Feeding the Puppy

Barcodes, Perfect Competition, and the future of shopping

Barcodes?  The future of shopping?  Is this some weird sort of retro post?  Like when the newspaper does 'today in 1972...'?

Because, of course, there's nothing new about the barcode... it was first tested in US supermarkets in the sixties.  As technology goes, it's as old as the hills. 

 

So how on earth can it be the future of shopping?

Because what matters nowadays is not the barcode itself, but the reader...

Supermarkets (and now other high street chains) have been putting the control of scanning in the hands of customers for a few years now... not as an advantage to the customer, necessarily, but as an automation of a job that used to be done by checkout assistants.

(...the economic labour market implications of this helps explain why the five members of Girls Allowed had to find alternative employment...)

 


It's not really a move that's putting the customer 'in control' of course... the important part (price comparison with other possible competitors) is locked away. 

With developments such as this, and through years of watching shop assistants at work, we've all been taught by the shops how to scan barcodes... 

However... imagine you could take that barcode, and scan it with something else... something that lets you compare prices across every outlet, order it online... and essentially through market forces means that the price you pay becomes as low as possible...

Well, that scanner is here.  And it costs £1.19.  And it's an app for the iPhone 3GS called Redlaser...

 

It works like this; you fire up the app, and it uses the camera on the phone to take a picture of any UPC barcode you hold in front of it, as the video explains...

When I first heard about it, I expected it to work on things like books, CDs and the like... but then I tried it on baby milk...

 
...which quickly told me that our local pharmacy were charging £1.19 for something that costs £0.58 in Boots.

I still can't quite get my head around just how big a step this represents in the way our economy works... but it's taken me back to my Economics degree and a thing called Perfect Competition.

Like many things in Economics, Perfect Competition was just a theory based on unattainable assumptions... infinite buyers & sellers, costless transactions, zero entry/exit barriers and so on

...read the wikipedia entry here for a full explanation)...

...but the one assumption that is close to becoming fulfilled by Redlaser is Perfect Information; prices and quality of all goods in the market are known to every seller AND every buyer.

Perfect Competition as a theory has many ramifications... but perhaps the most important is this; it becomes impossible in the long run for any company in the market to do any more than cover their costs.

So for instance, if I have perfect information about everyone who sells Aptamil baby milk, and there is no 'transaction costs' which set any seller apart (e.g. I can order from all store in bulk via the internet), then I'll always just order the cheapest one. 

 


Which means for both the retailer (Boots) & manufacturer (Aptamil), I'll only ever give them the least possible money for the baby milk. 

If everyone did that, for every product, that manufacturers and retailers would only ever break even, as market forces will continually drive down prices...

(Now, that's not of course how everyone behaves now... but it's got me thinking of something that's worth a separate post.  And I think there's more implications for the Perfect Competition hypothesis from the internet too, but I'll go in to them on another separate post too...)

So we'll all have perfect price information, but what about the other half of Perfect Information; the quality of products? 

How can we possibly begin to share the information about a vast array of products across society in a way that bypasses manufacturers and retailers...

...oh, hang on, right you are...

 

Whatever it is you're buying nowadays, there's a discussion/forum/review on the internet from other people which will guide you as to the quality of the product you're looking at. 

What does it all mean? 

Well, in a world where people have access to Perfect Information about just about every market, what implications does this have for branding? 

Is traditional branding a mechanism that only works to protect price premiums in a world of imperfect competition?  Will I find out about the quality of products from other people, then the cheapest place to buy it via mechanisms like Redlaser?

I'm certainly going to be thinking about this a lot more in the weeks to come... probably at 4:00am when I'm feeding James with all this bargain baby milk we've been buying...

Guardian Activate Redux: Arianna Huffington

I liveblogged the Guardian Activate Conference in July.  Now that the videos of the speeches are online, it's a good time to revisit some of my favourite things from the day... I'll post up one video every few days or so...

Arianna Huffington - "Mainstream media suffers from Attention Deficit Disorder, and new media suffers from Obsessive Compulsive Disorder..."

First of all it's amazing that even though it's just under 3 months ago, the things Arianna Huffington touches on as 'happening now' seem so long ago...

