Did Amazon just patent tech that could end showrooming in its stores?

Discussion
Jun 19, 2017
George Anderson

Do you remember showrooming? It wasn’t that long ago that brick and mortar retailers were lamenting consumers visiting stores to evaluate a product’s worth, only to lose sales when shoppers used their mobile phones to comparison shop for a lower price on Amazon.com and elsewhere.

With Amazon opening its own stores, it’s reasonable to ask how the retailer plans to deal with the same situation. Based on new reporting, one answer may be to use technology to block shoppers from being able to showroom at all.

Amazon has been granted a patent on technology that tracks when people who are connected to its WiFi network go online while in its stores. The tech, known as Physical Store Online Shopping Control, can take several actions when it finds someone is comparison shopping including:

  • Redirecting the browser to its own site;
  • Alerting a sales associate to talk to the shopper;
  • Blocking the site altogether.

The recently approved patent was originally filed in May 2012. Amazon has not commented on published reports by sites including Engadget and The Verge on whether it plans to deploy the technology.

Seventy-seven percent of shoppers have used a mobile phone to help them while shopping in stores, according to research published earlier this year by DMI. Nearly two-thirds of consumers said they compare online prices against what stores charge to get the best deal, according to the Pew Research Center.

Past research has shown that large percentages of customers will leave a store without making a purchase, particularly on higher ticket items, to save some money online. A study by GroupM Next found 45 percent of those surveyed would opt out of buying from a store to save 2.5 percent online. A five percent discount would be enough to convince 60 percent of shoppers to buy online instead of from a store.

DISCUSSION QUESTIONS: What is your reaction to Amazon’s patented Physical Store Online Shopping Control technology? Do you think Amazon is likely to deploy the tech in its stores? Do you think other retailers are working on or planning to use tech that performs similar functions?

Braintrust
"I would be shocked if Amazon implemented this tech as described. I do think they would implement tech to gain insights to make the experience better."
"I believe this technology is a bad idea. Big Brother is watching and this will freak people out."
"Look at it from their perspective. They now have a patent they control that prevents customers from using Wi-Fi to get to Amazon..."

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34 Comments on "Did Amazon just patent tech that could end showrooming in its stores?"

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Mark Ryski
BrainTrust

I find it ironic that the company synonymous with showrooming has patented technology to prevent it. Preventing shoppers from searching online while in-store may reduce showrooming, but it won’t eliminate it since shoppers can still use their own data plans to search. And while the idea of overly restricting online access could be annoying for shoppers, finding some way to control, guide or curate what shoppers can access when logged onto a retailers’ Wi-Fi could actually reduce some of the loss that results from showrooming.

Ken Lonyai
BrainTrust

If Amazon filters/blocks content that shoppers seek while in their stores, they will quickly discover how best to lose customer loyalty.

As impervious to failure as they seem to be, Amazon is not above missteps that cost them revenue and customers. For every Prime sychophant, there is an Amazon customer that can take them or leave them. If Amazon thinks that blocking open Internet access (or cleverly slowing it) to suit their needs will work, they will not only drive away occasional/fickle shoppers but even regulars that feel the giant has overstepped and exercised too much power and control.

It’s a big “if” as to whether they will ever attempt something like Physical Store Online Shopping Control, but if they do, the press, blogosphere, and RetailWire BrainTrust will have a feast at their expense.

Sterling Hawkins
BrainTrust

Just because Amazon could block content while on store Wi-Fi doesn’t mean they will. And I’m with you that it would be a quick way to alienate shoppers. Blocking otherwise pubic information from customers is rarely (if ever) the right answer. However, using it as a trigger to deploy customer service or change the in-store experience could be very viable.

Art Suriano
BrainTrust

Interesting technology but, if implemented, I could see customers getting angry and many not coming back. I think it could be beneficial for the technology to alert a salesperson instead. Frankly, if more store associates paid attention to customers shopping, much of the technology developed today would not be as important. If the store associate was alerted, they could approach the customer, unaware the person was price shopping on their phone. Then they could engage with the customer, find out more about what they were interested in and, if the store associate knew how to make the right recommendations, in many cases they would close the sale. I know the price is important, but several statistics show that customers are willing to pay more for service. When the customer is left to fend for everything on their own, why not shop for the best price? But if the customer is made to feel appreciated and valued, often they will fork over those few extra dollars and they will be happy to do it.

