Tuesday Nov 04, 2014

The Payment Experience

I've used Softcard (fka Isis) before, and it works just fine.  But ApplePay is a much faster experience, taking just two steps instead of four or five.  I've not used CurrentC yet since its still in pilot, but I understand its similar to the Starbucks approach, taking at least three steps.  But these companies have different goals for their mobile payment platforms, and thus have different experiences.

I believe Softcard's goal is to profit from offers made via their application. Not only do they handle payment, but they also link consumers to coupons and deals from retailers.  This helps retailers drive demand, and helps consumers save money.  This means the experience must appeal to both retailers and consumers.

ApplePay, on the other hand, does not address coupons and offers.  Its experience is streamlined to appeal to consumers, with little regard to the needs of retailers (although "fast" probably appeals to both parties).  While the banks are currently covering Apple's fees, those fees may eventually be added to existing card fees that retailers pay.  This is why retailers are less excited about ApplePay.

And that's where MCX enters the picture.  Members are refusing to accept ApplePay in the hopes that CurrentC will eventually take off.  CurrentC's goal is, first and foremost, to minimize card fees.  Their second goal is to support the retailer's marketing activities with coupons, offers, and loyalty programs.

Then there are lots of other emerging payment methods popping up everywhere.  The latest is MasterCard's trial with the Nymi wristband.  I mentioned the ApplePay two-step which is "tap and touch."  What if you could drop the second step?  This wristband uses heartbeat authentication instead of a fingerprint, so you can simply tap to pay.  I guess I'll have to trust the science on that one.  If it works, I'm guessing the technology will go into smartwatches.

Of course none of these approaches really changes anything for online purchases, which have been the same payment experience since the start. What concerns me is that as we tighten security in stores, fraud is just going to move online.  (Reminds me of treating my yard for fire ants only to have my neighbors complain about the sudden ant problem.)  I guess we'll cross that bridge next year.

Monday Sep 09, 2013

Apple iBeacons in the Store

There is much anticipation surrounding tomorrow's Apple event.  I'm sure we'll hear about new iPhones and iOS7, and we might even hear a bit about iPads, iWatches, and AppleTV.  But I'm really waiting to hear more about iBeacons, a Bluetooth low energy solution for micro-location detection.  iBeacons are going to bring us one step closer to Minority Report marketing, for better or for worse.  Actually, the combination of iBeacons and wearable tech like the rumored iWatch or Google Glass could take us beyond contextual advertising and into useful engagement.  So why should retailers care?

Location is a key contextual clue for target marketing.  Knowing where a consumer is, especially relative to your store, helps determine when and how to target them.  This has been the approach behind geo-fencing, where consumers are sent marketing messages via their mobile phone based on crossing certain boundaries.  Go near the slopes and I'll send you information on new skis.  Go near my store and I'll entice you in with a coupon.  Go near my competitor and I'll remind you of our price-match guarantee.  You get the point.

Location is determined using several technologies leveraging mobile phones, none of which work that great indoors.  Current technology is good enough to know you're at home but not that you're in the kitchen.  An inexpensive way to better triangulate the position of a mobile phone is to strategically place a few iBeacons in a store.  These battery-operated devices are offered by several vendors.  (The image above shows an Estimote iBeacon attached to the wall.)  The iBeacons send signals that iPhones running iOS7 (and presumably other phones in the near future) receive and then calculate distance.  The iPhones themselves can also act as iBeacons, building a dynamic mesh network.

If you'll recall, the ShopKick app uses a similar concept based on sound instead of bluetooth.  In either case, this enables retailers to engage with consumers via their mobile phones based on their specific indoor location.  Consumers can receive offers based on the department in which they're standing, or based on how long they linger in one place.  If consumers can get past the creep-factor, then there's lots of utility in this approach.

So while you're reviewing the Apple announcements, pay close attention to what's said about iBeacons.  And consider how iBeacons combined with an iWatch might enhance the Passbook experience while shopping.

UPDATE: Looks like Paypal Beacon is similar.

Wednesday Aug 28, 2013

A Digital - Analog Merge

I recently downloaded an iPhone app called Pounce that furthers the concept of Commerce Anywhere.  Since weekly circulars are still an important part of reaching consumers, they continue to be a cornerstone in many retailers' marketing plans.  So Pounce augments the newspaper experience by allow users to point their mobile phone's camera at an item in the circular and have it added to a basket.  The basket can then be passed to the retailer's e-commerce site for normal checkout.  If you've per-registered your payment information with Pounce, you can checkout immediately on the mobile phone.

