Regular readers know that while I believe mobile shopping will become important over the next couple years, I’m just not that excited about it right now as I don’t think the market is ready. However, there are some innovative companies working on smart applications. Over the next couple years, these solutions will get a lot more advanced and some might even be widely adopted.

Following is my Q&A with Slifter’s CEO and Founder, Alex Muller…

Introduction…
“GPShopper makes your cell phone the ultimate shopping tool. We enable a consumer to look for, find, and purchase a product whenever and however he wants. Internet sales are growing fast, but the vast majority of sales are still in bricks and mortar stores. Pay per click (PPC) marketing is great for online marketing. GPShopper wants to bring PPC marketing to the cell phone. We can bring the benefits of tracking and ROI to bricks and mortar locations.”

“By 2015, ecommerce will have 15% of the market, according to one study. 85% of commerce will still occur in bricks and mortar locations. At the same time, cell phone penetration high. So the question isn’t if we’ll see a shift to cell phone based shopping, but when we will see the shift.”

So how does this work?
“The best way to deploy content on cell phones right now is through applications. Our online java based application streams the content onto your cell phone. It works with T-Mobile, Sprint, and Cingular. Verizon works on BREW, and we’re developing a solution for that system. Nevertheless, Verizon, Blackberry and TREO users are automatically routed to the wireless web version of our application.”

“Using a shortcode is a middle step for those people who don’t have data services on their phones.” Type in the product and zip code and text message to ‘95173’ to see where you can buy the product and for how much.”

“The links that are returned are paid links. For both the mobile and the web-based application, we’ll show you the price from and distance to multiple stores. You can then click through to see a retailer’s information – name of store, phone number (linked so you can automatically dial), and maps. You can save that item to your shopping list and/or send it to friends via text message. We consider this a very viral feature.”

“If you do a search from the phone and see something listed as an “Online” product - you can automatically send the product link and information from your phone to your own email or a friend’s email. If you or your friend clicks on that link, it’s like clicking through on an affiliate deal.”

“We’re way ahead of the market – people have said that they will go wireless for years. We want to nail down the technology now and position ourselves correctly so that by 2007, 2008, or 2009, we can be an acquisition target.”

What about GPS?
“We are talking with a number of providers and are looking to pilot a location aware application of the product – we have to have it in place and tested well before Christmas. Another feature will be releasing is SKU level location aware product alerts. Consumers will be able to opt-in to receiving alerts if they are nearby a store that carries one of their shopping list items in stock.

How many retailers are signed up? How many online stores are signed up?

“We are in trial with CompUsa, Circuit City, Best Buy, FootLocker and several smaller independent local stores. We’re giving a couple months of free usage, but some small walk up retailers are paying $0.30 – $0.50 per click. We have data for over 3000 locations. Additionally we have affiliate deals in place with over 50 online retailers like Overstock, Buy.com, Shop.com, Tech Depot and many more”

Tell me more about the revenue model…
“We think the ideal model on Slifter is pay per click, and in the long run, we’ll have an auctions process. We display locations where the product is available and if someone wants to know store details, there’s a click fee. In the end, there’s probably a much higher average order value for the local store because of this process; when you’re searching from your phone, you’re going to be less price sensitive because distance and availability is more important. You need this product and you need to buy it this weekend; Slifter is the step right before the person comes into the store.”

How does shortcode marketing play into Slifter?
“Our product brings the convenience that internet marketing has brought to the online world, where you’re always one click away from the purchase process. Shortcodes allow you to do the same thing. When you add a shortcode to a billboard, a consumer could immediately receive a text message that tells them more about the product, including where to buy it. From the advertiser’s perspective, you’re also get an analytics component where 95% of purchases are being done, but up until now these tracking tools weren’t available. With shortcodes through Slifter, you can see how many people downloaded the application, how many people sent it to their friends, how many friends opened it, which products are most viral, which billboards are most effective, etc.”

“On the general application, we can show retailers how many times someone searched for their products, how many times the stores came up, etc. We can even deliver a price/distance sensitivity map - will someone drive an extra 5 miles for a 10% savings.”

So how are things going so far?
“Over 10,000 people have downloaded the application, and we haven’t done any marketing.”

“With the FootLocker test, a text message was sent to 20,000 cell phone numbers from a FootLocker in house list. We can’t discuss the results right now, but this was a very viral campaign. One guy from NJ sent a message to another guy in NJ about the Nike Retro Air Jordans saying “these shits hard” which is slang that Footlocker can’t use, but when a shopper says it and sends it along in a text message, the ad is very targeted and very viral. This is just one example of Slifter at work.”

Where are you with financing?
“We raised an angel round, and we’re currently talking to a number of VCs.”

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