Max Goldberg
BrainTrust

It’s ironic that the company that benefits most from showrooming would patent a process to block it. That said, it’s easy to bypass, just turn off Wi-Fi and use data from your mobile carrier.

Chris Petersen, PhD.
BrainTrust

Just because you can patent shopping control technology does NOT mean you should implement it in your stores. The genie is out of the bottle. Consumers expect access and to control their experience, any time and everywhere — even in Amazon stores.

Ryan Mathews
BrainTrust

This strikes me as a tempest in a teapot. The technology doesn’t stop showrooming, it just stops you from being able to do it for free. If a customer is willing to incur a data charge, the whole “blocking” mechanism fails since it is keyed off of Wi-Fi. Where others see irony, I just see a company that keeps innovating. Most innovation fails and/or never comes to market, but that never slows down a true innovator and I’m still putting my money on the company that never rests. Lots of Amazon’s ideas are anywhere from impractical to flat-out silly. The important thing to remember is — in the best tradition of design thinking — they never stop generating new ideas and they don’t worry when ideas fail. It’s a lesson other retailers could profit from.

Brandon Rael
BrainTrust

It’s simply remarkable that the company that was benefiting significantly from the “showrooming” experience would create a technology to suppress these capabilities. In today’s age of the customer, the democratization of data, information, reviews and the ability to comparison shop, consumers can control the shopping journey.

However, consumers and even Amazon loyalists will find a means and a way around this. The brick-and-mortar channels are as relevant and vital as ever, as up to 90 percent of purchases are influenced by the multi-sensory experiences that only a store could offer.

This potentially could lead to some frustration, and friction, all of which Amazon prides itself on mitigating with their platform.

Shawn Harris
BrainTrust

I would be shocked if Amazon implemented this tech as described. I do think they would implement the tech to monitor in-store web traffic to gain insights to make the overall shopping experience better. I would recommend other retailers do the same; many are still struggling to make sense of the data they have.

Liz Crawford
BrainTrust

Sure Amazon will deploy tech in its stores – especially now that it’s bought Whole Foods. Amazon’s push into traditional retail should have everyone (hello Target) shaking in their shoes.

Lee Kent
BrainTrust

Amazon would be crazy to deploy the technology in any negative way. If they want to use it in order to send an employee to assist, great. Amazon will soon be joining the many other retailers who have learned to accept showrooming for what it is and to find other ways to provide their customers experiences and services that will win their dollars.

For my 2 cents.

Bill Hanifin
BrainTrust

Readers should not jump to the conclusion that Amazon will use this patented technology to prevent customers from searching online while in their stores. Showrooming was shown to be a positive for the customer shopping experience a few years ago and I think Amazon is too smart to make the blunder of preventing the behavior in its stores today. The expectation should be that Amazon will analyze the collected data to optimize its product merchandising and pricing strategies.

As the lead article states, “A five percent discount would be enough to convince 60 percent of shoppers to buy online instead of from a store.” Amazon would only have to make a small adjustment in pricing to stop the bleeding to other sources.

One other thought: Considering that many of the showrooming shoppers in brick-and-mortar retailers were probably migrating away to Amazon to get that 5 percent discount, I wonder how much sales loss really concerns Amazon.

Warren Thayer
BrainTrust

An idea that probably seemed worth exploring five years ago when it was patented but would be a terrible idea today. I believe it would really tick off customers and that some of the scathing comments about it would go viral.

Ken Morris
BrainTrust

I believe this technology is a bad idea. Big Brother is watching and this will freak people out. Just because you block Wi-Fi access anyone can simply move to their own provider to do the same thing. It made sense five years ago but five years is an eternity in cellular technology and access is way better today. Once you block customers they will stop using your app and you will create a bad customer moment. In retail CRM you have the 80 percent/20 percent rule where 20 percent of your customers are responsible for 80 percent of your sales. Savvy retailers try to minimize bad customer moments for this 20 percent of tier-one customers because that is why people leave and never come back — this is a bad customer moment generator.