According to Business Insider, only Staples, Ace Hardware, Toys "R" Us, Babies "R" Us and Target are currently supported.  After downloading the app, I went to the Staples site and tried scanning a random item.  The app didn't recognize any items I selected from the website, but that's not what its suppose to do (I was trying to cheat).  So I clicked over to the print ads where my local newspaper inserts are available online.  The app was great at quickly recognizing those items, taking just a second or two.  In fact, as I moved my phone across the page it was grabbing multiple items and putting them all in my cart.  Obviously the app is "trained" to recognize only the items in the circular, which makes perfect sense.

This is another great example of merging the analog and digital worlds, letting each do what it does best.

Thursday Apr 11, 2013

The Cookie in My Mobile Phone

The traditional Marketing Mix covers product, price, place, and promotion and often people and process are thrown in for good measure.  Retailers spend their time adjusting these "P levers" to satisfy customers and drive sales.  But the P that interests me most is personalization.  For years the online experience has been personalized to varying extents.  Cookies track the sites I visit, and advertising is changed in real-time to reinforce promotions in an effort to retarget me.  I get product recommendations based on past purchases, and I get invited to "exclusive sales" from time to time.

In general, its not a bad relationship.  I get relevant product information and promotions, and nobody tries to blindly sell me things I'll never want.

These capabilities are slowing making their way into physical stores.  The key enabler of websites is the ability to identify the customer, either generally (e.g. cookies) or specifically (e.g. account login).  Physical retailers have tried to achieve this using the loyalty card.  However, loyalty cards are used at checkout, the very end of the shopping process.  To influence shoppers, retailers need access to the shoppers when the enter the store, or perhaps even earlier.

Smartphones that have WiFi enabled send out signals to nearby routers identifying themselves using a unique number called a MAC. The MAC can be used like a cookie.  Retailers can monitor the MACs that come into their stores, see their paths, measure dwell time at endcaps, and record frequency of visits.  If the retailer can convince the customer to identify themselves and associate a name with the MAC, then that's as good as logging into a website.  Now as soon as the person enters the store, the retailer can personalize the shopping experience.

Perhaps a welcome message is flashed on an overhead monitor: "Welcome back, David.  Thanks for visiting us."  Perhaps product recommendations tailored to interests can be sent to the smartphone.  "To complement the shirt you bought, get 10% off any tie."  Perhaps the manager approaches to shake my hand and offer help. 

I like walking into my favorite restaurant for lunch and having iced-tea immediately served because the waiter knows me.  Personalized service, even at scale, is now possible for large retailers too.  It can be subtle, like simply tailoring promotions, or it can be more overt.  The technology exists; retailers need only decide the level of personalization and weigh the impact of customer privacy concerns.

Speaking of privacy, the Location Privacy Protection Act is making its way through congress.  (You can see other pending legislation at the NRF Integrated Mobile Initiative site.)  It seeks to limit the ability to track smartphones.  The press has been reporting on the battle between Al Franken, the bill's sponsor, and Euclid, an in-store analytics company started by some ex-Google employees.

Remember, retailers should target technology investments for the future.  Yes, a great deal of your current customers might think tracking smartphones is creepy, but their kids don't, and their kids will be your customers in 5-10 years. As a society we need to ease into these advancements.

Of course if you really dislike being  tracked, even anonymously, you can turn off the WiFi on your smartphone.  That is, until face-recognition is perfected.

Tuesday Jan 22, 2013

Picking a Winner for Payments

Probably the most common question I get asked is, "which emerging payment system is best?"  Its a good question, and unfortunately, my crystal ball is a bit cloudy.  Remember, it took credit cards a while before they got traction.  Some of the same things I hear today ("we don't need a new payment scheme," and "it compromises my privacy") I'm hearing in reference to emerging payments.  And just as those complaints eventually quieted, the same thing will happen and people will adopt new ways of paying.  One thing I can say confidently is that the payment landscape will change over the next 3-5 years.

