Where the rest of us see subway walls, Tesco's South Korean supermarket chain Home Plus sees grocery shelves. In a trial run, Home Plus has plastered a subway station with facsimiles of groceries, labeled with a unique code for each product. As commuters pass by on their way to work, they can use a mobile-phone app to take pictures of the products they want, then check out. The groceries are automatically delivered to their doorstep by the end of the work day.

The virtual grocery store has been a hit among more 10,000 customers, with Home Plus reporting a 130 percent increase in online sales. The experiment is just one of the increasingly innovative ways mobile devices are being used in retail. Location-based smart-phone advertising is seen as a potentially valuable way to reach new customers. Some companies in the United States are also using indoor positioning technology as a way to guide shoppers to products and show them special offers. And software makers are exploring different ways of paying for products by smart phone.

In Home Plus's virtual store, each image of a grocery item is accompanied by a quick-response (QR) code, a boxy geometric image that encodes data—the product and its price. When each code is scanned, the item goes into an online shopping cart. Customers then use their phones to pay before hopping the train to work.

People have long been able to scan QR codes with their smart-phone cameras to access whatever information the code holds. And online grocery shopping has been around even longer. Still, the grocery industry has seen little technological innovation since the implementation of the universal product code (UPC) bar code in the 1970s. As of 2008, the U.S. Census Bureau reported that just 0.2 percent of the food and beverage industry's sales were made online. This new strategy could allow retailers to target highly specific audiences. The success of Home Plus's project may prompt other retailers to think about new approaches to shopping that could cut overhead expenses.

Whether or not virtual markets catch on, some experts think radical changes in shopping are right around the corner. "For sure, your cell phone will be the graphical user interface to the shopping services," says Abel Sanchez, research lead at MIT's Intelligent Engineering Systems Laboratory. "Think of the early days of the Web versus today. In the early 1990s, the Web was one way, like a paper book. Today, the Web is full of interaction; it's how we do our jobs. I think the supermarket will go through a similar transformation."