IBM Corp. is building a new augmented reality shopping app designed for store retailers, the company announced today. The app uses image recognition technology to take input from the video camera on a smartphone or other mobile device and identify the products it ‘sees’. The app then acts as a shopping tool.

For example, if a consumer is searching in a supermarket for sugar-free breakfast cereal on sale, the app can look at the cereal aisle, point out the five boxes that meet the criteria and rank them by price or popularity among her Facebook friends—perhaps even offer up a store coupon on the fly.

Unlike apps that scan bar codes or QR codes, the augmented reality app can take in products whole aisles at a time, identifying items at various distances and angles as a shopper sees them. The information displays changes as the consumer moves based on what she is looking at or her set preferences.

In addition to increasing customer loyalty, the app may help physical retailers embrace rather than fight mobile shopping, says Paul Papas, global Smarter Commerce lead at IBM. “For me this app is arming retailers in the war against showrooming,” Papas says. Showrooming refers to consumers researching products in stores and then buying online, whether at home via a PC or using their smartphones while still in the store.

IBM is still working out the kinks of the app, such as whether a retailer will buy a branded version of it to share with customers or plug into a standard application that customers download from IBM. Retailers who use IBM’s Smarter Commerce software will be able to automatically feed in information about inventory and merchandising from their back-end systems. The app will work on multiple types of devices, such as Android and iPhone smartphones and tablets.

For now, the app is still in prototype at the company’s research lab in Haifa, Israel. IBM declined to say when a beta version will be released.

Customers will download the app when they enter a store and fill in some information, such as their preferred price ranges, food allergy constraints, or whether they like to buy so-called “fair trade” goods. They will be able to register with either a telephone number, customer loyalty card number or social media sign in.

The image recognition technology looks for specific letters, shapes and colors, the category of store aisle—for example ‘baking needs’ in a grocery store—and both the distance and angle of the object, putting all the information together to give a fast response. Customers do not need to focus, zoom or scan for the app to work. “You don’t need to put your nose next to the bar code and wait for some information to load,” Papas says. Instead, he says, the information appears instantly while strolling through a store.

“For us the motivation was recognizing all the changes that were going on in the mobile and social world and how that was impacting how customers are looking to shop and engage with retailers,” Papas says.

IBM says it plans to begin testing the app in stores soon.

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