Jerry Gelsomino
BrainTrust

I think that there is much more to come on this discussion. I hope the software is used to better understand customers so that they are better served.

Stefan Weitz
BrainTrust

This is just a patent — when I was at Microsoft we filed many of these without ever ultimately commercializing them. This one in particular is interesting because a.) it requires the person to be on the store Wi-Fi network and b.) it actually has a number of outcomes including alerting an associate to come and save the sale (not just blocking as many of the headlines initially reported).

Despite the fact that the store would have to have some pretty egregious terms of service to allow for inspection of all your internet traffic when using their network, it could actually be an interesting piece of technology that would allow the retailer lots of flexibility to save the sale (even such things as real-time discounting of items in their store if someone is comparison shopping).

Jasmine Glasheen
BrainTrust

This technology would be incredibly frustrating for customers accustomed to comparing prices. It seems distinctly un-Amazon, when the company has built its name on being the best price in town.
I’m skeptical of such a technology, which would quickly deflate burgeoning customer interest in Amazon’s physical stores.

Sky Rota
Guest
1 month 3 days ago

I can’t even say this idea may have sounded good in 2012 because I don’t think it was ever a good idea. I don’t like the “control” word. I want to be in control. I can tell you that if I go into a store that tries to take control of my phone I will run far from that store and never come back. And don’t forget we Generation Zers are sharers so something like this will spread like wild fire. I don’t recommend anyone using this technology. #DontEvenTryit

Marge Laney
BrainTrust
1 month 3 days ago

Did they patent the technology to keep others from doing so? Or do they intend to use it? Either way the giant can, once again, manipulate consumers in the name of convenience.

Tom Brown
Guest
1 month 3 days ago

To prevent others from doing so, obviously.

Larry Negrich
BrainTrust

With the addition of physical stores, I expect Amazon to offer an engaging in-store app experience utilizing this technology as well as other in-aisle/in-store location technologies. Amazon will surely up in-store promotion tech to make offers/communication based on the shoppers’ web searches made from within the store.

As far as this specific technology, I expect Amazon to use every technological advantage they have, including monitoring of Wi-Fi activity. Of course, the effectiveness of this technology requires the shopper to utilize the free Wi-Fi/app and anyone not logged into the in-store network or Amazon app would not be monitored.

Chad Bowman
Guest

Sometimes companies create patents to block others from building similar software, it would certainly benefit Amazon if it were more difficult to implement software like this at their competition. They could also use it to provide real-time price matching, this would allow the store to retain the sale if they can accept the matched price.

Shep Hyken
BrainTrust

I can’t imagine that Amazon would block customers from going online while shopping. If price is an issue, then why would Amazon put competitive prices (even lower prices) on their website? Yes, Amazon shows you where you can get the product for less than their competitive prices. Why? Because they are confident that the value they give the consumer can outweigh a few dollars in savings (much of the time).

I can see Amazon using this technology to enhance the shopper’s experience, not diminish it.

Mohamed Amer
BrainTrust

When I first read the news and patent I did find it ironic and amusing at the same time given the filing date and the patent ownership.

On further reflection, I can see this patent by Amazon as an attempt to keep others from blocking showrooming in stores. The company may be hoping that the patent covers with sufficient breadth (yet specific enough) how to combat showrooming, so others are unable to actually defeat showrooming under the scenarios covered by the patent.

That doesn’t preclude Amazon from exercising portions of the patent such as alerting a sales associate so they can salvage the deal.

Patents give the legal owner the rights to use and keep others from using those patented processes and technologies.

Vahe Katros
BrainTrust
Jeff Bezos has chutzpah! He also may have supplied a few of you with something to post on the lunch room wall as motivation. When I looked at the patent and noticed that it was filed on May 4, 2012 — and I’m not sure how long it took to write the patent — but let’s say that somewhere in early 2012 or maybe even 2011, Jeff challenged his people to find how retailers can thwart showrooming. One thing that’s true is Amazon must continue to grow, so while we should necessarily review this rationally, as a thought experiment perhaps we might examine a scenario where this reveals that Amazon has spent years thinking about things. Perhaps it’s my paranoia, an aspect of culture in retail and here in Silicon Valley but as I recall, Amazon started with books and video, improved the experience and expanded to new categories. What if they do the same now? What if they’ve spent the last five years thinking about executing the same strategy offline, again, because they need to grow? Might they take the software they mastered running grocery and adjust it for each sub segment? It’s crazy thinking to assume that the… Read more »
Steve Montgomery
BrainTrust

Many of today’s comments are about the irony of Amazon patenting a technology that prevents showrooming. Look at it from their perspective. They now have a patent they control that prevents customers from using Wi-Fi to get to Amazon for that exact purpose. The underlying purpose may not to prevent showrooming in their stores, but to control a patent that can prevent Wi-Fi being used to do it in other retail stores.

Craig Sundstrom
Guest

Certainly Amazon will deploy if it thinks it works, but I’m not sure how much it really will. To me “showrooming” is about viewing and then buying elsewhere … actually having an internet connection during the process isn’t necessary (though I’m sure it often happens).

But the irony of this makes the story worthwhile, regardless!

Ricardo Belmar
BrainTrust

I don’t believe we should jump to the conclusion that because this patent means Amazon could block a website it means they will block competitive retail sites. Maybe the goal of that feature is to block questionable content? We don’t know. I would focus more on the insight they will gain from the other features and the ability to create dynamic pricing per customer. Imagine the level of knowledge Amazon will be able to apply in the store just as they do when you shop with them online! I see that as the significance of this patent.

Cathy Hotka
BrainTrust

Ahh…the irony of having a shiny new technology that you cannot ever use…!

Min-Jee Hwang
BrainTrust

If shoppers are browsing the same product on a competitor site, having an employee walk over and chat with them would be a great way to keep them from checking out elsewhere. But also, this only works when connected to the retailer’s WiFi, it can’t stop all showrooming if shoppers are using their own network.

The underlying reasons for this technology are certainly things other retailers are focusing on: being more attentive to the customer experience and securing sales over competitors. The means might be different, but putting these ideas to work will be a major factor in determining the winners in retail.

Vahe Katros
BrainTrust

One more thing. Talk of Amazon’s interest in acquiring Slack speaks to the future of “conversational applications.”

If you are throwing a BBQ, planning a party, installing a home theater, seeking advice about a purchase, getting a second opinion regarding a piece of furniture from your friends and/or interior decorators, doing a home renovation, talking to folks in a store, or a supplier hotline and your handyman and the person whose review you loved on Amazon, and so on … you’ll be having a temporary set of conversations across multiple channels. Those that may include Alexa, or the voice system in your 2020 automobile (because auto companies are working on the problem of distracted driving). If you consider this patent in that context and AMZN’s interest, you can see that the future of retail and shopping and life in general will get more interesting. And thinking otherwise speaks to the famous quote about “Fighting the Last War.”

Kai Clarke
BrainTrust

There is an important notation to this showrooming technology. You have to be connected to their Wi-Fi in the store for this to work. Most people who are on their cellphones are not using a local store Wi-Fi, unless they have been there before. Along with this and the advance of 5G in the next year or so, and other incredible cellular “seamless” solutions to data access, the real question might be when would this “patented” technology be used? I think that this is much ado about nothing, while distorting the use of a technology patent.

Michael Carini
Guest

This solution fails to address the issue of showrooming, because most users on cellular devices are smart enough to turn off their Wi-Fi in order to find better prices. Those who stay on Wi-Fi will be alienated by the limited browser experience. While Amazon’s new patent is potentially useful for controlling Wi-Fi only devices, those are a small minority of devices users have with them in the store. In total, since the restraints could potentially prevent sales altogether, Amazon and other retailers shouldn’t waste their time.

Christopher P. Ramey
BrainTrust

This technology, as described, is irrelevant. Many retailers and hoteliers employ technology to block cell phones.

wpDiscuz
Braintrust
"I would be shocked if Amazon implemented this tech as described. I do think they would implement tech to gain insights to make the experience better."
"I believe this technology is a bad idea. Big Brother is watching and this will freak people out."
"Look at it from their perspective. They now have a patent they control that prevents customers from using Wi-Fi to get to Amazon..."

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