...the Iran elections, the very start of Healthcare reform in the US.  The speed with which 'new news' comes at us is astounding.

Which chimes excellently with the point mentioned above...

Mainstream media has ADD. 

It can't focus on anything long enough to make it matter (the sole exception perhaps being the Telegraph's expenses scandal).  Every day has to be about new news, new headlines, new ways to grab attention.

Meanwhile, new media has OCD. 

It keeps going with things, again and again, reinventing, adding to.  Look at how the Kanye West thing is over in 'mainstream media', yet continues to be remixed, shared, carried on across the web... the story doesn't die.

I guess the power of new media, as it develops, will be to keep going not just at the memes and the fun silly stuff, but to start chipping away at the important stuff too.

Hopefully we'll see a lot of it bubbling to the surface around Copenhagen later this year.  Because for the mainstream media, there will just be another big story along the following week

Hold the R'FID beans...

...first up, I know the post title is an awful pun on refried beans... but hey, if a boy can't use an awful pun on a Friday, when can he..?

Anyway, to the point; the whole RFID tag on supermarket items thing - are people barking up the wrong tree?

Some background...

I wrote a post here which covers this in more detail, but for a while now there's been a lot of stuff around talking about how life would be wonderful if everything sold on a supermarket's shelves came embedded with a little RFID tag...

...so that you could do all sorts of handy things with it.  When you took things home and kept them in your house, an RFID reader in your fridge or cupboards would know what you've got at home, what you need for certain recipes, what you need to pick up on the way etc etc etc.

As I say, read more about it here if you wanna.  It's all very handy, all very exciting...

...but it ain't here in any significant way yet.

And the reality, as this state of the market report from ReadWriteWeb says, is currently quite a way off, for various reasons; the cost of implementation, getting all suppliers to sign up, efficiency of technology and so on.

Whilst we wait for the business world to sort something out with better tech... will we see ordinary people just bodge and hack a version that works for them?

Say what you see...

Tim O'Reilly and John Battelle recently wrote a white paper called Web Squared: Web 2.0 five years on (found via ReadWriteWeb again).  In it, they talked about how RFID might not the way we extract 'identity data' from real world objects:

"A bottle of wine on your supermarket shelf (or any other object) needn't have an RFID tag to join the Internet of Things, it simply needs you to take a picture of its label. Your mobile phone, image recognition, search, and the sentient web will do the rest. We don't have to wait until each item in the supermarket has a unique machine-readable ID. Instead, we can make do with bar codes, tags on photos, and other "hacks" that are simply ways of brute-forcing identity out of reality."

So, for example, think about the way QR codes worked... they used cameras hooked to computers (your mobile, most likely) to turn an image into data:

 

So, when you saw a bottle of pepsi with a QR code on it, you could use your phone to capture the data from the code, access the content etc etc etc...

Think what's going on though... all the camera is doing is recognising shapes, colours, patterns.

And can of Pepsi Max is, visually, shapes, colours and patterns too... it's more complex, admittedly, but with the advancements in augmented reality (more great examples of that here) rapidly improving all the time, cameras will be able to recognise packaging as it comes off the shelf.

 

Then, if we can teach a computer to recognise packaging... can we teach it to recognise the visual signs of how much of the product we have left?

For instance...

I know this bottle of Pepsi is finished.  You know it's finished too.  I wonder how far we are away from teaching a computer to realise that it's finished, or half empty, or has been open for a week so is probably flat...

Because then what you might do is just stick the equivalent of a mobile phone camera in the inside of a fridge door, and when you need to have a look in the fridge... well, you just bring up the iPhone app that connects to the fridge camera and determines what's in there.

Which as my missus will tell you, is going to be a lot more efficient and reliable than sending me to look in the fridge... I can never find anything...

Anyway, the upshot of all this is that by the time RFID gets around to being implemented by creating physical ways of making it feasible and reliable, there may be a non-physical way of capturing and interpreting the same data.

'Twas ever thus, eh..?

Thingfrastructure

I've just read this brilliant piece by Matt Jones of Dopplr / Schulze & Webb on what he calls 'thingfrastructure'...

(I found it via Influx Insights, thanks Ed)

Matt proposes that...

