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MELISSA BLOCK, HOST:

This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.

ROBERT SIEGEL, HOST:

And I'm Robert Siegel. Now, a dispatch from the front lines of the mobile shopping revolution. Consumers armed with smartphones and tablets are changing the way stores market set prices and track customer tastes. And as NPR's Steve Henn reports, brick-and-mortar retailers are worried.

STEVE HENN, BYLINE: Best Buy lives in fear of this guy.

AVE LISING: My name is Ave.

HENN: Ave Lising and a group of his friends were walking through Stanford Mall last week, their cell phones clutched to their hands. Recently, Lising was shopping for a video game.

LISING: Went to Best Buy, looked at the prices. Like, yeah. I'm sure I could find this cheaper online.

HENN: So he whipped out his smartphone and scanned the bar code.

LISING: Found it cheaper, so...

HENN: There's a word for this kind of in-store comparison shopping.

BRYAN WARGO: People are being what's called show-roomed.

HENN: Bryan Wargo is co-founder of a start-up called Nearbuy Systems.

WARGO: Everyone knows they're being show-roomed, but they don't know by who, for what products, when it's happening, what type of consumer does that.

HENN: When you shop online, marketers are following every click, but when you walk into a store, they know almost nothing about you. What retailers want is information and inside a drafty warehouse in Menlo Park, less than a mile from Facebook's sprawling new headquarters, Wargo's company is using mobile technology to try and give it to them.

WARGO: It's tracking my iPhone right now, so it's using Wi-Fi, which gives up about 10 meters of accuracy.

HENN: Marc Jamtgaard is Nearbuy System's chief technology officer and co-founder.

MARC JAMTGAARD: Wi-Fi can make large errors and so we're augmenting that with the video surveillance system that's in this warehouse.

WARGO: So our challenge was, take what we already have - and most stores have Wi-Fi and they have video for security and things - and kind of mix those two signals together to come up with something that's more accurate.

HENN: Wargo and Jamtgaard have created a mock-up of a big box retail store. There are fake shelves. The floor is laid out in a grid with blue masking tape and there's a network of security cameras overhead. But instead of tracking real customers around this space, they're tracking a group of little robots.

Like one of those little vacuum robots?

JAMTGAARD: It's not quite the vacuum robot, but it's a little - it has a Web interface and a little video camera so you can see where you're going and you can drive around.

HENN: All right. You've got to break this out for me.

Those robots spend hours cruising around, towing cardboard cutouts of stormtroopers and Boba Fett holding iPhones.

That's awesome. All right.

Wargo and Jamtgaard use this technology to track their stormtroopers - or real people - to within a couple of feet of where you're standing. Retailers could use this to build an app to guide customers through their store aisles to specific products or even deliver discounts and coupons based on where you're standing in any particular store.

JAMTGAARD: The vision everyone has for this technology is that, you know, you walk in front of the sodas and then Coke and Pepsi in the background are going to bid up to figure out who can send you that coupon.

HENN: This technology could also let stores know if you're on your phone checking prices or even buying something from someone else. It could give those retailers who are being show-roomed a fighting chance to win back your business before you walk out. It could save you money, but Wargo says...

WARGO: People need to opt in. People need to agree to be tracked or help provide location-based services or we're not going to do it.

JULIE ASK: I think you're really walking a fine line there.

HENN: Julie Ask is a mobile marketing guru at Forrester Research. She says most new mobile shopping apps are making more or less the same bargain with their customers.

ASK: Between how you use the information that you have about consumers that you've collected in a way that seems helpful, that adds value, that makes me smile and say, yeah. You know what? I'm having a better day. I like this. This helps me today versus something that seems very creepy, as if I'm being watched or followed.

HENN: Ask says, when you get this trade-off right, consumers love it. She's totally comfortable scanning her prescriptions into a mobile app created by Walgreens.

ASK: This is about refilling a prescription in less than 20 seconds.

HENN: Back at the Stanford Mall, Ave Lising and his friends agree. Fandango has an app that tracks your location everywhere you go.

LISING: And it'll tell you movies starting within an hour nearby you.

UNIDENTIFIED MAN: Which is cool. That would be helpful, for sure.

HENN: Most customers are pretty comfortable giving up all sorts of sensitive information, or not so sensitive information, if they feel like it's being used to help them and believe it's not going to be abused. So, right now, brick-and-mortar stores are trying to figure out ways to get all of us to share more and more personal details through our mobile devices as we shop.

Steve Henn, NPR News, Silicon Valley.

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