Finding out if digital coupons will really work

Dave Beebe knows that Silicon Valley was built on research and development.

He knows this as he scurries up and down the aisles at the local Lucky supermarket in search of a box of Hamburger Helper Microwave Singles — Stroganoff Flavor.

"No one I know will actually admit to eating it," says Beebe, product-marketing director for Ecrio, a Cupertino, Calif., company that develops add-on services for mobile phones.

But this isn't about pleasing the palate. Before Beebe left Ecrio, he loaded a digital coupon for $1.10 off the dinner helper onto a prototype gizmo that looks like a thumb drive with a blinking light.

Working from a recipe a touch more complicated than those on the back of the supper-in-a-box, the gadget translates coupon bar codes loaded from the Web into quick light bursts that trick supermarket scanners into thinking they are reading the coupons themselves.

The ClipPod

Point the so-called ClipPod at a scanner, press a button and bingo, the coupon savings is deducted from the grocery total.

This part of Ecrio's research budget, with line items for Nature Valley Crunchy Granola Bars, Edge Sensitive Skin shaving gel and Nestlé Treasures Dark Chocolate Truffles, is all about the next little thing — about testing the schemes and dreams of a company that has so far focused on bringing mobile-communications applications to the Japanese market.

The R&D story plays out in Silicon Valley every day. It's not enough to have an idea that sounds cool. In order to amount to anything, the cool idea has to work and it has to be something that your customers want.

Beebe and others at Ecrio don't hide their R&D in some tilt-up along the freeway. They take to the supermarkets and superstores in which coupon-wielding consumers do battle.

They stride up to cashiers, perfect strangers who want nothing more than to do their jobs, and ask them to bend the rules in the interest of advancing consumption. Just let me point this doohickey at your scanner and knock a couple of bucks off my bill.

"It's usually met with, 'Say what?' " says Beebe, a bearded man who's the size of an NFL linebacker. "Which is quickly followed with, 'I'll have to check with my manager.' "

Sometimes checkers tell them to get lost. Sometimes they meet the request with a shrug and a "whatever." And, this being Silicon Valley, sometimes they get it.

"The best was Best Buy," says Larry Loper, Ecrio's marketing vice president. "There's a 21-year-old geek at the checkout. He just wants to know where he gets one."

Big vision

Ecrio has a big vision and some ideas for smaller steps to get there. One day, Beebe says, the company would like to have its coupon technology on millions of mobile phones. They'd like to eventually load gift cards and event tickets onto the phones, too.

The company hopes to make its money by taking a cut of the fees retailers and manufacturers now pay to manually process coupons once they're used as payment.

But Ecrio needs to persuade mobile-phone makers, wireless carriers, retailers and manufacturers to play along.

For now, Ecrio plans to take a halfway step this summer when it releases the ClipPod, a key-ring fob. Initially, the fob will work at specific retail chains, which will distribute them to shoppers for nothing or next to nothing.

One person who might be in line for the gadget is Monica Barbaria. She works the express checkout at Lucky. Beebe, Hamburger Helper in hand, approaches her line with his line.

"I hope you're going to let me do a test with a new technology," he says, proceeding as if the answer were yes.

Ready.

Aim.

Fire.

Blip-blip. Barbaria's screen with the running grocery tally flashes $1.10 deducted from the bill.

"Wow," Barbaria says. "That's awesome."

Oh yeah. She gets it.

Mike Cassidy is a columnist at the San Jose Mercury News.