"the technologies of rapid fabrication and pervasive networks are allowing the tangible and the intangible to switch places and mingle."

Eh??!

Don't worry, I'm going to 'write out loud' to get my head around it too...

Rapid fabrication - We can make things (real world, physical objects) very quickly, and replace it often.  We don't have to make something in the bulk we used to, with the homgenous consistency we used to, or at the price it used to cost.  Moo cards being a great example; I've just had another set of 100 delivered, with a variety of personalised, different images, at a much lower cost than traditional business cards...

The same technology is beginning to affect packaging, and when 3D printing kicks off properly will really come into it's own...

...so physical objects are becoming updatable very regularly.

Pervasive networks - Through a combination of constant access to the network through a myriad of devices, the low cost of everything from processors to RFID tags, and the design & use of systems to capture information, there is increasingly some information & data capture sitting behind everything we do.  It's also referred to as Ubiquitous Computing (so Wikipedia tells me).

...so everyday actions can provide timely, relevant and useful information.

Now, here's the clever bit:

i) we can quickly make physical things based on the best available information

ii) we can collect the best available information from the things that are in the real world

This means that the real world of 'tangible' objects influences the intangible world of services via the network, and vice versa, as Matt's chart shows:

It means that every thing that is a part of the connected world is more than just a physical object; it becomes a connected, influencing part of the world around us and the services we use.

(and no, I didn't just blog about this because of the Lego slide Matt uses; it's not part of the ongoing Feeding The Puppy obsession with Lego as a brand and a metaphor).

But what would it mean in real life?  Here's an example of where this could go...

Imagine you are about to leave home from work one night, and fancy cooking a curry.  Using your mobile, you’ll be able to find a recipe, and then connect to the refrigerator in your kitchen at home to see which of the ingredients you need. 

The fridge knows what the contents of your kitchen are; there's an RFID tag on each of the items in the fridge & cupboards that identify them, the date they were placed in there, the number of times they have been taken out and replaced (telling you roughly how much you've used, and therefore need).  

The fridge responds with a shopping list.  You take this list, and connect your mobile to the satellite navigation system in your car. 

Your car contacts a series of stores which you could pass by on your route home, and checks which ones have all the ingredients (because all the RFID tags in store act as a real time inventory of stock), which ones are at the lowest prices, and which will take the least amount of time as a detour on your way home.  You get exactly what you want, in the fastest, cheapest, most convenient way.

This is commonly referred to, I believe, as the internet of things, but I think Matt's concept of Thingfrastructure is a great build, because it highlights the need for services in this world, and not just physical things.

Companies in this new world will of course have to make sure the things they produce are great (there's noweher to hide a dodgy product anymore, as Chris alluded to recently).  But it will be the service they create around the things that will make people choose them over a competitor...

So, the smart supermarket could identify what people are using certain products for.  They could start printing the recipes on the back of the next print run of packages.  Or add in photos taken by customers of the meals they created, or tips on how to make the recipe better, or what wine people tried with it.  Or become as competitive on price as possible by creating packs that are the exact size people need for the recipe...

Of course, it all sounds very far away and futuristic... but hey, if the iphone fridge is here already, it may be closer than you think.

Supertoys last all winter long...

Derek showed me this today... his niece is getting one for Christmas it would seem...

That's just freaking me out a little... lifelike, but not lifelike enough... but I guess the generation of kids nowadays won't bat an eyelid, it's just natural to them, they grow up with the technology that makes it possible.

It's not that far a stretch from Teddy in the film A.I.  That was seven years ago.

Just imagine the sorts of toys that kids will have in another seven years time.  The toy that becomes the geo-tag locator, nanny, health practitioner, educator... a supertoy that lasts all summer long.

Steve Ballmer talking, err, balls...

...at least, about his view on the future of advertising/content/media, all wrapped up in a nice little analogy about watching golf...

"It's going to be harder and harder to tease apart what’s communications and what’s media because if I say I am watching a golf match and at the same time I see Tiger Woods’ golf ball I take my clicker, it points at it, it figures out that it is a Nike Elite, it says ‘Do you want to order a dozen balls for you and your friends?’. Advertising, commerce, community and content all kind of blend."

See the video from the Washington Post here: