and thank the butcher, you head to the wine aisle. What might go with that grilled tri tip? A nice cabernet, no doubt. Whole Foods’ wine aisle, a testament to hierarchy and peer pressure, places the most expensive bottles on the top, and the cheap juice on the bottom. No self-respecting Whole Foods shopper wants to be seen bending down to check out a bottle of wine. Then again, those bottles staring out at you from eye level are exactly the kind that you suspect Whole Foods marks up with the glee of a five star sommelier.

What to do? Not to worry, you’ve got Google Mobile Shop installed on your phone. You whip out your Treo 950, the one with the infrared UPC reader installed, and you wand it over that bottle of 2001 Clos Du Val now lovingly cradled in your arms. In less than a second a set of options is presented on the phone’s screen. It reads:

treo2001 Clos Du Val Merlot, Lot 21
Stags Leap District, Napa Valley

Average Retail Price: $38 (click here for more)
Price at your store: $52 (more on this)
Click here for a list of prices at nearby stores
Click here for stores selling similar items
Click here for reviews of 2001 Clos Du Val Merlot
Click here for more on this vendor (Ecological Impact, Vendor Labor Policies…etc.)

You’re pretty sure that Clos Du Val isn’t employing child laborers, and anyway you’re really only interested in price comparisons, and the first screen has confirmed your initial suspicion: Whole Foods is ripping you off.

You click on the “list of prices at nearby stores” and see that the liquor store up the street is selling the same bottle for $39. You click on that store’s link, and then choose the “reserve this item for same day pick up” option. With a satisfied smirk, you replace the bottle on its perch on the top shelf, and head over to compare prices and recipe tips for the $6 boxes of imported pasta. As you leave, the fellow who runs the store’s wine department eyes you warily, then picks up the phone to talk to his manager. “Herb?” he asks. “Did you get my message about banning cel phones in the store?”

Is this scenario possible? For it to happen, a few non-trivial things need to occur. First, the entire UPC system, which I must admit I do not fully grok, must be made open and available as a web service. Second, merchants must be compelled to make their inventory open and available to web services. Third, mobile device makers must install readers in their phones, essentially turning phones into magic gateways between the physical world and the virtual world of web-based information. And fourth, providers like Google must create applications that tie it all together.

I’ll leave the speculation as to whether steps 1 and 2 are possible to those who know better (Ross? VanGorilla?), but I am pretty sure #3 is already happening (right Rael or Russell?). And #4 is a no brainer – it’s square in Google and Yahoo’s mission.

The implications of search breaking out of the PC box and making real time information available at the point of purchase has been discussed in plenty of places, I am sure, and probably with far more prowess than this simple scenario. It has also been the failed business model of several Web 1.0 companies. But somehow, with recent developments in local and mobile search, it seems much, much closer to happening now.

What might be the effects of such a system coming to fruition? For one, markets would have to compete far more on service, convenience, ambiance, and other non-price related factors. And vendors of products that have been made in third world sweatshops, or with factories that overpollute, or that support causes some consumers do not wish to support, would be called out in a far more transparent fashion. Refusal to participate in such a system would mean that vendors or merchants have something to hide, and as such, the system could be a major force for good in the global economy – forcing transparency and accountability into a system that has habitually hidden the process of how products are made, transported, marketed, and sold from the consumer.

I for one very much hope such a system is just around the corner. What do you think?

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  • http://www.stapleton-gray.com Ross Stapleton-Gray

    A lot of the above issues are addressed in a white paper I was commissioned to write for CommerceNet. Anyone who’d be interested should shoot me an e-mail and I’ll let you know when it’s officially available.

    This is an area I’ve followed for a long, long time, even before the rash of “scan-a-bar-code, get-product-info” dot-coms (DigitalConvergence, Barpoint, IQorder, Airclic, etc.) that launched and crashed. But there are some good reasons to expect that things are more ready to knit themselves together as you’re describing.

    As a quick & dirty answer to your four points:

    First, there’re some winds of change blowing re product codes as unique identifiers… it’s all in the white paper.

