Special in Aisle 5: Cybermoola

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Cybermoola, a provider of cash-based payment for shopping on the Internet, announced last week that it is allying with supermarket chain ShopRite.


Cybermoola allows consumers to purchase prepaid cards or receipts that enable them to make purchases online. This product is valuable for teens and other consumers who do not have a credit card. Once they purchase the card, all they need to do is type in a serial number to make payment.


To reach as many consumers as possible, the company has been trying to partner with major offline retailers. ShopRite is the first grocery chain to make the currency available.


"The supermarket is a great place to sell our product. A lot of people go to the supermarket each week and make their purchases in cash," said John Young, vice president of marketing and co-founder of Cybermoola.com, San Francisco.


Beginning Aug. 13, the currency will be available in 190 ShopRite stores in New Jersey, New York, Pennsylvania and Delaware.


Consumers can purchase Cybermoola at checkout. They tell the clerk how much they'd like, and a receipt with a 16-digit unique serial number is printed using Catalina Marketing Network technology. Shoppers can purchase denominations of $20 to $100 and then activate their account by going to Cybermoola.com.


"It's great for the retailer because they have no inventory to worry about. They can print on demand," Young said.


Though this seems like a great idea, one analyst sees flaws.


"Teens are not into grocery stores. They'll only go there under duress. They like shopping for those fun, discretionary things like recordings, electronics, clothes and beauty products," said Richard Leonard, vice president of Zandl Group, New York, a trend-consulting firm that covers the teen market.


Young disagrees. "We were actually really surprised to find the supermarkets were the second most frequently visited retail destination among teens," he said. "It's right up there with discount chains."


Regardless, teen-agers rarely buy online, Leonard said.


"I've seen industry data that says only one in five teens has ever purchased anything online, even though two out of every three have Internet accounts at home. They're doing a lot of research online and then going into the stores for their purchases. If it's apparel they want, they want to see it, feel it and try it on. If it's CDs, they like the immediate gratification of going to Tower Records and getting it there."


There are benefits to the Internet that the shopping mall will never offer, said Young. "The value that we're proposing for that group is that it allows them to get the full selection you get online that you don't necessarily get at the mall. And, people do live in areas where it's not super convenient to hit the CD, book and clothing store in one trip."


Young also noted that the product appeals not only to teens but also adults. "There are an awful lot of consumers that don't have credit cards or don't want to use them because their balance is too high. We're evolving into a larger market focus as the company grows."


The site also announced a partnership with Footaction USA stores in the Dallas area last month. The stores will sell pre-packaged Cybermoola debit cards.


Cybermoola has partnerships with 35 Web sites that will accept its currency, including BarnesandNoble.com, CDNow.com and REI.com.
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