Monday Mar 02, 2015

Payment Consolidation

What do you get when you add the following pairs?  Samsung+LoopPay, Google+Softcard, PayPal+Paydiant?  Answer: Viable ApplePay competitors.

First everyone and his brother had a mobile payment solution, then a select few rose to the top and got acquired.  The cycle goes like this: innovation, consolidation, standardization.  In this case, there's room for multiple standards, but not too many.  When the music stops, somebody will inevitably be left without a chair.  Today I feel like that's Samsung.

Google wants to play by established rules, but for the longest time telcos weren't letting them in the game.  Their recent agreement with the backers of Softcard now level's the playing field.  I think their ultimate strategy is the obvious one: advertising.  Being part of offline transactions gives them access to the customer's eyes and intentions.  Combine that with their existing online efforts and you have omni-channel marketing.

Approaching from a different angle, Apple is constantly looking for ways to remove the friction in everyday lives.  Their focus is on the user experience of payments, making sure its as smooth and simple as possible.  This either drives sales of existing devices or creates new markets.  With ApplyPay they'll sell more iPhones and create a new market by eventually charging fees (that consumers won't see directly).  They managed to dodge the telcos and get the backing of the banks, but that's no surprise given their track record in other industries. 

On the other hand, PayPal is more aligned with the merchants so their acquisition of the MCX technology-provider makes lots of sense. Their goal is to offer an alternative to swipe fees that satisfies both consumers and merchants.  Their work with Discover, beacons, and their Square-like fob are seeing some success with smaller retailers.  The ability to create orders and do person-to-person payments also sets them apart.

Then there's Samsung, the smartphone manufacturer.  LoopPay has very cool technology that transmits the card data to an existing magstripe reader through the air.  So for terminals that don't support NFC, the consumer can still put the phone within 3 inches of the magstripe terminal and send the card data.  That means that generally every existing merchant can already accept SamsungPay.  But there are two issues.  First, I'm not confident this system works 100% of the time.  And second, its predicated on dying, insecure technology.  Clearly Samsung isn't worried about either of those issues.

All these moves coupled with the occasional security breach makes this space very exciting.  Sit back and enjoy the ride.

Friday Feb 27, 2015

Is Mobile Over-hyped?

Don't get me wrong; I think mobile has and will continue to have a huge impact to the retail industry.  It's just that sometimes we get swept up by the shinny new object and neglect the basics.  Less than two years ago Marc Andreessen declared that stores were dead, yet they still typically represents more than 90% of a retailer's revenue.  Investments may not track contributions exactly, and that's understandable.  We just can't let the ratio get too out-of-sync.  Put another way, a meal consists of main dishes and side dishes.  If the chef neglects the side dishes the meal won't be ruined, but the converse is not true.

After the holidays I kept seeing stories about mobile traffic doubling or tripling, so retailers were upping their investments.  But we need to put that in perspective.  Even with huge growth, mobile is still not as big as PC traffic. MarketLive estimates PCs account for 56% of website traffic, and more importantly, 75% of the revenue.  See the chart at the left from e-Marketer, which also shows average order value from PCs is higher too.

I trust actual metrics much more than the surveys that ask questions like, "have you purchased something from your smartphone in the last six months?"  Few haven't, but often they're small, infrequent purchases so it tends to overweight the results.

And there's a big difference between browsing and buying.  As you can see below, shoppers often are doing research on their mobile devices then completing the purchase on their PC.  The PC has a definite advantage when it comes to conversion.  From my own experience, I rarely buy on my mobile phone but split purchases between my tablet and PC.  After all, today's tablet is basically as powerful as our PCs.

Infographic: Smartphone Shoppers Rarely Close the Deal | Statista
You will find more statistics at Statista

So back to the original question, is mobile over-hyped?  No, its hugely important to the retail business, and customers have come to expect top-notch experiences on their mobile devices.  But don't get distracted to the extent that the basics get underfunded.  The "main dishes" of retail are what continue to bring in the majority of sales.

Wednesday Feb 25, 2015

Eight Things Retailers Need to Know About EMV in the US

If you’ve received a new card from your bank in the last six months, it’s likely an EMV card with a chip.  Banks are issuing EMV cards, and retailers are installing EMV-capable terminals to accept those EMV cards.  Both are working toward the October 2015 deadline whereby the liability shift occurs.  Today, when a counterfeit card is used in a store, the bank takes the loss.  But after the liability shift, if the bank has issued an EMV card, but the retailer has not upgraded to an EMV terminal, then the retailer takes the loss resulting from counterfeit cards.

In that scenario the bank has done its part but the retailer hasn’t – so the retailer is the weakest link and takes on the risk.  If the retailer has an EMV terminal, but the card is not an EMV card, then the risk goes back to the bank since it’s the weakest link.

Most retailers understand the situation and have carefully weighed the risk versus the cost of upgrading terminals.  But there are many other nuances with the EMV migration.  Below are eight things every retailer should know:

1. If you’re not already testing EMV-capable terminals, you’re behind.  But you’re not alone as many retailers are questioning the cost of upgrading terminals.  The rollout in the UK and Canada took several years, so don’t expect anything special to happen on October 1 when the liability shift occurs.  It will be just like any other day.

2. The EMV specifications allow several methods for cardholder validation: online PIN, offline PIN, signature, and none (for low value transactions like vending machines).  The issuing bank decides which method to use when the card is programmed.  Then when the card is inserted into the terminal, the terminal will request a PIN or signature to verify the cardholder’s identity.

The card brands are recommending online PIN (where the PIN is sent to the issuer for verification, similar to debit transactions) instead of offline PIN (where the chip validates the PIN), but this decision will be transparent to both the cardholder and merchant.

In the US, a PIN is not mandated so many banks will configure their cards to request signatures.  Obviously this is not as secure and also places a burden on the retailers to retain signatures.  For this reason the NRF has been advocating “Chip and PIN” vs “Chip and Signature.”  Only Mexico and Brazil continue to use signatures.

3. The chip in the EMV cards is really aimed at preventing counterfeit cards, but it does nothing to help with other types of fraud.  Creating a counterfeit card, which is relatively easy with mag-stripe cards, is nearly impossible with chip cards.  The liability shift only impacts counterfeit cards; retailers are still not responsible for stolen card usage.

4. The EMV specification supports both contact and contactless (NFC) cards with some cards supporting both.  As mobile payments mature, it’s likely that contactless gains popularity so it’s probably worth the investment in terminals that support NFC.

5. New EMV cards will continue to have a mag-stripe for several years as terminals are upgraded.  If a consumer tries to swipe an EMV card in an EMV-capable terminal, the terminal will ask them to insert instead.  If the card’s chip or the chip reader malfunction, the consumer will be told to fall-back to mag-stripe.  And if the mag-stripe doesn’t work, merchants will call for a manual authorization.

6. When a card is inserted, it must be left until the transaction completes.  The chip is a tiny microprocessor that must communicate with the terminal, verifying each other’s authenticity.  Often consumers remove the card prematurely and the transaction must be restarted.  Or worse they forget to take the card with them when the transaction completes.  Cashiers will need to be diligent as consumers are educated.

7. Initially fraud won’t decrease.  Instead, card-present fraud in stores will migrate to card-not-present fraud online.  Thieves can still steal account numbers off the front of the cards or the cards’ mag-stripe, but they won’t be able to create counterfeit EMV cards.  That will drive them online where EMV doesn’t help (yet).

8.  Account numbers are not encrypted.  Each transaction gets a unique cryptogram that ensures the card is not counterfeit, but otherwise the account number and associated data travel the same path we’re used to.  Put another way, EMV cards and terminals would not have prevented recent thefts at large retailers.  But it does make it harder to use the stolen account numbers, because EMV cards can’t be counterfeited and used in stores.

Retailers still need to follow PCI recommendations to encrypt card numbers in transit and at rest, as well as protect point-of-sale systems from malware.


Infographic from http://www.welchatm.com/blog-emv-by-the-numbers.html

The worst mistake retailers can make is not knowing the facts about EMV.  Stay informed, and be prepared for the coming changes.

Tuesday Feb 10, 2015

Your Product, Your Problem

Today's posting comes from Paul Woodward, formerly with MICROS and now part of the Oracle Retail family. Paul has 20 years experience dealing with the supply chain with recent focus on brand compliance.

This month the New York attorney general accused GNC, Target, Walgreens, and Walmart of selling fraudulent herbal supplements whose contents did not match the labels.  Four out of five products did not contain ingredients matching the label and often instead contained cheap fillers, which could potentially harm those with allergies.

With the many scares over the past 12 months including the use of horse meat in Europe, the need for retailers to demonstrate due diligence in their collection, capture, and validation of supplier and product data is now fundamental to the protection of their brand and consumer trust.

As consumers, we continue to drive complexity into the supply chain -- we want greater ranges, experimental flavours, convenient ready to go products, choice of price points and an appreciation of our dietary needs. This creates a significant risk for the retailer as they balance bringing products to market quickly to meet the demand whilst ensuring thorough assessment of these ranges.

Just ten years ago consumers didn’t really care.  They didn’t ask for the information and they probably didn’t know they needed it. Now a third of consumers are allergic to something and 1 in 6 has a form of food related illness each year. This, along with our thirst for better living, healthier options, and the media's encouragement to know more, is firmly establishing that if it’s your label, it’s your product, and it’s your problem.


The average retailer is now handling over 10,000 active products from 2,000 production sites worldwide, and as the FDA and regulative requirements continually evolve and demand more transparency.  Retailers are faced with an ever increasing risk of failing to meet their brand promises.

Oracle Retail MICROS mycreations has been specifically developed to support this requirement. With over 20 years of proven capability in enabling the growth and protection of private label brands worldwide, the brand compliance cloud platform empowers retailers to collaborate with their supply chain in efficiently providing accurate and reliable data the consumer can trust.



Wednesday Feb 04, 2015

RetailROI Hall of Fame Class of 2015

I've posted several stories about the important work that the Retail Orphan Initiative does throughout the world.  I hope that perhaps you'll be inspired to offer your time, expertise, or even make a donation.  At the recent Super Saturday event, a few people were recognized for their contributions to ROI, and were awarded fantastic bobbleheads!  Below find the ROI Hall of Fame Class of 2015:

Scott Hagizadegan

Scott has traveled to 3 different ROI countries (Honduras, Dominican Republic, and Zambia) as well as led 2 different Trips to Zambia.  His company Ignisis has also donated numerous firewalls and monitors these for health and keeping the kids safe.

Jeff Roster

Jeff has made several trips to Honduras and is leading the trip to Congo.  He also has been instrumental in helping the microbusiness in Honduras, scheduling Life Skills webinars with business leaders for the kids at Plan Escalon.  

Randy Cucerzan

Randy is in charge of the RetailROI projects in Honduras. Starting with the original computer lab, Randy has now traveled to Honduras 9 times, leading 7 or 8 of those trips.  

John Geyerman

John has made several trips to Honduras, but most importantly he spearheaded the donations and installation of a cafeteria kitchen for a school of 600 children by getting suppliers and vendors involved.  A US quality cafeteria for total cost of about $65,000.  Not satisfied with just that, John had the Schlotzky's food safety course translated to Spanish and taught classes at Plan Escalon so kids would have certification.

Congratulations to all of the inductees! 


Tuesday Feb 03, 2015

Happy Birthday Amazon Prime

Has it been 10 years?  During that time Amazon's revenue has increased from $6.9B to $89.0B, and I'm guessing the unique program was a big part of that growth.  It's estimated there are $40M members, which would represent about 45% of Amazon's US customers.  I'm a member (although I only receive the free 2-day shipping because I share my brother's membership).  The student discount trains young shoppers to expect 2-day delivery, and I imagine the program is pretty sticky.  Unfortunately, Amazon is pretty secretive about its successful program.  Clearly they lose money on the actual shipping, but they seem to make it up on the increased number of purchases.

Now there's Prime Fresh for $299/year to deliver fresh groceries in limited cities.  Back in 2005 I could never have imagined how successful this program appears to be, and what's more impressive is the breadth of its offerings. Now Amazon is starting to open stores on college campuses, considering the purchase of existing Radio Shack stores, and there's always PrimeAir hanging out there waiting for regulators to set it free.  I wonder what's next?

Monday Feb 02, 2015

Payments in the Retail Industry

Last week I delivered a webinar for some of our Oracle Retail User Group (ORUG) members on payments in retail.  With NFC, EMV, and the many emerging payment solutions on the market, its important to keep current.  The deck is below, and a brief overview is after that.

Slide 2- The basics of credit card fees.  With a $100 purchase, the merchant actually gets $98 after fees taken by the issuing back, card network, and acquiring bank. Card fees are one of the most expensive costs for retailers.

Slide 3- The big emerging payment solutions are Google Wallet, PayPal, SoftCard, ApplePay, and MCX/CurrentC.  Google and Softcard is straightforward NFC with coupons and loyalty.  ApplePay is focused simply on payment.  PayPal is trying to extend online payments to the offline world, and MCX is trying minimize costs for retailers.

Slide 4- There are tons of smaller, emerging payment schemes including solutions from Final, Plastc, SimplyTapp, and Dwolla among others.

Slide 5- Krebs has a nice list of the types of fraud in the industry.  There are lots of opportunities for thieves.

Slide 6- Data breaches occur in many industries, not just retail.  Its a widespread problem.

Slide 7- Every retailer needs a Response Plan so they are prepared when a breach is discovered.

Slide 8- EMV is a step in the right direction, but it doesn't solve all the issues.  With base EMV, card numbers are still in the clear so memory scraper malware, the cause of several recent breaches, would still capture account numbers.  Also, retailers should be aware the when EMV is rolled out, fraud tends to migrate online.

Slide 9- There are three advanced solutions that help combat online fraud, but none of them is in widespread use due to additional friction and costs.

Slide 10- The liability shift is coming soon, so retailers need to understand what it entails.

Slide 11- The card issuer configures the card to determine the cardholder validation method, which can be online PIN, offline PIN, signature, and none.  Unfortunately, some banks are choosing signature, which isn't the most secure.

Slide 12- The process of using an EMV card is slightly different than magstripe, so lots of training will need required.

Slide 13- Some advice for retailers when they implement EMV.

Keep your eye on this space as it continues to change.

Friday Jan 30, 2015

A New Kind of Credit Card Fraud

Fraud analysts at credit card issuers (banks) pour though transactions looking for credit card fraud. Patterns in this data are what usually lead investigators to find breaches. Find a bunch of transactions involving stolen numbers, then work backwards to find the commonality and you've got your breach. But there are lots of additional patterns in that data as well.

Two enterprising fraud analysts at Capital One decided to look at purchase patterns for public retailers, then use that information to place bets in the stock market. Why not, right? All of Capital One's credit card transactions are sitting in the database for them query. As you can see in the heavily redacted SQL query below, it took some serious analytical skills.

For example, they compared this quarter's volume of Chipotle transactions to last quarter's and seeing that sales were strong decided to buy call options just before the earnings announcement. Earnings were good so the stock went up, and their $100,000 investment netted $270,000 in profits -- for basically three days work.

Over three years, they made around $2.8M which worked out to about a 1819% return on their investment. Of course this is considered insider trading and they were eventually arrested. So the guys that were looking for credit card fraud were actually committing a different kind of fraud. There's gold to be mined in that data. See the complete story over at Bloomberg View.

Thursday Jan 29, 2015

Lenox Launches eCommerce Transformation with Oracle

As we talk with new and long-standing customers of the Oracle Retail community, we truly learn their perspectives on IT priorities and the role of technology in their business strategy. E-commerce projects are on warp speed as retailers gear up and prepare to use technology platforms for omni-channel promotions and fulfillment. 

Venerable luxury tabletop brand Lenox, which sells not only its namesake lines (Lenox, Dansk, and Gorham) but also designers kate spade new york, kathy ireland HOME, Marchesa and more, is among those tapping the latest commerce technology to keep pace with customer expectations. In a recent phone conversation, Lenox CIO Erik Andersen talked about the major e-commerce transformation underway at the company, and he emphasized a focus on revitalizing the brand, improving promotion strategy and enhancing the customer experience.

 “As we evaluated where we are today and where we are going next as a company, we recognized the need for a world class e-commerce site that would enhance the entire customer experience and accommodate mobile, tablet and desktop to capture demand and execute the sale,” said Erik Andersen, CIO of Lenox. “By replacing a transactional, order management approach with a proactive and comprehensive marketing and promotion strategy, we are able to work smarter, get ahead of the curve and offer better promotions to our customers. We are also showcasing our enhanced brand image,” said Andersen.

Lenox produces its premium fine china patterns at the only fine bone china factory in the U.S., where it leverages its own marketing and design, sourcing and fulfillment, and is a top wholesaler to Macy’s, Bed Bath and Beyond, Belk, Dillard’s, and other major department stores, as well as Amazon and QVC. Lenox also sells direct through e-commerce, catalog, telemarketing and a chain of retail stores primarily located on the east coast.

This new e-commerce investment helps Lenox improve its business processes and gain efficiencies. The availability of insightful data makes it possible for marketers to develop personas, conduct market segmentation, and deliver meaningful promotions to better manage the business. The company also uses Oracle JD Edwards financials and a Manhattan Associates solution in its warehouse.

“Within a very short time, everyone on the team knew the site was looking exactly the way it should. We have strict goals for revenue lift. What I’m looking for is enhanced data and analytics. Oracle Commerce will help us gain a better understanding of our customer, better inventory turns and margin management,” said Andersen. “Working with Oracle partner Speed Commerce assured us that we would be up and running quickly with no issues.”

“As part of the RFP process we looked at R&D investment, and Oracle is second to none. We wanted to be able to stay the course and Oracle is making the right investments which gives us a lot of confidence that the platform will keep pace with changes and enhancements,” he added. “We already use Oracle Endeca in our current e-commerce environment and we will stay with that while going to the full Oracle Commerce platform. We will enhance search engine optimization and provide a more organic search experience as our online commerce business continues to grow,” said Andersen.

Congratulations to the entire team at Lenox for the transformation now underway! Welcome to the Oracle Retail community. 

Shop. Explore. Experience. Oracle Commerce @ http://www.lenox.com

Saturday Jan 10, 2015

ALEX AND ANI Selects Oracle Retail to Extend Personalized Approach

Founded in 2003, American jewelry brand Alex and Ani has cultivated a loyal customer following based on careful craftsmanship, an eye toward personalization, and reliable, seamless engagement in stores and online.  Next, the retailer is upgrading its behind-the-scenes processes with Oracle Retail merchandising, planning, point of service, and warehouse management solutions. The world-class integrated suite not only catches up with ALEX AND ANI’s recent explosive growth, but also allows for plenty of “thinking big” in coming years.

“One of our taglines is that you own the story,” said George Franzino, consultant and program manager for ALEX AND ANI’s “Project Prophet” software implementation. “This is our story. We’re going to need this system really soon. It’s the power of positivity.”

In ten years, ALEX AND ANI has grown from a single store in Newport, RI, to a nationally recognized lifestyle brand. Offering bangles, necklaces, earrings, rings and charms—all designed to “adorn the body, enlighten the mind, and empower the spirit”—the omni-channel retailer has more than 40 brick-and-mortar main street stores, an e-commerce site, international sales, and a wholesale business. The company’s legacy systems, however, have been unable to handle the complexity of the multiple distribution channels. There were no planning solutions in place to provide visibility into the supply chain, and no streamlined processes that could really provide value.

The new Oracle solution, with its first “go live” in April, focuses on planning and multichannel capabilities, with special attention given to better integrating social media. Part of the brand image, Franzino said, is the customers’ sense of relationship with award-winning brand founder Carolyn Rafaelian, in addition to principles such as domestic manufacturing, sustainability, and a focus on charitable donations.

“It’s a very creative environment,” Franzino said. And that “willing to stretch” energy carried through when it came time to build the new system.

“This is really a wholesale replacement of the system we have,” Franzino said. “It really does touch everything. At the same time we’re implementing this system, we’re building the company.” The implementation involves new departments, an expansion of functional areas, and new hires; as such, it bodes well that so many in the industry workforce already are skilled at working with Oracle.

Franzino, who has worked largely with Oracle products since 2004, said Oracle was the right choice for ALEX AND ANI because of scalability and best practices. Likewise, the retailer required an enterprise system to support its business focus of sustaining excellent customer relationships and being able to provide what they want, how they want it.

“This is the execution layer of delivering on that brand promise to our customers,” he said. “This will greatly enhance that customer experience.”

For more insight to ALEX AND ANI’s cross-channel strategy, read an executive Q&A with VP of Digital Strategy Ryan Bonifacino here. (1to1 Media)

Thursday Jan 08, 2015

Coupons in the Car

Drivers have always been an easy target for advertisers, whether its via the FM radio or roadside billboards.  But its time to be a little less "spray-and-pray" and a little more surgical in these communications.  OnStar recently announced AtYourService, a commerce platform that connects drivers to merchants in the car.  Recall OnStar is the concierge service provided in GM cars; press the OnStar button, then ask the operator for directions, a phone number, the nearest gas station, etc.

This evolution makes perfect sense.  Drivers will now be able to get offers from nearby retailers, restaurants, and hotels.  Don't panic; this is a pull model so your car won't be spammed with unwanted advertisements.  Just as BLE beacons enable contextual offers in stores, OnStar will use the car's location and the request to select relevant offers.

RetailMeNot, the online and mobile deals site, has inked a deal with OnStar to provide the deals.  I myself always visit retailmenot.com before making an online purchase so I can see if there are any applicable coupons.  Its saved me lots over the years.  Now the 6 million OnStar subscribers can save some money too.

Tuesday Jan 06, 2015

Retail Robots

I thought it fitting to kick the new year off with a futuristic topic, and what more futuristic than robots?  Lowe's hit the news back in October with their OSHbots, a robot deployed in their Orchard Supply Hardware store in San Jose, CA.  As a sales assistant, the robot provides customers with product and inventory information using voice response, much like Siri.  It navigates the store using collision avoidance technologies like its 3D camera.

Similarly, an Aloft hotel in Cupertino, CA deployed a robot that navigates the hotel and delivers items to rooms when requested by guests.  Need extra towels or perhaps another pillow?  SaviOne, your robotic bellhop, will deliver it to your door.  At Carnegie Mellon, inventory counts in the bookstore are handed by AndyVision, an autonomous robot that scans shelves looking for out-of-stock situations.

At around $150,000 per robot, these solutions are unlikely to be cost-effective yet, but as the technology matures and demand increases costs are bound to come down.  A mix of humans and robots in stores doesn't seem so impossible now, as voice and vision technology continues to evolve.  But we're still in the novelty phase with mainstream adoption several years off.  In the meantime, look for small, innovative examples popping up in California and Japan.

Thursday Dec 18, 2014

Evolution of Image Recognition

Remember the first time you tried Shazam on the iPhone? I was blown away. Even with ambient noise the thing was accurate.  Then I recall John Yopp, our head of research, say we should create a fashion Shazam that identifies clothing for people. When you see a cool tie at lunchtime, snap a picture and buy your own.  Wait a second, songs are one thing but fashion would be impossible.  Patterns, shadows, creases -- it would never work.

Then I came across GetFugu and Google Goggles, which both made good attempts are recognizing products.  Amazon's Flow was also very good, but it heavily leveraged optical character recognition to get hints about the product.  I suppose that fine when shopping in stores, but it wasn't the real world scenario I was looking for.  (Flow has undergone many upgrades over the years and now it can create a shopping list.)  Pounce was pretty good at marrying traditional advertising with digital, allowing the user to snap a picture of a product in a circular/flyer then see the product on the Website.

In a Customer Advisory Board meeting, one of my customers showed me a very cool app for recognizing sneakers.  NetShoes, a Brazilian e-commerce company, released an app that I found to be very accurate.  (I went around the conference snapping pictures of people's sneakers.  Luckily it was the last day so most were wearing comfortable shoes for the plane ride home.)  I later contacted the engineers and found there was a pretty exhaustive process for training the application to recognize the objects, but it could be used for almost anything given some degree of context.

Five years or so after my first experience with Shazam, I think we're getting closer.  Companies like Slyce are investing heavily in the technology necessary.  But we've still got a ways to go.  I downloaded and tried Neiman Marcus' implementation of Slyce and tested a few handbags.  Close but no cigar.


Sunday Dec 14, 2014

Retail Technology for 2015

I'm avoiding the word "prediction" because that involves a little more precision than I'm capable of delivering.  Instead I've listed the five big trends I think will dominate the retail technology landscape in 2015.

1. Payments Race

Before mentioning all the emerging payment vehicles, we need a little context from the past.  The original credit card was an air travel card issued by American Airlines in 1934.  It wasn't until the 1950s that Diners Club and American Express came on the scene, and the predecessors to Visa and MasterCard gained traction in the 1960s.  I don't think it was until the 1970s that credit cards became commonplace, so that's a 30 year evolution.

Granted, we're in the era of internet time where everything moves faster, but let's set expectations.  ApplePay, GooglePay, PayPal, MCX, Softcard, etc. are the start, not the end of the next generation of payments.  I expect continued refinement for several years before we find "the winner."  And don't for a minute think the best technology will win.  The best solution wins, and that includes compromises between consumers, banks, and merchants.

2. Home Automation

The Nest thermostat was just the start, and Rosie is somewhere towards the end. We're going to see a plethora of connected devices for the home, ones that retailers will sell and ones that will help retailers sell.  Amazon's Echo and Dash are great examples of removing shopping friction when replenishing the cupboards.  Soon our homes will know what they need and parts of our shopping list will be automated.

To this end, ARTS is looking for ways to standardize the interface to retail websites for automatic ordering. In the not to distant future, you'll configure your home to reorder items from your favorite retailer, or possibly use a comparison engine to find the best deal.  Just think, perhaps someday retailers will create advertising campaigns that target refrigerators.

3. Fast Delivery

At one end of the spectrum you have the prospect of delivery by drones, and at the other end you have 3D printers waiting to create on-demand.  The short-term answer to delivering products faster is probably in the middle, borrowing from the likes of Kiva and Uber.  The first half of the solution lies with efficient fulfillment. Sometimes that means pick and ship from stores, sometimes it means centrally located dark stores, and often it means automating the warehouse.  But accurately promising, picking, and packing solves only the first half of the journey.

If we associate the post office with public transportation, then FedEx and UPS are like taxis.  Both will get you where you're going, but at vastly different prices and service levels.  Uber represents a new way of thinking that combines the speed of taxis with the cost of buses.  If its easy to request a ride, then why not apply the principals to delivery?  There are lots of ongoing experiments in this regard, and we'll start progress in big cities.  This is the accelerant to pushing grocers online.

4. In-store Personalized Experience

Personalized experience at scale is the goal.  The "at scale" part tends to exclude expensive staff, so technology is expected to step in with intelligent automation. Technologies like geo-fencing, marketing automation, BLE beacons, data as a service, and video analytics all have a place in the solution.  Retailers will continue to experiment with ways to interact with consumers in a helpful way, being the butler instead of the stalker.  Payment, loyalty programs, and marketing will converge on the smartphone, and bring many Web innovations to in-store shopping.

5. Data Theft

Organized crime has gone from spam, to malware, to outright data theft. Until the credit card industry fixes the inherent and obvious flaws in their payment ecosystems, hackers will continue to attack retailers.  EMV is a step in the right direction, but its only a partial solution.  Tokenization and end-to-end encryption are necessary and will finally be implemented in several industries.  Data theft will get worse before it gets better, but no one is going back to cash.

Are there trends you think will have a greater impact than these five?

Wednesday Dec 03, 2014

Have you used ApplePay?

After I received my iPhone 6, I quickly registered a credit card and headed to Walgreens to test ApplePay.  It worked great, meeting my expectations.  Since then I've only used it one other time -- at a vending machine I found in a hotel.  (And they charged an extra $0.10, presumably for using a credit card.)  To be fair, I also have a case/sled for my iPhone 5 that allows me to use Isis/Softcard which I've tried at McDonald's.  But in both cases there's no real incentive for me to use it. The card in my wallet works just as well.

InfoScout just released the results of its Black Friday survey and found that ApplyPay was used only 5% of the time when it could have been used.  That is, the customer had registered a card and the store was equipped to accept ApplePay, yet only 5% of the time was ApplePay used.

There are various reason cited by the survey participants for not using ApplePay, but the biggest (31%) was not knowing whether the store accepts it.  When asked why iPhone 6/6+ owners haven't even tried ApplePay most said they didn't know how it works (32%) or they're satisfied with current payment methods (30%).

Pymnts.com declares "ApplePay a Bust on Black Friday, New Data Show," but most of the experts they interviewed said the adoption rate is normal for an emerging payment.  My own experience with smart cards is similar; a big marketing push is required to educate consumers so they feel comfortable.

So have you used ApplePay yet?  How was the experience?

About


David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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