By Brad Stone and Barrett Sheridan

Browse the BusinessWeek Archive

Starbucks mayors received $1 off frappuccinos in a deal that ran through mid-summer

The battle between online and brick-and-mortar retailers has, until now, been a lopsided fight. Internet stores enjoy the paradigm-busting advantages of the Web, like the ability to personalize deals to shoppers and offer on-the-spot price comparisons. Offline retailers, by contrast, may never know anything about a shopper who walks in, pays for a single item, and walks out the door.

Over the past year tech entrepreneurs have raced to correct this imbalance and extend digital efficiencies to the physical world. Internet services such as Foursquare, Gowalla, Booyah,...