The Convergence of the Physical and Digital Marketplace: The Future

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The Convergence of the Physical and Digital Marketplace: The Future


Over the past few weeks, we’ve discussed how the marketplace has changed as physical brick-and-mortar stores converge with the digital world. The past revealed how milestones such as point-of-sale systems, barcode technology and ecommerce transformed traditional shopping, while the present examined how brick-and-mortar retailers are adapting to today’s mobile-centric consumer. Today we’ll look at emerging trends and technology that shed light on where we’re headed next, into a world where mobile payment, geofencing, social networks, and a customer-centric shopping experience shape the future marketplace.

Mobile Payment

The mobile payment space has been a red ocean sailed by credit card companies, mobile operators, P2P payment services and a variety of startups looking to colonize the emerging landscape. Several innovative technologies are being demonstrated in today’s market,, such as NFC, P2P services and operator-billing; though it is difficult to predict which mobile payment system will prevail, we suspect it will be a combination of these technologies. We’re confident that NFC will never replace the barcode for product identification, but it is a logical addition to checkout procedures, providing touch-to-pay options through an NFC terminal. With consumers already embracing NFC for touch-to-pay options or to take part in loyalty programs, it is likely more NFC payment terminals will arise as retailers catch onto the trend.


Another recent technology emerging in the mobile commerce space is “geofencing,” the concept of delivering content to a potential customer when they enter within a certain range of your physical location. The idea is simple, just picture an invisible fence surrounding a store, and when a customer crosses the fence content can be delivered directly to their smartphone device. Retailers are already beginning to use geofencing to combat the practice of “showrooming,” where consumers are using physical retail locations to comparison shop online through their smartphones, bringing their business to the cheapest online merchant. With geofencing, retailers are fighting back by embracing the smartphone as an outreach tool, sending texts to potential customers who are nearby and thus attracting them into their locations. Eventually this content will become much richer than simple text, with photos and videos accompanying deals and coupons.

Consumer-centric Shopping Experience

Customers now can choose how, where and when they shop. As they opt in to have more and more personal data about them collected in return for more relevant offers and advice, the digital shopping experience with become increasingly tailored to the individual. Soon this will not be limited to the online marketplace. Stores will soon develop the capabilities to tell when a particular customer is in their store. Through identifying the interests of the customers shopping in your stores retailers have a new opportunity to meet the wants and needs of individual consumers, a competency that one day be expected as the norm. Google is exploring the personalized shopping space through the creation of online boutiques, which are tailored to individual customer interests.  Cisco does a great job demonstrating the potential of delivering customer-centric digital content in-store through this video:




Social Shopping

A new e-commerce trend on the horizon is “social gifting”–a process where users gift their friends through social networks and mobile apps. Startup’s like Wrapp are capitalizing on this trend by allowing consumers to buy digital gift certificates for their friends through social networks, which are redeemable through their smartphones at participating brick-and-mortar retailers. Other apps are embracing the social web such as Livingsocial with its group-buying platform or our Scandit app which allows users to explore products or shop with their friends, gaining relevant advice from people they know. Apps like these represent a large discovery opportunity for traditional retailers, who can bring consumers into their physical stores without expending large amounts of resources on marketing.

Augmented Reality

Many other technologies are being developed in the so-called “augmented reality” space, where the attempt is to seamlessly merge digital content with our physical environment. Imagine if every surface was a computing interface. Google is exploring augmented reality through the development of Google Glasses. Microsoft has enabled users to create a touchscreen out of any surface with its Kinect and Apple has revolutionized the world of e-commerce through tablet innovation. All the major tech giants are currently dabbling with technology containing enormous potential. Within our lifetimes every surface may be a means for digital interaction. Microsoft developed a remarkable vision for the world in their video detailing the future of productivity:



As much as we love to dream about a utopian future where the full potential of technology is realized, we’re geeks who stay grounded in the facts. In a recent video Gian Fulgoni, co-founder of Comscore discusses future ecommerce trends from a quantitative perspective.  Fulgoni highlights how mobile apps which utilize a barcode scanner and GPS provide an opportunity for retailers to compete with the internet while the consumer is still in the store, and analyzes other recent trends. Check it out: