Local professor Jonathan Engelsma thinks that smart phones can be a whole lot smarter for brick-and-mortar retailers, and the $22 billion company that has just launched the Droid phone is betting that he's right.
Motorola Inc., the Schaumburg, Il.-based communications giant, has just funded a $50,000 research grant to Engelsma and a core team of students at Grand Valley State University to investigate how cell phones can be used by local retailers to boost their business.
While his student team members are involved in internships this summer, Engelsma plans to begin conducting research through the GVSU Mobile Applications and Services Laboratory. "We hope to launch later this month, so we will have several months to collect data and observe how users respond, what's working and what's not," Engelsma says. "By the time the team gets back to West Michigan in mid-August, we'll have a fairly well-developed roadmap for the project during the fall semester."
The study is a reversal of roles: It's usually consumers who want information through the use of "apps," shorthand for applications that run on smart phones that can do everything from comparing paint colors to calculating what sized jar of peanut butter to buy to get the best value.
"We're connecting the dots on what's already out there," says Engelsma, associate professor in Grand Valley State University's School of Computing, where he leads the mobile computing laboratory. He says the advent of apps running on smart phones that amount to personal computerin a person's pocket can greatly enhance the efficiency of the market to reach consumers -- and vice versa.
Engelsma, 43, and a team of three students -- Alejandro Montoya, 28; Greg Zavitz, 19; and Joseph Roth, 20 -- have begun working closely with researchers at Motorola to deploy an experimental application "in the wild" to study how emerging mobile technology can enhance retail loyalty, customer satisfaction, and leverage social persuasion. They hope to launch the app in a month or so.
"Because the smart phone knows where it is, everything that's up in the clouds can be accessed real-time from anywhere in the world," Engelsma says. "The consumer has a real-time consumer guide in their pocket at all times."
Apps for mobile phones that help consumers do research while they are out shopping started to make strong inroads last year. After being loaded into smart phones such as the Motorola Droid or Apple iPhone, some apps can help shoppers find the best prices on goods depending on the location.
Consumers can input their locations -- or even have the information automatically entered through use of the Global Positioning System -- and the smart phone will churn out a list of nearby retailers that offer the products and their prices, as well as online retailers of the goods.
For instance, CNET and CBS Mobile launched a free mobile shopping application just before Christmas last year that gave shoppers easily access to CNET editor reviews, user reviews, product specs, and pricing info "instantly from any Android-powered mobile device." CNET is a website owned by CBS Interactive that specializes in providing technology related news.
CNET says its Scan & Shop app "gives consumers a fast, convenient, and easy way to look up products and compare prices among local and online retailers via their Android devices." The app allowed consumers to search for products by name or scan product barcodes directly using the phone's built-in camera.
A Taproot of Information
What a wealth of data if local retailers could only tap into it, Engelsma and Motorola say. To some extent, such information would help to put those retailers with investments in physical spaces on a more level playing field with online retailers.
"One of the advantages online retailers like Amazon have is that they have a lot of information about the individual end user, including what products you've looked up, how long you spent staring at the product information between clicks, what items also have been selected by consumers your age and in your demographic," says Engelsma.
For instance, the Amazon Remembers feature in Amazon.com's app lets the user take a photo of the desired product and send it off to Amazon. If Amazon recognizes the product right away, the user will receive a response in just seconds. If Amazon's automatic image processing doesn't yield a hit, it gets outsourced to humans via Amazon's Mechanical Turk, and the user will get product info shortly. And all of that information gathering and response can get tracked for data purposes.
Engelsma and his team hope to rectify that situation for physically-based retailers. "No information is mined from a cash-paying customer at Best Buy," he says. "The retailer has no way of knowing what the customer looked at or how long he was in the store."
A few ways that local retailers may entice shoppers to divulge some data about their purchasing habits is by providing reliable comparison shopping information at the stores themselves and allowing consumers to hook up with local networks of social media such as Twitter and Facebook. Many of those services already are being offered by CNET's Scan & Shop app.
By providing an incentive to download personal information, "traditional retailers can use this technology to their advantage," says Engelsma. "Plus they have one thing over Amazon: Most decisions on purchases are made on site, at a brick and mortar store."
Theoretically customers could look up reviews on their smart phones even in the parking lots of retailers, see what friends say about the products on Facebook or Twitter, watch product demos on YouTube, comparison-shop in real time, and narrow down their decisions before entering a store. Instant gratification works in the retail store's favor because customers can walk away with their purchases right away.
Companies such as Foursquare are already implementing mobile technology utilizing social media, such as Facebook, Twitter, and YouTube.
"Research shows that two-thirds of Facebook users were more likely to purchase a product if they were referred to it by a friend," Engelsma says. "The friends do the test-drive and give a thumbs-up or -down."
Force for Attraction
Engelsma says he sees his work for Motorola as going beyond just helping local retailers increase business: it's also is establishing Grand Valley State University as a focal point for mobile computing research. And that kind of research attracts the best and brightest to metro Grand Rapids, he believes.
A Grandville High School graduate, Engelsma obtained a computer science degree from GVSU in 1987 and went on to get a doctorate from Michigan State University in 1993. Engelsma and his wife, Mieke then moved to the little town of Elspeet, the Netherlands (Mieke's native country) and commuted to their jobs in the city of Ede.
The Engelsmas worked for about seven months at a resource planning software company, then decided to move back to the United States. "We went there mostly for the opportunity to get some experience working in the European software industry and to travel and experience a bit of Europe before we settled down more permanently in the U.S.A.," says Engelsma.
Next, Engelsma enjoyed a 16-year stint working in research for Illinois-based Motorola, telecommuting from home in West Michigan. He and Mieke have seven children (the youngest, twins, are five; the oldest is 15).
"I like the Grand Rapids area because it's family-friendly," he says. "There is a lot more going on here technology-wise than many people realize. There is enormous potential. There are small mobile technology companies and software companies that are forward-looking and have a community focus."
Student team member, Alejandro ("Alejo") Montoya is a graduate of Eafit University in Columbia. In addition to his studies at Eafit, Montoya came to GVSU with substantial mobile development experience. Montoya arrived in West Michigan this past January, in the dead of winter, and was promptly whisked to the mall to buy a winter coat and boots.
All three students have landed prized internships: Zavitz at Dow Corning in his hometown of Midland.; Roth at Grand Rapids-based Atomic Object; and Montoya at Electronic Arts in Los Angeles. Zavitz has also received a scholarship to study in London, England.
Of his student teammates, Engelsma says, "We need to make Grand Rapids attractive to keep students here after graduation. We're trying to create a vibrant environment and offer challenging projects so that people of this caliber will want to attend GVSU and stay in the community."
Victoria Mullen is (in alphabetical order) an actress, artist, attorney, photographer, and writer based in Grand Rapids. She is originally from Milwaukee, Wis.
Matthew Gryczan is the managing editor of Rapid Growth magazine.
Jonathan Engelsma (2)
Jonathan Engelsma, student team (2)
Alejandro Montoya, 28; Greg Zavitz, 19; and Joseph Roth, 20
Photography by Brian Kelly -All Rights Reserved