It’s increasingly common for consumers buying anything from a DVD player to a pasta maker to compare prices and check out product reviews at websites such as Amazon, kelkoo or ciao.com, ahead of making a purchase online. If they like their purchase, they might even crow about it on Facebook or Twitter.
Now Mirasense AG is offering the same power to shoppers browsing store aisles in the real world. The company, winner of the Science|Business Academic Enterprise Fast Start Award for 2011, has developed a barcode reader that scans any product via the built-in camera of a smart phone, allowing pricing information and product reviews to be displayed on the phone instantly.
“We are allowing each consumer to take the experience from the online world into the retail store,” says Samuel Mueller, chief executive, who co-founded Mirasense in late 2009. Consumers with smart phones may already be doing this by searching the Internet when out shopping, but the barcode reader gives them a direct link to all the pertinent information. Users can also share the information with popular social networking sites.
Zurich-based Mirasense is not alone in using barcodes to link up to online information on products. Competitors include RedLaser, which was acquired by the trading website eBay last October, and pic2shop. But the ETH Zurich spin-out is hoping to stand out from the crowd with a better, easier-to-use application.
Interpreting hard to scan barcodes
Last October saw the US launch of Scandit, a free mobile shopping application for iPhones and Android smart phones, which Mirasense claims not only scans faster and more accurately, but can also interpret barcodes that are sideways, upside-down, curved, scratched or blurred. It chose to launch first in the US because barcodes there contain more information than in Europe.
Ubergizmo, a website/blog that ranks mobile gadgets, gave Scandit a thumbs-up after comparing it to RedLaser, saying, “The barcode scanner is better; with Scandit, you can capture a barcode even when it is not positioned horizontally, and RedLaser is unable to do it.” Ubergizmo also praised Scandit for its speed and the large number of vendors included in the shopping database.
Ubiquitous barcodes beat new RFID tags
Although Mirasense is a young company, its technology has been in development for about five years at ETH Zurich’s Institute of Pervasive Computing. Christian Floerkemeier, now chief technology officer at Mirasense, was involved in such research at both ETH and MIT, where he was formerly associate director of the Auto-ID Lab, developing mobile identification technologies.
Some of that time was spent focusing on radio-frequency identification technology. But while there was much hype around the tagging technology a few years back, Floerkemeier says researchers at ETH came to recognise that convincing retailers to include a new technology in their products is difficult. “If a business owner sees no clear value proposition, they are not going to change their product for you,” he notes.
Instead, the ETH researchers, including Robert Adelmann, a specialist in barcode recognition technology, and Christof Roduner, whose focus is on distributed computing, decided to focus on old but ubiquitous barcode technology. “There are billions of barcodes out there used at checkout. They are the backbone of retail sales. We looked at that and thought that we could do something to link them with cell phones,” says Floerkemeier.
The technology found a market before Mirasense was even launched. In 2008, the German retailer Metro Group licensed the technology for its Future Store demonstrator near Duesseldorf, where new retail technology is trialled. The barcode scanning technology was integrated in a mobile application, giving customers in the store online information about the products displayed and allowing them to checkout using their mobile phones. The ETH researchers received a share of the revenues from this deal.
But it soon became clear that a spin-out would be the best way to commercialise the research. Enter Samuel Mueller, who got to know Roduner while at ETH completing a PhD in computer science between 2005 and 2009. Mueller was also a researcher with IBM Zurich Research Labs, and before that had been a consultant and project leader for Swiss Re, Swiss Airlines and IBM. He began talking to the ETH team about their idea and they recognised that working together was, “a good fit with his know-how and background,” says Floerkemeier.
Extending online and offline shopping channels
By the end of 2009, the four took the decision to style Mirasense as a specialist on what Mueller calls, “mobile product interactions services.” The company expects barcode-based shopping applications to become a natural extension of online and offline shopping channels. The market research consultancy ABI Research predicts the market for mobile commerce, in which consumers use smart phones to research, browse, order and pay for consumer products, will grow to over $100 billion by 2015.“Mobile phone-based barcode scanning is of course only a fraction of this,” says Mueller. “But our barcode scanning technology has a lot of potential to replace classical laser scanners in markets such as logistics and procurement,” he says.
To date, Mirasense has raised some CHF 250,000 in seed funding through grants and start-up competitions, including Switzerland’s Venture Kick programme. Mueller is currently seeking CHF 1 million in follow-on funding.
The free Scandit application is merely a showcase for the company’s technology. Its founders expect the main stream of revenues to come from licensing and Mirasense’s core technology, Scandit SDK, is now available on all major mobile platforms for licensing to mobile application developers, retailers and system integrators.
Mueller says that the company’s revenues from licensing are “significant,” but declines to elaborate. The company has struck licensing deals with Swiss online entertainment retailer Ex-Libris, Swap.com, a site that enables people to swap goods with one another, and Swiss comparison shopping site Comparis.
Power to the consumer
Comparis in December launched a Smartshopper iPhone app, an interactive shopping list that automatically checks the items on a consumer’s list against special offers from major retail stores in Switzerland. The shopping list provides a “scan-to-add” feature that lets the user add a product by scanning its barcode.
Benedikt Unold, chief technology officer of Comparis, says the company chose Scandit SDK because the barcode scanner is fast, has a high recognition rate and recognises barcodes even if the user does not hold the phone in the intended direction. “The usability of the barcode scanner leads to a good user experience and supports high user satisfaction with the Smartshopper App. The Mirasense Scandit is probably the best mobile phone barcode scanner on the market at the moment.”
One hurdle for Mirasense could be that retailers will resist an application that opens consumers’ eyes to what else is out there on the market while they are within the confines of the store. But the company’s founders believe that with or without their cooperation, the shopping experience is already moving in this direction. “Power is now moving towards the consumer,” says Floerkemeier. And he points out the barcode scanner technology could help bricks-and-mortar retailers keep consumers buying from them, perhaps with special offers or longer product guarantee, if they purchase from the store.