In the future, bargains hunt you

A new real-time deals service hints at the evolution of shopping

Photo by MelvinSchlubman/Flickr

You ascend from the subway and check your phone. It tells you that you’re half a block away from an ice cream shop with a sale on single-scoops, ending in 8 minutes. You buy a cone through your phone, then pop into the store to choose a flavor. The girl behind the counter somehow knows your name.

That’s not sci-fi. It’s an app, just launched in Toronto from the group-buying site WagJag (owned by Torstar digital). WagJag Express offers users “geo-targeted” real-time deals. It uses your GPS co-ordinates to point you to bargains in your immediate vicinity. It’s a boon for merchants, who are growing weary of having to provide “deep discounts” of 50-90% to hundreds (if not thousands) of digital coupon cutters, who tend to show up and cash their chits in when it’s least convenient. Instead, local businesses can offer small handfuls of customers slight bargains at very specific times. If you’ve got a sales slump from 2:30-3:40pm, you can knock 15% off for 15 people and keep business moving. As customers track bargains through their iPhones, merchants track customers through their iPads. When I buy that ice cream cone on my smartphone, the girl behind the counter is informed of the sale on her tablet, which also tells her my name. Like I said, it’s a reality.

Now here’s some sci-fi:

You emerge from the subway. You pass the same ice cream parlor, but your phone offers you no discount. It knows from your purchasing history that on hot Wednesdays like this you always buy ice cream anyhow, so there’s no need to offer you the bargain that everyone else in line is getting. Instead, you’ll be getting an offer to join Weight Watchers at a 3% discount in about 7 minutes, just as the post-ice cream guilt sets in.

Bargain services have begun offering you deals based on where you are, but how long before they also factor in who you are? If you’re trying to build a customer base, why not offer deals only to first-time customers, or super-deals to super-social customers (this is already happening with influential Twitter users)? Or if you’re looking to build a hip reputation for your business, why not offer bargains only to young customers? Why not exclude out-of-towners from deals? Everyone knows tourists will pay more, and there’s little point in building loyalty with them. If you’re a company like Torstar that also collects reading habit data on your customers, why not mash it up with their WagJag purchasing histories? Once you know both their topics of interest and their disposable income levels, you can customize deals and price points for each customer.

To be clear, WagJag Express isn’t doing these things. Yes, Wagjag knows each user’s name, age, gender and buying habits. But they don’t use this data to decide which deals to offer- not yet. In a phone chat, I suggest to Candice Faktor, Torstar digital VP and (full disclosure) a friend of mine, that merchants would probably love to fine-tune their bargains this way. Will they ever let shopkeeps get “granular” with their price tags?

“This is the first iteration,” says Candice. “This space is evolving.”

Jesse Brown is the host of TVO.org’s Search Engine podcast. He is on Twitter @jessebrown.




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In the future, bargains hunt you

  1. I have no idea why anyone would want to be bombarded with random ads on their phone for products they don’t want but I don’t understand many things about modern world. 

    Interesting article about new and improved algorithms in FT a few days ago. 

    FT, Inside Match. com ~ 

    With the number of paying subscribers using Match approaching 1.8 million, the ­company has had to develop ever more ­sophisticated programs to manage, sort and pair the world’s singles. Central to this effort has been the development, over the past two years, of an improved ­matchmaking algorithm …

    Codenamed “Synapse”, the Match algorithm uses a variety of factors to suggest possible mates. While taking into account a user’s stated ­preferences, such as desired age range, hair colour and body type, it also learns from their actions on the site. So, if a woman says she doesn’t want to date anyone older than 26, but often looks at ­profiles of thirty-somethings, Match will know she is in fact open to meeting older men. Synapse also uses “triangulation”. That is, the algorithm looks at the behaviour of similar users and factors in that ­information, too …. 

    As a result, Match began “weighting” variables differently, according to how users behaved. For example, if conservative users were actually looking at profiles of liberals, the algorithm would learn from that and recommend more liberal users to them. 

    Indeed, says Thombre, “the politics one is quite interesting. Conservatives are far more open to reaching out to someone with a different point of view than a liberal is.” That is, when it comes to looking for love, conservatives are more open-minded than liberals.

    http://www.ft.com/intl/cms/s/2/f31cae04-b8ca-11e0-8206-00144feabdc0.html#axzz1TybjHOhF

    • I have no idea why anyone would want to be bombarded with random ads on
      their phone for products they don’t want but I don’t understand many
      things about modern world

      I think the point however is that the system “learns”, so while you may at first be “bombarded with random ads for products you don’t want” eventually you’ll only get ads for the types of things you DO want, and offers similar to offers you’ve actually taken advantage of in the past.  Eventually, the system might figure out what you want and when you want it better than you know yourself!

      • Ads are still random if I ordered a pizza a few days ago and my phone is sending my ads for pizza today. I don’t like eating pizza every day.

        I was wondering how you could make app more useful. Maybe enter info into app in morning – let me know if pizza is offered as deal today, also looking for new cell phone and mint choc chip ice cream. 

        When local vendor offers what you are looking for, app lets you know? That would be useful.

        I goggled Onion – al-Qaeda – infrastructure article you mentioned. Funny.

    • Ah, but they’re not just ads.. they’re “deals”.

      And some folks can’t resist a deal, even if it’s for something they wouldn’t have bought otherwise.  If you’re not one of those folk, then I expect what would happen is the system would slowly figure out that you’re not worth sending the advertising to and you’ll just find yourself paying regular price for everything.

      Of course, Jesse talks about this like it’s kind of a bad thing, but really, unless you’re getting the deal, you simply won’t know about it, so won’t feel ripped off.

      As to your offtopic thread, it turns out ugly people are also far more open to reaching out to pretty people than pretty people are to ugly folk.

      • I don’t know that your analogy holds.  Ugly people are often self-conscious of that reality and thus are too shy to reach out to anyone, where pretty people might just not have ‘ugly’ as very high on their list of turnoffs.

  2. You know, back when this stuff would have been SciFi, the sub-genre that dealt with these kind of topics the most was near-future distopian fiction.  More Blade Runner & less Star Trek.

    Which is why I mostly pay cash.  That and the electronic transaction guys can easily scoop 3-5% of revenue from small vendors, and I’d rather give my money to the little guy than to MasterCard.

  3. All this in aid of encouraging increased consumption on a small planet, as we continue to devour our environmental capital as if it were worthless.  Après nous, la déluge.

  4. Well, it seems to me that this technology will result in consumers paying a lot more for products. If merchants are tired of offering 50%-90% off and want to switch to a model where they will only offer “slight discounts at very specific times” to a limited number of people, then we are all going to pay a lot more for goods and services. And if, in the future scenario, if you are no longer going to receive bargains for things you do buy, but only for things you don’t buy, then this technology really is detrimental to the consumer. And if your information is being shared with other merchants with whom you have no business dealings, then there is a serious, and likely criminal, breach of privacy.

  5. Could you share the url for the Flickr photo Jesse?  I’d like to share it, and might as well send people right to the original, but MelvinSchlubman has over 3,600 photos on Flickr, and that pic’s not in his folder labeled “signs”.

  6. And the deal of the day is: $4.99 marked down to $4.99 and a further steal by being marked down even further to $4.99  What????  Just by changing the colour of the tag they think that people will not read and just think they are getting a GREAT DEAL…  Wow!  Are shoppers ever stupid!

  7. One of the reasons I was not happy about the new commenting platform.  Ever since my ‘login’ I now recieve span advertising from Macleans suggesting I purchase a product from a business in my local area. 

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