Is NFC dead on arrival? No. I'm not going to count Google, AT&T, Verizon, T-Mobile, and MasterCard out this early in the game. They are behind thanks to a lack of NFC support in iPhones, but they are still viable solutions.  With retailers needing to upgrade their POS terminals to accept EMV cards, now is a great time to also install NFC capabilities.  Once there are more NFC readers out there, more and more innovation will occur around them.

PayPal is definitely in the lead since they are able to leverage their e-commerce base of users.  Their lack of reliance on NFC has worked in their favor, at least in the short-term.  Of course if NFC takes off, I'm sure PayPal can add that technology as well.  Their flexibility and reach are strong points.

Google and Isis have great systems, but since they are limited to Android devices they are not serving enough of the market.  That, of course, will improve over time. While all three (Google, Isis, PayPal) are addressing consumer convenience, none are really addressing transaction costs for merchants.  That's where MCX, the retailer led mobile wallet, could shine. Since they are not on the forefront, they have the luxury of watching the market and picking the best ideas.

At the recent NRF conference, MCX representatives said they are planning to use barcodes for payments in order to support all mobile phones.  They are also focused on lowering transaction costs for merchants as well as protecting customer data, something that differentiates them.  The approach sounds right, but they are far behind in development unless they acquire or partner to gain access to an existing wallet.  Best potential of all the solutions, but furthest behind.

I suppose I could put all my retirement savings into one stock, but I'd rather spread the risk across many.  By the same token, there's no reason for retailers to pick winners at this early stage.  The best advice is to get into the game and try supporting one of the new wallets. In many cases, there's funding available to help offset costs.  This invaluable experience will prepare you to take advantage when winners are more apparent.

Wednesday Nov 14, 2012

Showrooming: What's the big deal?

There's been lots of chatter recently on how retailers will combat showrooming this holiday season.  Best Buy and Target, for example, plan to price-match certain online sites.  But from my perspective, the whole showrooming concept is overblown.  Yes, mobile phones make is easier to comparison-shop, but consumers have been doing that all along.  Retailers have to work hard to merchandise their stores with the right products at the right price with the right promotions.  Its Retail 101.

Yeah ok, many websites don't have to charge tax so they have an advantage, but they also have to cover shipping costs. Brick-and-mortar stores have the opportunity to provide expertise, fit, and instant gratification all of which are pretty big advantages.

I see lots of studies that claim a large percentage of shoppers are showrooming.  Now I don't do much shopping, but when I do I rarely see anyone scanning UPC codes in the aisles.  If you dig into those studies, the question is usually something like, "have you used your mobile phone to price compare while shopping in the last year."  Well yeah, I did it once -- out of the 20 shopping trips.  And by the way, the in-store price was close enough to just buy the item.  Based on casual observation and informal surveys of friends, showrooming is not the modus-operandi for today's busy shoppers.

I never see people showrooming in grocery stores, and most people don't bother for fashion.  For big purchases like appliances and furniture, I bet most people do their research online before entering the store.  The cases where I've done it was to see if a promotion was in fact a good deal.  Or even to make sure the in-store price is the same as the online price for the same brand.

So, if you think you're a victim of showrooming, I suggest you look at the bigger picture.  Are you providing an engaging store experience?  Are you allowing customers to shop the way they want to shop, using various touchpoints?  Are you monitoring the competition to ensure prices are competitive?  Are your promotions attracting the right customers?

Hubert Jolly, CEO of Best Buy, recently commented that showrooming might just get more people into his stores. "Once customers are in our stores, they're ours to lose."

Monday Oct 29, 2012

Isis Finally Rolls Out

Google has rolled their wallet out for several chains; I see the NFC readers in Walgreen's when I'm sent their for milk.  But Isis has been relatively quiet until now.  As of last week they have finally launched in their two test cities: Austin, and Salt Lake City.  Below are the supported carriers and phones as of now, but more phones will be added later.

  • AT&T supports: HTC One™ X, LG Escape™, Samsung Galaxy Exhilarate™, Samsung Galaxy S® III, Samsung Galaxy Rugby Pro™
  • T-Mobile supports: Samsung Galaxy S® II, Samsung Galaxy S® III, Samsung Galaxy S® Relay 4G
  • Verizon supports: Droid Incredible 4G LTE.

Of course iPhone owners have no wallet since Apple didn't included an NFC chip.

