As Finovate 2012 kicked off this week in San Francisco, one of its past presenters, Bankons, was scooped up by CapitalOne. Bankons offers its users merchant-funded discounts based on their spending history, and now it is part of CapitalOne’s Digital Innovation Lab. Clearly many see great promise in this leveraging of consumer data to help retailers compete with online giants like Amazon. Finovate 2012 has two more companies banking on the same — will this work?

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Early on Tuesday at Finovate, Affinity Solutions announced the launch of a rewards program called “coupon-on-a-card,” which allows consumers to “either pre-purchase or opt-in to a retailer offer and then receive the discount at the point of sale through the credit card swipe…in real-time.” So it’s not a geolocation-based offer, but similar principals are at work. Affinity is attempting to make brick-and-mortar shopping more appealing to an audience that is getting accustomed to shopping online.

edo Interactive presented later on Tuesday, showing off their new geolocated rewards technology. edo’s technology allows merchants to make offers personalized, and push them through credit and debit cards as well as mobile devices. Furthermore, edo launched a new feature that allows customers to get nearby deals at checkout. So, if you’re at your local hardware store, they may alert you to an offer at your local cheesemonger. This could potentially work wonderfully for Business Improvement Districts and malls to invest in, as both have vested interest in seeing their tenants’ businesses grow.

Like window shopping, with a phone

These are certainly interesting products, but whether these innovations will ever take hold with consumers is another question entirely. In fact, it was the subject of an interesting article in the Wall Street Journal on Wednesday. Ever since last year, when Amazon launched its Price Check application, which feeds competitive online prices to users who scan barcodes in physical retail stores, retailers have come to realize that smartphones are working against them. Customers can waltz in, look at their wares, and find a better price online and leave — this is called “showrooming” according to the Journal.

So, the Journal explains, retailers are trying “desperately” to use mobile location-based coupons to combat this — this is called “geofencing.” The problem, however is that consumers are not only more accustomed to using their smartphones to stores’ disadvantage, but also that “geofencing” can be invasive as a marketing tool. Imagine walking around somewhere like SoHo or Williamsburg as you’re trying to meet up with a friend, and having your phone buzz with advertisements every few steps. A dream for retailers, but a potential nightmare for anyone who uses their phone for, you know, staying in touch with their friends.

The truth lies in the numbers:

Some 15% of respondents to a recent survey said they use their mobile phones in stores to compare prices to online-only rivals, according to market research firm Forrester Research. But fewer consumers use their devices in ways that could be beneficial to brick-and-mortar retailers: 8% of respondents said they used their phones to “check in” to stores, and 7% said they used phones to learn about in-store promotions or events.

Still, approximately “3.4 billion mobile coupons were redeemed in 2011 globally, according to Juniper Research.” That’s one for every other person on the globe, which seems at least a bit high, especially considering just 7 percent of Forrester’s respondents claimed to use them.

But if Juniper Research’s figures are accurate — we triple-checked, and the WSJ wrote “billion” and not “million” — there is promise in this market. And it’s a promise we should all be invested in. After all, as consumers we really do have the power to vote with our wallets. Either we will vote to have retail corridors that are little more than showrooms — and guarantee the demise of physical retail within, say, a decade — or we can work with retailers in order to keep them around in an era when Amazon would be happy to keep us all on our couches.

So while edo Interactive and Affinity Solutions’ might not appear to be that useful to you or I just yet, it’s a serious sink-or-swim problem for retailers, especially in the sprawling United States, where a trip to the mall could mean battling traffic and high gas prices. Shopping has taken on some ethical baggage, which is unfortunate for consumers, but retailers need to learn how to harness this to their advantage.

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