    Second, retailers will open up their inventories if and when it’s advantageous to do so. Most will not want to; some doing so may put pressures on others to do so. NB, the scenario you describe is extremely hostile to any retailer who doesn’t compete on price… WholeFoods will lose lots of wine business to BevMo, in a Battelle-ified world.

    On your third point, it’s happening… the variations include bar code readers, use of phone cameras to scan and interpret both 2-D and 3-D bar codes, and RFID readers in phones. Of course, one could also just key in a UPC on any keypad. End-user devices has always been a sticking point, but it’s improving.

    Point #4 is the open frontier. Imagine that every retailer within driving distance of Berkeley were willing to make its inventory open as a set of code/price tuples, which, along with its geocoord, would be necessary and sufficient to make them shoppable (NB that this could apply even to brick & mortar stores w/o a Web site, so long as they had an inventory management system and some form of Net connection)… how would you spider/index/search such a virtual space? I could see a range of solutions, from retailer registries, to plain old Google spidering. Dulance just announced plans to make retailer offers accessible via RSS feed.

  • http://www.stapleton-gray.com Ross@stapleton-gray.com

    A couple of comments on your specific scenario…

    “Price at your store: $52″ probably isn’t obtainable (unless, of course, Whole Foods did open up its own inventory to query), but that’s ok… you have that price in front of you, either as a label on the bottle, or a price on the shelf.

    What your scenario doesn’t include, but should, is any context awareness of you… you might add, “This wine available at the BevMo you shop on San Pablo,” say, or even a recommendation, “Can you pick this up when you’re at the Safeway next, as you seem to be due?” It could also recognize your home inventory (“Don’t you have two bottles of this already??”), though I’m skeptical that home inventory via bar code or RFID will be all that effective… too easy to consume products without noting the consumption automatically.

    Banks have gone to providing your transaction history as downloadable spreadsheet grist (for a fee, for us, from Wells Fargo)… it’d be interesting to get a similar service from one’s retail stores, which could, say, register delivery data associated with a credit card, then pipe transactional records to the specified electronic address, in the requested format whenever that card is used. There could be some utility to the store in this, e.g., in establishing a communications channel for product recall alerts, though I suspect there are more reasons for stores to keep things opaque than for banks, where you’re more captive a customer.

  • pb

    Seems unlikely. The local liquor store is known neither for low prices nor sophisticated inventory control. And are Whole Foods’ wine prices really that high?

  • http://battellemedia.com John Battelle

    Some of the prices are, yeah…on the local liquor store, clearly the incentive to add the inventory would have to come from up the chain, not at the store level.

  • http://www.russellbeattie.com/notebook Russ

    I see no technical reason that you wouldn’t be able to scan a UPC, or in the very near future wirelessly read the RFID tag, and then do a database lookup using web services from your mobile phone. In fact, most of this would be possible to do today if someone put the pieces together. The question is simply will businesses put their inventory up online. I know that Nokia is already planning on having RFID readers on their phones… so part of this is already in the works.

    Personally, I don’t think mobile compa rision shopping is going to be nearly as big of a deal as simple mCommerce: While waiting for your oil change, you use your mobile to search through Amazon’s DVDs and buy your wife her favorite TV Show Box set for her birthday. Or while waiting in the doctor’s office, you finish off your Christmas shopping, etc.

    The key thought to what you’ve written though, is the fact that data-enabled mobiles are a real link from the virtual world to the real world and search may be the glue which holds it together. Up until now, you’ve been trapped at your desk, and forced to print stuff out before going off and interacting with the world. Now you can be out and about and as you need something, will be able to do a quick search and find the information that you need, when and where you need it.

    I had a coworker once who said that he uses the browser on his phone for one thing, and one thing only: settling bar bets with quick Google searches. That right there is a killer app if I ever heard of one. But I’ve personally done mobile searches to make sure I bought the right printer ink, so there’s lots of other examples out there.

    -Russ

  • Janet Martin

    Interesting discussion. Though there’s one point we ought to consider. If inventory is tracked, it’s possible that it the absolute LAST bottle of Clos Du Val available in the immediate area which would allow Whole Foods to potentially leverage the same search technology to raise the price on “hard to get” items. Especially with a keen understanding of the available supply. This technology could potentially help the retailer as well as the buyer.

  • http://www.stapleton-gray.com Ross@stapleton-gray.com

    Though if we kick down the sides of the box we’re in… what if “supply chain” were extended all the way down to your basement or garage, i.e., there was a seamless search from conventional retail, all the way out to eBay and its potentially more decentralized successors, so any bottle of Clos Du Val in the vicinity might be had, for a price…

    One thing we do know, there’s an awful lot of inefficiency in the distribution of physical goods, from product gathering dust on store shelves, to product gathering dust in your neighbor’s garage.

  • http://www.internetnews.com Kuch

    It sounds like a useful service and it seems technically feasible now. The barriers, I think, are social.

    Mobile price comparing was a big dream of MySimon, now owned by CNET. Not sure if they still have mobile access, but they were one of the first to provide mobile apps. The deal was, you’d go to the WAP version of their site and .. type in something, I think it was the UPC code. Then MySimon would show retailers and prices, just like you suggest.

    It was damned awkward and slow. But I think the big hang-up was the lack of Web-enabled phone users. Price comparing on the fly didn’t seem to be an incentive for people to buy or turn on mobile browsing. MySimon could pay for the service extension because it got a rev share from merchants. Google and Yahoo seem very inclined to offer free services with no especial source of revenue in sight, and, of course, they both offer their own price comparing services, which the system you propose could tie into.

    But I’m still not sure that enough people would pay extra for a UPC reader to make it feasible to manufacture them.

    PS: If you’re wondering about that awkward phraseology “price comparing,” the blog software wouldn’t let me use a word that contains the first name of a famous hotelier’s daughter!

  • http://dulance.com Sergei Burkov

    This John

  • Scott Shaffer

    To start with, the Brand owns the barcode (soon rfid tag) or any other associated unique identifier. That is key. There has to be an incentive for the Brand Manager to

  • http://dulance.com Sergei Burkov

    :-) ))))
    Changing gears from shopping to content filtering, I am still laughing out loud :-)
    When I first attempted to post my previous comment I was greeted with this message:
    “Your comment could not be submitted due to questionable content: p a r i s”

    Well, obviously P a r i s H i lt o n is now associated with questionable content. (Note that I can

  • http://www.stapleton-gray.com Ross@stapleton-gray.com


    > recently unveiled Word Registry

    Proprietary word registries have come and gone, several times. Numerous bar-code-oriented services have failed, and RealNames, which had the best traction as a word registry, including Microsoft as a business partner, never got close.


    > Merchants will have to be agreeable to

  • http://www.dontbeevil.com Mahlon

    The future is now. And you don’t need next gen hardware either. On your ordinary cell phone, send this text message to 46645 (GOOGL): “clos du val merlot”. You’ll get a response in seconds showing your 2001 vintage is available for $19.99 at BevMo.

    But I think this is the exception that proves the rule. Firms will not allow perfect competition because there

  • Scott

    To get a better handle of where we are headed, take a look at Japan. This is already being done their thru DoCoMo. The phone is becoming the remote control for everything. Its not an if, its a matter of when. You wont be typing lengthy URLS to get info, you will be taking a pic of a barcode, a created code, typing a word or word phrase, or number to get the desired content.

    The cellphone browser will not be used for surfing so much, but for instant information with items in the physical world. You arent going to do a google for “Brittany Spears concert tickets Madison Square Garden Nov 4″, but you will click on any one of her CD’s and be able to buy them w/ one click in any Virgin music store or when you walk past a Brittany poster, or see an ad in Rolling stone magazine. ( I used Brittany because just like the applications ive described they arent here yet, maybe they will be when she starts touring again)..

    RealNames WAS a great idea. There are a few reasons why it failed.
    1. it was only words
    2.it was tied to the PC (1 dimension)
    3.it didnt include barcodes/rfid with words
    4. it was good only for MS IE browser
    5.MS was losing control of their browser (GOOG tool bar does this now, next step the desktop)

    SAIC/Neom Word registry will be the AOL Keyword system for every web enabled device with every physical item in the world.

    Brands not paying their bills to license the barcodes? Come on. The fee is insignificant. For a brand manager to “turn on” his codes, a figure 2-5x’s this would be very reasonable considering the apps that can come from it.

