New Device Links Shoppers to Local Stores
If your grocery store gave you a free Internet telephone that allowed you to shop online--without a computer--would you take it? Albertson’s Inc. thinks you would.
The 2,500-store chain is working on a deal with a small Irvine Internet communications developer, HomeAccess MicroWeb, that could put such appliances in West Coast homes by the end of the year.
Along with regular features, like voice mail and call waiting, the telephones will contain computer chips that provide e-mail and limited Internet capabilities. The phones come with small black and white screens and retractable keyboards that link consumers directly to local vendors.
A hand-held bar code scanner, just like the kind used at the supermarket, would turn the appliance into an at-home grocery store. Just scan that empty can of Campbell’s soup before tossing it out, and it would be added to your next grocery order.
“We believe that e-commerce is no different than real world commerce. It’s all location, location, location”--and that spot is your kitchen, said Mark DiCamillo, chief operating officer of HomeAccess.
Shopping center operator Macerich Co. in Santa Monica, which owns stakes in Westside Pavilion, Santa Monica Place and Marina City Center, among 53 centers, also is working on a deal with HomeAccess.
Its Web phones would link customers to the mall shops, a bonus for mall owners like Macerich that generate some of their profits by taking a cut of each stores’ receipts.
“We don’t see people shopping the stores . . . over the screen phone, but we do see people potentially ordering food to be delivered or reserving and buying movie tickets,” Macerich President Arthur Coppola said.
Although the real estate investment trust has yet to make a financial investment in HomeAccess, he said the company has had several hundred hours of talks with the company about its potential.
“We see it as a very powerful and cheap advertising mechanism for us,” Coppola said. “If we can have our merchants e-market to the 20,000 people that live within five miles of one of our malls . . . it clearly is going to be a very good communications device for us.”
Customers still would have to pay for their regular telephone service, but the cost of the phones would be partly or fully covered by participating merchants, who would benefit from entree into customers’ homes in return.
In Albertson’s case, for example, the phones would be free if customers commit to spending a certain amount on groceries every month, DiCamillo said. The Boise, Idaho-based chain is exploring options for how to employ the technology, including delivering orders or having them ready for customers to pick up.
As with most e-commerce, though, the service is not without strings, which mainly raise privacy concerns. When the phones are not in use, their display screens will feature a running stream of advertisements from supermarket specials to movie schedules. Close to dinner time, they could feature restaurant specials and come-ons from the local pizza parlor.
Their purchases will also be monitored and analyzed by vendors, who then would customize ads for each member of the family.
HomeAccess founder and Chief Executive Jerry Conrad said he got the idea for the service while monitoring the deregulation of the utilities industry: “Utilities are transmitters, and billers, and are traditionally strong corporate citizens.”
Conrad is a former software developer for the aerospace industry who has founded and sold several companies. He funded HomeAccess from its inception in 1996 until DQE Inc., a Coraopolis, Pa., power and water utility, became a major investor.
In a complex deal last month, DQE invested $7 million in Coyote Network Systems Inc., a Los Angeles telecommunications company that is expected to be merged with HomeAccess. Coyote’s name will be changed to Quentra Networks Inc. when the deal closes, and it will manage the telephone networks for HomeAccess.
The deal, and the relative simplicity of the HomeAccess product, have garnered positive attention from market analysts.
Quentra could achieve an e-commerce relationship “without the consumer intimidation levels” of personal computers, according to a report Thursday by analyst J.P. Mark at First Security Van Kasper in San Francisco.
“While numerous companies have single or even multiple pieces of the e-commerce puzzle,” Mark wrote, Quentra is the first that would allow anyone to use the Web, “regardless of computer literacy.”
The first HomeAccess Web phones will be rolled out in Albertson’s stores in Seattle this year. That will be followed in Pittsburgh to DQE’S utilities customers and in Portland, Ore., through the utility firm Portland G.E. The products are expected to reach Southern California in the first half of next year through Macerich and Albertson’s.
