Silicon Valley’s MoBeam Touts LED-Based ‘Digital Wallet’

A Silicon Valley firm says it wants to eliminate the promotional paper trail in retailing. MoBeam, a new Cupertino, Calif.-based division of technology company Ecrio, is trying to stir interest in a keychain-based device that it dubs “the first practical digital wallet.” The company will demonstrate its “numi” key at the “CEA Line Shows” conference this week in New York with the hope that its LED-based technology will find interest among CE manufacturers and retailers.

The numi key stores bar-coded consumer information from up to 50 loyalty cards as well as coupons that consumers download from manufacturer websites, CEO Christopher Sellers told us. Consumers then digitally redeem the coupons -- and in the future, gift cards -- by beaming information from the keychain to a handheld scanner at checkout. Traditional barcode scanning requires a printed version of a barcode that a scanner “sees” and translates to electrical pulses. MoBeam eliminates the need for printed barcodes by using light from LEDs to beam barcode information into a scanner.

The keychain is the first product to load the technology, but the company is in discussions with wireless handset suppliers and other providers to incorporate the software into cell phones and even MP3 players. According to Sellers, “We have next-generation products that will be integrated with cell phones so you can download coupons while you're standing in the store.” He noted that the new Apple iPhone 4 has an LED flash, giving it the capability to work with MoBeam technology. “Any LED device can be controlled and pulse at the same rate,” he said, allowing for compatibility with the different laser bar code scanners.

MoBeam is talking to telcos and daily newspapers about delivery opportunities, too, Sellers said. The company strategy is to work within existing retail processes to have the most effect. MoBeam technology leverages existing barcode standards, including the Universal Product Code (UPC), as well as non-optical handheld scanners already in place, so retailers don’t need to make changes to point-of-service infrastructures. The technology doesn’t work, however, with optical scanners, which we discovered in a brief demonstration at a CVS Pharmacy in Manhattan. The fob worked flawlessly with the flatbed scanner at the do-it-yourself checkout lane but couldn’t be read by a cashier’s handheld optical scanner. MoBeam has been developed to work with other bar code standards, including the new GS1 DataBar, a successor to the EAN/UPC bar code, which Sellers said is scheduled for rollout in 2010.

Although some smartphones have bar code reading capability, Sellers said the readers in stores today typically aren’t able to read the codes from phones. MoBeam holds four patents for communicating information between a communications device and a bar code scanner. It also holds a patent for communicating information between a light-based signal and a fob device. Six other patents are pending for related technology including communication between personal electronic devices, an “intelligent three-way digital promotion delivery mechanism” and “apparatus, method, and system for loading digital transaction documents to a personal digital device.” The company’s patented technology pulses LEDs at rates of 2 ms, 4ms and 12 ms, to address the varying rates of scanners.

MoBeam is currently listing the numi for $34.95 at Amazon, but when we checked the site Monday, there was only one listed as available for purchase. Company executives maintain that the $35 price tag will be worth paying to consumers who will “have access to the value they're leaving home all the time.” In the future, manufacturers and retailers will be able to download special offers to devices, boosting their value, Sellers said. “People don’t pause to spend $35 on a wallet or a purse, and we put this into that category,” he said.

Today, consumers own an average of 14.1 loyalty cards, Sellers said, citing figures from market research firm Colloquy, and only about six cards are used because people don’t want to carry more than that. Sellers said by using numi technology, consumers will be able to take better advantage of the $3.2 billion in consumer promotions in the market every year, because it consolidates loyalty cards into one device so they don’t miss out on deals. The next generation keychains will hold coupons, club cards, library cards and “anything with a bar code."

The devices can provide useful tools and tracking data to retailers, Sellers said. It’s a fit for the consumer electronics industry because of the gadget connection on the consumer side, he said, and the potential savings consumers can realize. For retailers, “if I'm introducing a new product to the marketplace, I can front-load a product by providing higher value early on,” he said. “I can flood market with millions of products in the first week, and then drop that down. It’s an electronic end cap.” He said there isn’t a lot of growth at retail now and retailers are “stealing share from one another. So it’s about how can I enhance the experience and make consumers more loyal. If I can send them special offers via my own website, that gives consumers value."

From the feedback from numi devices, retailers can see when and how cards are used. The MoBeam widget can be placed on a retailer website, Sellers said, as an alternative to the “print” button. Instead of pressing print, consumers can press download to get offers sent to the device. The technology will also allow retailers to stratify customers. “The best customers typically don’t get the best offers because they're already the best customers,” Sellers said. “It’s the middle two tiers that are often incentivized at the highest levels to move them to the next level. We enable retailers to discriminate between who gets which offer, what level of offer, and the ability to test offers in different geographies.” Because the numi is a gadget, it could bring more men into the promotions mix, he said. “We may open up a completely new segment of consumers to use promotions and programs,” he said. Currently 52,000 retail locations are equipped to work with encrypted Numi devices.