    To give you a refresher on SAIC. They originally owned Network Solutions before it went public. NS was the original domain name registration co. Verisign bought NS out for over $10b. Now Verisign will be in charge of registering domains for rfid tags. Theres a reason SAIC is involved w/ this Word registry. This WILL change the whole keyword model for search engines.

  • http://www.stapleton-gray.com Ross@stapleton-gray.com

    Certainly SAIC got a good deal, but I don’t think it was much because of SAIC, perhaps apart from prescience. NETSOL was gifted with an exclusive government contract at the right time, and, whatever you think of all that, I don’t think you’ll see similar opportunities to mint money in this space. I’d also presume that any marketing savvy, vis-a-vis namespaces, went with them to VeriSign… SAIC is a large and capable (and employee-owned) company, but the markets it best understands are the public ones.

    Lots of companies manage information keyed to bar codes (e.g., QRS and GXS, just to name the most prominent product catalog services vendors in EDI), and the world is moving away from proprietary services, and toward collaborative federations.

    VeriSign won’t make big bucks off the Object Naming Service (ONS) that EPCglobal commissioned it to build and run (unless EPCglobal wrote a horrible contract)… they expect to make their money off all the services enabled by there being an ONS, e.g., their so-called EPC Discovery Services, EPC-IS hosting, etc., but those markets are open to many other players too.

  • http://www.buzzhit.com/buzzblog.html Tony Gentile

    All the pricing data you need (short of CPGs, I suppose) was just released by eBay via a web service:

    http://www.buzzhit.com/2004/11/ebays-next-chapter-pricing-authority.html

  • MikeD

    Pricing from EBay tends to be for items in the used/collectible conditions.
    Pricing from Amazon tends to be for items in the New condition.

    There’s a Web Service at Amazon that looks up by UPC somewhere… can’t find it right this second.

  • http://www.stapleton-gray.com Ross@stapleton-gray.com

    “All the pricing data you need (short of CPGs, I suppose)” sounds kind of like, “all the real estate info you need (short of single-family residences).” ;-)

    To be serious, yes, that sounds like a nifty new hack from eBay, and echos various other services from various other large players. I’m reminded a little of a chapter from Shoshana Zuboff’s “In the Age of the Smart Machine,” the case on “Global Bank Brazil” (a pseudonym), where she discussed the transformation of the bank from something that handled the borrowing and loaning of money, to something that had “gone meta,” i.e., also traded in information about trading in money.

    Heading back toward a discussion of product codes as unique identifiers… why was it simplest for me to use Amazon.com as the target for that reference to Zuboff’s book, above? Not the primary source… that would be Basic Books, Inc. Amazon is, in its niche, something of the site of record for consumer product information, both from the manufacturer (including the sample pages) and from 3rd parties (e.g., product reviews, and the transactional data they mine from customers to show affinities). The white paper comments on all this, and examines how this may become less captive to the dominant retailers.

  • Phyllis Dorminy

    John, Do you know about the small microcap company that is supposedly working with SAIC to register barcodes?

    Thanks,
    Phyllis

  • http://www.stapleton-gray.com Ross@stapleton-gray.com

    That would presumably be Neomedia (NEOM) referenced above. I looked at their financials… looks like they have zero revenue, and a handful of people, after years of existence and a lot of accumulated losses, so it would be one of those “our patents will let us conquer the world” plays, and I wouldn’t put any money on it.

    I’ve heard some fascinating stuff on the state of the whole EPCglobal/RFID root affair over the past week, suggesting that (1) lots of what I looked at in the CommerceNet white paper (which is out now, and can be found here) will be happening; but (2) only after EPCglobal comes to grips with a flawed revenue model.

    In a nutshell, there’s no reason that product codes (UPCs, EANs, etc.) can’t be routed like domain names, and no reason it ought to cost any more either (i.e., each company spends on the order of less than $100 per year for *all* its codes, and not the $800 per code that Neomedia seems to be envisioning).

  • Peter Slate

    Or, according to the LATimes, you can subscribe to QPRwines.com to find the best values:
    http://www.latimes.com/news/columnists/la-fo-matters8dec08,0,928089.column

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  • Pavel