PayPal Jumps to Your TV With Comcast-TiVo Shopping Collaboration

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PayPalPayPal has come a long way -- and now it's back in your living room.

eBay's (EBAY) popular online payment system is working on new ways to make financial transactions possible right from your TV.

Bloomberg is reporting that DVR pioneer TiVo (TIVO) and leading cable provider Comcast (CMCSK) are working with PayPal to let consumers engage with the ads that they're seeing on television. If you think QVC and Home Shopping Network are state-of-the-art, just wait until you see what PayPal has in store.

There's Finally Something Good on TV

Wouldn't it be cool if when a political ad or a charity spot comes on, you could donate to the cause without leaving your armchair? It certainly would be neat if you could buy an advertised product right on the spot, right? If a commercial for a new car or a breakthrough medication hit the airwaves, wouldn't it be great if you could seamlessly use your remote to have advertisers send you more information through your phone?

PayPal Vice President Scott Dunlap is telling Bloomberg that all of this may be possible as early as this fall.

We've Been Here Before

If you've been watching TV lately, you've probably seen the Shazam logo show up on some ads. It's an invitation for smarpthone owners with the Shazam music-recognition app to fire up the program to receive more information on the product being advertised.

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TiVo teamed up with Domino's Pizza (DPZ) three summers ago on a cutting-edge application. Whenever a Domino's commercial popped up, TiVo owners would be able to order up a delivered pizza right from their TV screens using the TiVo remote.

The summer before that, TiVo joined forces with Amazon.com (AMZN) for another TV tech partnership that was ahead of its time. Folks watching Oprah Winfrey or Stephen Colbert talking up a book would be able to buy the featured read using only their remote control.


Picking Up Where TiVo Left Off

What's the difference between TiVo back then and PayPal teaming up with TiVo today? Well, TiVo itself only has 2.5 million subscribers. PayPal, on the other hand, closed out its latest quarter with 109.8 million active registered accounts.

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PayPal Jumps to Your TV With Comcast-TiVo Shopping Collaboration

Expect to see these gain popularity over the next 12 to 18 months. Augmented-reality apps offer consumers rich content -- be it on an item's features and benefits, or information that compares and contrasts various products to help shoppers make better on-the-spot, informed shopping decisions.

So in theory, a supermarket shopper with health issues debating between several cereal brands could tap an augmented-reality app to pull up product information and "compare this product versus three others," Fry says.

And AR apps will likely move beyond the supermarket aisle: There are whispers that Walmart (WMT) and Best Buy (BBY) will soon be launching augmented-reality apps.

These apps are one way retailers are fighting showrooming, when shoppers use brick-and-mortar stores as showrooms to check out potential purchases, only to buy later from online merchants at a lower price, Fry says.

"Information is value. Consumers aren't just buying on the basis of the lowest-possible price, he says. "Augmented reality apps will allow [retailers] to make a showroom that Amazon [for example,] will have difficulty duplicating."

Fry says augmented reality-apps offer a more sophisticated evolution what retailers have been attempting with QR codes, the black-and-white matrix bar codes that have been popping up on everything from product displays to store windows.

Lusting after a cool blouse or a sleek flatscreen TV but can't justify paying the steep price? Well, just as sites like FareCompare.com alert travelers when airfares drop, clothing store Bebe (BEBE) and Best Buy now offer apps that will alert shoppers when an item goes on sale.

"Essentially, by using the retailer's app, a user can mark an item as a favorite and choose to be alerted when the product goes on sale, or reaches a price point specified by the user," Scott Gamble, vice president of digital solutions for AllianceData, which issues retail credit cards for stores like J. Crew and Pottery Barn, tells DailyFinance. "Specialty, electronic, and hard goods retailers would be most likely to implement this type of tool moving forward."

Alliance Data is now developing a "virtual gifting" mobile tool that it plans to launch as a pilot program later this year.

"The general idea behind this capability is that it would allow a cardholder of one [retail store] brand to send a virtual 'gift card' via a mobile device to another cardholder of the same brand," Gamble says. "The gift could be redeemed in-store via the recipient cardholder's mobile device. Women's specialty retailers will likely be among the first to launch this sort of tool."

While the jury is still out on how tablet computers will ultimately figure into the shopping experience, retailers are already starting to capitalize on tablets' advantage over smartphones, most notably, their larger screen size.

Retailers are now leveraging tablets to help consumers do more than simply make purchases; the goal now is to help people solve more complex shopping problems like how to redecorate a room or piece together a wardrobe. The right tool for those project-sized tasks: Magalogs, hybrid magazine/catalog mobile sites that offer how-to advice and rich content, Fry says. "It's about providing better context to make it easier for shoppers to purchase from these retailers," he says. The consumers can conceivably use retailers' mobile magalogs to walk them through a project in a store. They'll use their tablets to "give me ideas and tell me how to execute a project," Fry says.

Cosmetics chain Sephora, for one, announced this week the test roll out of iPads to 20 stores, where they will give shoppers another way to navigate the retailer's thousands of products and interact with the menu of services offered by its Beauty Studio.

Sephora just updated its online and mobile sites. Now, each product on Sephora.com is tagged and indexed with 25 different characteristics, from data like target age group, to specific ingredients, formulations, fragrance, price and more, in a bid to offer shoppers a targeted, personalized shopping experience.

Some women's apparel chains are strategically placing QR codes in their stores -- in fitting rooms, for example -- so that shoppers can sign up for store credit cards on the spot, assuming that the shopper has both a camera and a QR-code reader on their smartphone.

A shopper can scan the QR code, which connects them to the retailer's mobile-optimized website, where they're asked a few questions to apply for the store card, Gamble says. If qualified, "they would receive approval within a minute or less."

"The QR code makes the application process very quick and convenient for the customer and, upon approval, almost immediately specifies their buying power -- their credit limit -- so they can immediately take advantage of the benefits of instant discounts and rewards that typically come with the initial card purchase," he says.

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PayPal can use its mainstream appeal to get larger cable providers and satellite television companies to play nice with the possibilities. Advertisers will love the ability to improve their chances of closing the deal on their ads, and that naturally will mean good things for broadcasters and networks that will be able to command more ad revenue.

We've had smartphones for years, and now we're finally at the age of the smart television -- though ultimately, it will still only be as smart as the decisions that viewers make when they use it.

Motley Fool contributor Rick Munarriz does not own shares in any stocks in this article. The Motley Fool owns shares of Amazon.com. Motley Fool newsletter services have recommended buying shares of eBay and Amazon.com.

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