To start using Isis, you have to take your NFC-capable phone to your carrier's store to get the SIM replaced with a more sophisticated one that has a secure element configured for Isis.  The "secure element" is the cryptographic logic that secures mobile payments.  Carriers like the secure element in the SIM while non-carriers (like Google) prefer the secure element in the phone's electronics. (I'm not entirely sure if you could support both Isis and Google Wallet on the same phone.  Anybody know?)

Then you can download the Isis app from Google Play and load your cards.  Most credit cards are supported, and there's a process to verify the credit cards are valid.  Then you can select from the list of participating retailers to "follow."  Selecting a retailer allows that retailer to give you offers via the app.

The app is well done and easy to use.  You can select a default payment type and also switch between them easily.  When the phone is tapped on the reader, there are two exchanges of information.  The payment information is transferred, and then the Isis "SmartTap" information which includes optional loyalty number and digital coupons.  Of course the value of mobile wallets comes from the ease of handling all three data types (i.e. payment, loyalty, offers).

There are several advertisements for Isis running now, and my favorite is below.

Thursday Sep 27, 2012

Oracle Retail Mobile Point-of-Service

When most people discuss mobile in retail, they immediately go to shopping applications.  While I agree the consumer side of mobile is huge, I believe its also important to arm store associates with mobile tools.  There are around a dozen major roll-outs of mobile POS to chain retailers, and all have been successful.  This does not, however, signal the demise of traditional registers.  Retailers will adopt mobile POS slowly and reduce the number of fixed registers over time, but there's likely to be a combination of both for the foreseeable future.  Even Apple retains at least one fixed register in every store, you just have to know where to look.

The business benefits for mobile POS are pretty straightforward:

1. Faster checkout.  Walmart's CFO recently reported that for every second they shave off the average transaction time, they can potentially save $12M a year in labor.  I think its more likely that labor will be redeployed to enhance the customer experience.

2. Smarter associates.  The sales associates on the floor need the same access to information that consumers have, if not more.  They need ready access to product details, reviews, inventory, etc. to meet consumer expectations.  In a recent study, 40% of consumers said a savvy store associate can impact their final product selection more than a website.

3. Lower costs.  Mobile POS hardware (iPod touch + sled) costs about a fifth of fixed registers, not to mention the reclaimed space that can be used for product displays.

But almost all Mobile POS solutions can claim those benefits equally.  Where there's differentiation is on the technical side.  Oracle recently announced availability of the Oracle Retail Mobile Point-of-Service, and it has three big technology advantages in the market:

1. Portable. We used a popular open-source component called PhoneGap that abstracts the app from the underlying OS and hardware so that iOS, Android, and other platforms could be supported.  Further, we used Web technologies such as HTML5 and JavaScript, which are commonly known by many programmers, as opposed to ObjectiveC which is more difficult to find.  The screen can adjust to different form-factors and sizes, just like you see with browsers.  In the future when a new, zippy device gets released, retailers will have the option to move to that device more easily than if they used a native app.

2. Flexible.  Our Mobile POS is free with the Oracle Retail Point-of-Service product.  Retailers can use any combination of fixed and mobile registers, and those ratios can change as required.  Perhaps start with 1 mobile and 4 fixed per store, then transition over time to 4 mobile and 1 fixed without any additional software licenses.  Our scalable solution supports lots of combinations.

3. Consistent.  Because our Mobile POS is fully integrated to our traditional POS, the same business logic is reused.  Third-party Mobile POS solutions often handle pricing, promotions, and tax calculations separately leading to possible inconsistencies within the store.  That won't happen with Oracle's solution.

For many retailers, Mobile POS can lower costs, increase customer service, and generally enhance a consumer's in-store experience.  Apple led the way, but lots of other retailers are discovering the many benefits of adding mobile capabilities in their stores.  Just be sure to examine both the business and technology benefits so you get the most value from your solution for the longest period of time.

Friday Sep 21, 2012

Slow Start For Passbook

Like many others, I pre-ordered my iPhone 5 then downloaded iOS 6 to my antiquated iPhone 4.  I decided the downgrade in mapping capabilities was worth access to Passbook, Apple's wallet of sorts that holds loyalty cards, tickets, and coupons.  To my disappointment, Passbook didn't work.  When it goes to the iTunes Store, it can't connect.  After a little research, I read that you can change the date on the iPhone to the future (I did March 2013), and then it will connect.  A list of apps that support Passbook are shown, some of which were already on my iPhone and others that required downloading.  Even when I put the date back on "automatic," things continued to work.  Not sure why.

Anyway, even once I got into iTunes and made sure I had some of the apps downloaded, it wasn't clear what the next step was (gimme a break, its Friday afternoon).  Every time I opened Passbook, it sent me to the "Apps for Passbook" page on iTunes.  I tried downloading one of the suggested apps that I didn't already have (Walgreens).  The app's icon has a "new" stripe across the icon.  I launched it and it said it had Passbook integration.

So I needed to login or signup with the loyalty program.  After figuring out what my username and password already was, it then offered to add the loyalty card to Passbook, which I accepted.  Now when I flip over to Passbook, I can see the loyalty card there.  I guess I need to go into each app to "push" cards into Passbook.

People seem to be using it.  Twenty-four hours after iOS 6 was released, Sephora had 20,000 users of Passbook. Starbucks says they'll be integrated to Passbook by the end of the month, and Target is already offering coupons via Passbook.  After a few more retailers get on board, Apple may not need to consider NFC.

Tuesday Sep 11, 2012

Walmart's Mobile Self-Checkout

Reuters recently reported that Walmart was testing an iPhone-based self-checkout at a store near its headquarters.  Consumers scan items as they're placed in the physical basket, then the virtual basket is transferred to an existing self-checkout station where payment is tendered.  A very solid solution, but not exactly original.

Before we go further, let's look at the possible cost savings for Walmart.  According to the article:

Pushing more shoppers to scan their own items and make payments without the help of a cashier could save Wal-Mart millions of dollars, Chief Financial Officer Charles Holley said on March 7. The company spends about $12 million in cashier wages every second at its Walmart U.S. stores.

Um, yeah. Using back-of-the-napkin math, I calculated Walmart's cashiers are making $157k per hour.  A more accurate statement would be saving $12M per year for each second saved on the average transaction time.  So if this self-checkout approach saves 2 seconds per transaction on average, Walmart would save $24M per year on labor.  Maybe.  Sometimes that savings will be used to do other tasks in the store, so it may not directly translate to less employees.

When I saw this approach demonstrated in Sweden, there were a few differences, which may or may not be in Walmart's plans.  First, the consumers were identified based on their loyalty card.  In order to offset the inevitable shrink, retailers need to save on labor but also increase basket size, typically via in-aisle promotions.  As they scan items, retailers should target promos, and that's easier to do if you know some shopping history.  Last I checked, Walmart had no loyalty program.

Second, at the self-checkout station consumers were randomly selected for an audit in which they must re-scan all the items just like you do at a typical self-checkout.  If you were found to be stealing, your ability to use the system can be revoked.  That's a tough one in the US, especially when the system goes wrong, either by mistake or by lying.  At least in my view, the Swedes are bit more trustworthy than the people of Walmart.

So while I think the idea of mobile self-checkout has merit, perhaps its not right for Walmart.

Thursday Aug 30, 2012

5 Ways to Determine Mobile Location

In my previous post, I mentioned the importance of determining the location of a consumer using their mobile phone.  Retailers can track anonymous mobile phones to determine traffic patterns both inside and outside their stores.  And with consumers' permission, retailers can send location-aware offers to mobile phones; for example, a coupon for cereal as you walk down that aisle.  When paying with Square, your location is matched with the transaction.  So there are lots of reasons for retailers to want to know the location of their customers.  But how is it done?

I thought I'd dive a little deeper on that topic and consider the approaches to determining location.

1. Tower Triangulation

By comparing the relative signal strength from multiple antenna towers, a general location of a phone can be roughly determined to an accuracy of 200-1000 meters.  The more towers involved, the more accurate the location.

2. GPS

Using Global Positioning Satellites is more accurate than using cell towers, but it takes longer to find the satellites, it uses more battery, and it won't well indoors.  For geo-fencing applications, like those provided by Placecast and Digby, cell towers are often used to determine if the consumer is nearing a "fence" then switches to GPS to determine the actual crossing of the fence.

3. WiFi Triangulation

WiFi triangulation is usually more accurate than using towers just because there are so many more WiFi access points (i.e. radios in routers) around. The position of each WiFi AP needs to be recorded in a database and used in the calculations, which is what Skyhook has been doing since 2008.  Another advantage to this method is that works well indoors, although it usually requires additional WiFi beacons to get the accuracy down to 5-10 meters.  Companies like ZuluTime, Aisle411, and PointInside have been perfecting this approach for retailers like Meijer, Walgreens, and HomeDepot.

Keep in mind that a mobile phone doesn't have to connect to the WiFi network in order for it to be located.  The WiFi radio in the phone only needs to be on.  Even when not connected, WiFi radios talk to each other to prepare for a possible connection.

4. Hybrid Approaches

Naturally the most accurate approach is to combine the approaches described above.  The more available data points, the greater the accuracy.  Companies like ShopKick like to add in acoustic triangulation using the phone's microphone, and NearBuy can use video analytics to increase accuracy.

5. Magnetic Fields

The latest approach, and this one is really new, takes a page from the animal kingdom.  As you've probably learned from guys like Marlin Perkins, some animals use the Earth's magnetic fields to navigate.  By recording magnetic variations within a store, then matching those readings with ones from a consumer's phone, location can be accurately determined.  At least that's the approach IndoorAtlas is taking, and the science seems to bear out.  It works well indoors, and doesn't require retailers to purchase any additional hardware.  Keep an eye on this one.

Wednesday Aug 29, 2012

History of Mobile Technology

Over the last ten years, mobile phones have gone through several incremental technology leaps that have added capabilities that impact the retail industry.  I've listed the six major ones below, along with their long-lasting impact.

1. Location

In the US, the FCC required mobile phones to implement E911 (emergency calls) by 2006, requiring the caller to be located to within 300 meters.  Back in 2000, GPS was opened up for civilian use, and by 2004 Qualcomm had figured out how to use GPS in mobile phones.  So mobile operators moved from cell tower triangulation to GPS, principally for E911.  But then lots of other uses became apparent, especially navigation.  The earliest mobile apps from retailers made it easy to find nearby stores, and companies are looking at ways to use WiFi triangulation inside stores.

2. Computer Vision

In 1997 Philippe Kahn shared a photo of his newborn using a mobile phone thus launching the popularity of instant visual communications.  Over the years the quality of the cameras got better, reaching the point where barcodes could be read around 2008.  That's when Occipital came on the scene with their Red Laser application, which was eventually acquired by eBay.  This opened up the ability for consumers to easily price compare inside stores.  Other interesting apps included Tesco's Wine Finder and Amazon's Price Checker, both allowing products to be identified by picture.

3. Augmented Reality

Once the mobile phone had GPS, a video camera, and compass functionality it was suddenly possible to overlay digital information on the screen in real-time.  Yelp, which was using GPS to find nearby merchants, created a backdoor called Monocle on the iPhone that showed nearby merchants overlayed on the video camera view.  Today AR apps are mostly used by retailers for marketing, like Moosejaw's app that undresses models in their catalog.

4. Geo-Fencing

So if we're able to track the location of a mobile phone, why not use that context to offer timely information?  My first experience with geo-fencing came courtesy of North Face, the outdoor enthusiast store. When a mobile phone enters a predetermined area, like near a store, a text message is sent to phone with an offer or useful information.  Of course retailers can geo-fence their competitors as well and find out which customers are aren't so loyal.

5. Digital Wallet

Mobile payments leverage different technologies such as NFC, QRCodes, bluetooth, and SMS to facilitate communication between the consumers's phone and the retailer's point-of-sale. The key here is the potential to consolidate loyalty cards, coupons, and bank cards into the mobile phone and enable faster checkout.  Nobody does this better than Starbucks today, but McDonald's and Duncan Donuts aren't far behind.  Google, Isis, Paypal, Square, and MCX are all vying for leadership in this area.  If NFC does finally take off, it will be leveraged by retailers in more places than just the POS.

6. Voice Response

Mobile Phones have had the ability to interpret simple voice commands for a while, but Google and Amazon were the first to use voice to allow searches for products.  Allowing searches by text, barcode, and voice makes it easy to comparison shop in the aisles.  Walmart even uses voice to build shopping lists, and if the Siri API is even opened we could see lots more innovation in this area.

Wednesday Aug 22, 2012

Payments, Payments Everywhere

In order to sell a new product, you have to solve a problem.  Emerging payment methods, by themselves, aren't really solving any problem.  What's the pain point? Credit and debit cards work just fine (although EMV certainly helps reduce fraud, and retailers would love lower rates). Yet over the last couple months there seems to be a new announcement in this area every week, and they get lots of attention.  As Rick Oglesby, a senior analyst with research firm Aite Group LLC., puts it, "This is not about payments -- it's about something bigger."

At stake is the relationship between the consumer and retailers, banks, CPG companies, telcos, and card brands.  Steve Ranger over at CNET put it best when he said, "Right now, the mobile payments market reminds me a lot of the old cartoon show Wacky Races."  I've described some of these solutions in past postings, but for a quick summary refer to Paula Rosemblum's recent posting.

Payments are table stakes.  The jewel is the digital wallet, which typically contains value-added services beyond the payment itself. For a consumer it might be nice to put all her cards "in" her mobile phone, but its when loyalty cards, coupons, and offers are added that things get interesting.  For a retailer, its all about two things: lowering fees and bettering the customer experience.

PayPal and Square are injecting much needed competition into the payment space, which in turn may lead to lower fees for retailers.  Retailers aren't looking for zero because they know that card-based transactions lower their cash handling cost and decrease checkout time.  There's value that's justifies reasonable fees, but I stress the word reasonable.

But its customer experience and that relationship I mentioned earlier that is the driving force here.  Mobile phones suddenly make it possible to reach consumers as they shop, much like retailers do online.  And thus they can be enticed with offers, coupons, and product information across channels. Payments are along for the ride.

So each time you read another announcement touting NFC or cloud-payments, look past the payment and consider the impact to customer experience.  That's what will separate the winners and losers.

Thursday Aug 09, 2012

Integrated Mobile Initiative Launch

Back in 2009, ARTS (a division of the NRF) began to collect information on the use of mobile devices in the retail industry.  A committee was assembled consisting of retailers, vendors, analysts, and standards organizations for the purpose of authoring the first retail-specific whitepaper addressing mobile marketing, mobile commerce, mobile payments, and mobile operations.  The tremendous reception of document led to a second version that followed in 2011.

As mobile continues to gain momentum in retail, the NRF has now established the Integrated Mobile Initiative (iMi), an effort aimed at providing crucial resources to retailers for all things mobile.  Today a portal (www.nrfmobile.com)  was launched where all the NRF's information on mobile can be easily found.  This includes research, articles, whitepapers, and webinars.

Expanding upon the previous Mobile Blueprints, ARTS has published the Mobile Integration whitepaper on the new portal.  This document is available for download and explains how existing standards can be leveraged to integrate mobile applications into a retailer's existing business processes.

The upcoming ARTS User Conference, September 30 to October 2, is a gathering for experts to exchange ideas about mobile retailing and more.

Friday Jun 15, 2012

The Apple Passbook

In a previous job I worked on smart card systems.  Our vision was to replace the physical wallet with a chip card that contained stored value, credit cards, and loyalty cards.  The technology was up to the task, but the business model never worked out.  When all those things go onto a single card, who owns the card and maintains the applications?  Each bank wanted their own card with branding, so instead of consolidating lots of cards onto one, we ended up with the same number of cards, just more expensive chip cards.  The Costanza wallet would not die.

More recently I've been able to move lots of these cards into iOS apps using products like CardStar, TripIt, and Fandango.  I guess moving from physical to digital is progress, but still no consolidation.  But this week Apple announced its Passbook, an iOS feature that consolidates boarding passes, loyalty cards, and movie tickets.  Another step in the right direction.

We've been waiting for Apple to announce a NFC solution to take advantage of the 400 million credit cards it stores in iTunes for its customers.  Perhaps Passbook is the first step in that direction.  It wouldn't take much to add credit cards to Passbook, then enable secure transfer of the track data using a NFC equipped iPhone.  I've got to think this has to be part of the larger vision, but of course Apple is very secretive.

I think the steps will be loyalty, coupons, and then payment when it comes to the evolving Passbook.  Retailers should keep an eye on Apple, and expect these things to happen in the Apple stores first.


News and ideas about the retail industry with a focus on customers, innovation, trends and emerging technologies.

Oracle Industry Connect 2016

Stay Connect with Oracle Retail


« June 2016