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.


Friday Oct 26, 2012

Analytics in an Omni-Channel World

Retail has been around ever since mankind started bartering.  The earliest transactions were very specific to the individuals buying and selling, then someone had the bright idea to open a store.  Those transactions were a little more generic, but the store owner still knew his customers and what they wanted.  As the chains rolled out, customer intimacy was sacrificed for scale, and retailers began to rely on segments and clusters.  But thanks to the widespread availability of data and the technology to convert said data into information, retailers are getting back to details.

The retail industry is following a maturity model for analytics that is has progressed through five stages, each delivering more value than the previous.

Store Analytics

Brick-and-mortar retailers (and pure-play catalogers as well) that collect anonymous basket-level data are able to get some sense of demand to help with allocation decisions.  Promotions and foot-traffic can be measured to understand marketing effectiveness and perhaps focus groups can help test ideas.  But decisions are influenced by the majority, using faceless customer segments and aggregated industry data points.  Loyalty programs help a little, but in many cases the cost outweighs the benefits.

Web Analytics

The Web made it much easier to collect data on specific, yet still anonymous consumers using cookies to track visits. Clickstreams and product searches are analyzed to understand the purchase journey, gauge demand, and better understand up-selling opportunities.  Personalization begins to allow retailers target market consumers with recommendations.

Cross-Channel Analytics

This phase is a minor one, but where most retailers probably sit today.  They are able to use information from one channel to bolster activities in another. However, there are technical challenges combining data silos so its not an easy task.  But for those retailers that are able to perform analytics on both sources of data, the pay-off is pretty nice.  Revenue per customer begins to go up as customers have a better brand experience.

Mobile & Social Analytics

Big data technologies are enabling a 360-degree view of the customer by incorporating psychographic data from social sites alongside traditional demographic data.  Retailers can track individual preferences, opinions, hobbies, etc. in order to understand a consumer's motivations.  Using mobile devices, consumers can interact with brands anywhere, anytime, accessing deep product information and reviews.  Mobile, combined with a loyalty program, presents an opportunity to put shopping into geographic context, understanding paths to the store, patterns within the store, and be an always-on advertising conduit.

Omni-Channel Analytics

All this data along with the proper technology represents a new paradigm in which the clock is turned back and retail becomes very personal once again.  Rich, individualized data better illuminates demand, allows for highly localized assortments, and helps tailor up-selling.  Interactions with all channels help build an accurate profile of each consumer, and allows retailers to tailor the retail experience to meet the heightened expectations of today's sophisticated shopper.  And of course this culminates in greater customer satisfaction and business profitability.

Tuesday Oct 16, 2012

What's Old is New Again

Last night I told my son he could stream music to his tablet "from the cloud" (in this case, the Amazon Cloud).  He paused, then said, "what is the cloud?"  I replied, "a bunch of servers connected to the internet."  Apparently he had visions of something much more magnificent.  Another similar term is "big data."  These marketing terms help to quickly convey topics but are oversimplifications that are open to many interpretations.  At their core, those terms are shiny packages holding recycled ideas.

I see many headlines declaring big data changes everything, but it doesn't.  Savvy retailers have been dealing with large volumes of data since the electronic cash register was invented.  But there have been a few changes to the landscape that make big data a topic of conversation:

1. Computing power has caught up to storage volumes. Its now possible to more thoroughly analyze the copious volumes of data retailers have been squirreling away.  CPUs are faster, sold state drives more plentiful, and new ways to store and search data are available.  My iPhone is more powerful than the computer used in the Apollo mission to the moon.

2. Unstructured data is everywhere.  The Web used to be where retailers published product information, but now users are generating the bulk of the content in the form of comments, videos, and "likes."  The variety of information available to retailers is huge, and it's meaning difficult to discern.

3. Everything is connected.  Looking at a report from my router, there are no less than 20 active devices on my home network.  We can track the location of mobile phones, tag products with RFID, and set our thermostats (I love my Nest) from a thousand miles away.  Not only is there more data, but its arriving at a higher velocity.

Careful readers will note the three Vs that help define so-called big data: volume, variety, and velocity. We now have more volume, more variety, and more velocity and different technologies to deal with them.  But at the heart, the objectives are still the same:

  • Informed decisions
  • Accurate forecasts
  • Improved optimizations

So don't let the term "big data" throw you off the scent.  Retailers still need to execute on the basics.  But do take a fresh look at the data that's available and the new technologies to process it.  The landscape will continue to change and agile organizations will always be reevaluating their approaches.  You just need to add some more weapons to the arsenal.

Wednesday Oct 03, 2012

The State of the Internet -- Retail Edition

Over at Business Insider, there's a great presentation on the State of the Internet done in the Mary Meeker style.  Its 138 slides so I took the liberty of condensing it down to the 15 slides that directly apply to the retail industry.  However, I strongly recommend looking at the entire deck when you have time.  And while you're at it, Business Insider just launched a retail portal that's dedicated to retail industry content.  Please check it out as well.  My take-aways are below after the slide show.

[Source: Business Insider]

Here are a few things I took away from the statistics:

  1. Facebook and Twitter are in their infancy.  While all retailers should have social programs, search is still the driver and therefore should receive the lions share of investment.  Facebook referrals are up 92% year-over-year, but Google still does 80% of the referrals.
  2. E-commerce continues to grow at breakneck speed, but in-store commerce is still king. Stores are not showrooms yet.  And social commerce pure-plays like Gilt and Groupon are tiny but worthy of some attention.
  3. There are more smartphones than PCs on the internet, and the disparity will continue to grow. PC growth will be flat and Tablet use will continue to grow. Mobile accounts for 12% of all internet traffic.
  4. A quarter of smartphone sales come from China, so anyone with a presence there better have a strong mobile strategy.
  5. 38% of people have used their smartphone to make a purchase, and many use their smartphones inside stores.  Smartphones are a critical consumer tool for shopping.
  6. Mobile is starting to drive significant traffic to e-commerce sites, especially tablets.  Tablet strategies are crucial for retailers.
  7. Mobile payments from the likes of Paypal and Square are growing quickly.  It will be interesting to see how NFC plays in this area.
  8. Mobile operating systems are losing market share to iOS and Android.  I wonder in Microsoft can finally make a dent?

The internet is being dominated by mobile devices, and retailers had better have a strong mobile strategy to meet consumer demand.

Tuesday Oct 02, 2012

Innovation for Retailers

One of my main objectives for this blog is to point out emerging technologies and how they might apply to the retail industry.  But ideas are just the beginning; retailers either have to rely on vendors or have their own lab to explore these ideas and see which ones work.  (A healthy dose of both is probably the best solution.)  The Nordstrom Innovation Lab is a fine example of dedicating resources to cultivate ideas and test prototypes.

The video below, from 2011, is a case study in which the team builds an iPad app that helps customers purchase sunglasses in the store.  Customers take pictures of themselves wearing different sunglasses, then can do side-by-side comparisons.


There are a few interesting take-aways from their process.  First, they are working in the store alongside employees and customers.  There's no concept of documenting all the requirements then building the product.  Instead, they work closely with those that will be using the app in order to fully understand what's needed.  When they find an issue, they change the software onsite and try again.  This iterative prototyping ensures their product hits the mark.  Feels like Extreme Programming if you recall that movement.

Second, they have time-boxed the project to one week.  Either it works or it doesn't, and either way they've only expended a week's worth of resources.  Innovation always entails failure, and those that succeed are often good at detecting failure quickly then adjusting.  Fail fast and fail often.

Third, its not always about technology.  I was impressed they used paper designs to walk through user stories and help understand the needs of the customer.  Pen and paper is the innovator's most powerful tool.

Our Retail Applied Research (RAR) team uses some of these concepts in our development process.  (Calling it a process is probably overkill.)  We try to give life to concepts quickly so the rest of organization can help us decide if we're heading the right direction.  It takes many failures before finding a successful product.

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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