Archive | May, 2011

2011.21 | Google Wallet Could Work

May 31, 2011 by Tim Dickey 1 Comment

I’ve derided attempts at a mobile wallet for some time.  I want it as badly as anyone, but it has been an elusive dream for years.

If you look through the blog you can see my reasons for this skepticism.  It’s never been about the technology – that capability has existed for years.  It’s about the infrastructure, consumer readiness and not adding fees for the service.  I’ve been thinking about last week’s announcement around Google Wallet, and it could work – in Canada at least.  Let’s discuss just a few reasons why their model could work.

NFC acceptability at POS – While articles I have read about the US and Europe have indicated that they have not adopted NFC strongly, numerous Canadian retailers have built NFC into their infrastructure as they were forced to spend millions on getting EMV in place.  The EMV upgrade caused thousands of pinpads to be replaced, and untold hours of software changes and testing.  It only made sense to include NFC in that process to make best use of the investment.

This investment places Canada in a solid position on the number of POS sites that can accept NFC payments.  Not convinced?  Consider just a few of the major retailers that accept contactless in Canada: Tim Horton’s, McDonald’s, Loblaws, Sobeys, Cineplex and probably many more where I haven’t used my NFC cards yet. (Let me know if you’ve seen it elsewhere in the comments!)  More sites where an NFC tender can be provided means more potential purchasing locations where a Google Wallet can be used, which drives potential use, and therefore more potential adoption.

One PIN to rule them all - Canadians have become accustomed to Chip and Pin over the past few years.  The unforeseen challenge of this new and more secure system is remembering PINs for multiple cards.  I have relatively few cards, but have 3 credit cards and a debit card.  Try keeping 4 pins straight in your head for whichever card you are using.  Using the same PIN for all four?  If you get filmed entering your PIN, you could be scammed on all of your cards.

If you use an NFC credit card, most retailers don’t require a PIN for purchases under a pre-set amount – generally $50 or so – particularly for their own cards.  I like using them for that reason alone.  Not entering a PIN at every transaction is a convenience to users and can speed throughput for retailers.  At the same time, having a single PIN on the Google Wallet means that the card could not be used unless that PIN  has been entered, providing an extra layer of security for an NFC transaction.

Usability – I’ve highlighted that any new payment solution needs to be extremely simple to use.  Your most novice user needs to be able to do this in 5-10 seconds flat in front of a queue of impatient people and a bored cashier.  The Google Wallet with NFC appears to get closer to this nirvana than other solutions.  My technologically challenged mother uses NFC cards regularly and loves it.  You “Tap n Go”.  Consumers can use the current pinpad at the POS just like they have done for years.  It’s comfortable.

Contrast this interface with Square as one example.  Square is an awesome idea and it looks slick, but is my mom going to use it?  Nope.  Too foreign.  It also requires the use of a solid data connection to work every time as transactions are completed via the network.  Anyone want to be held up relying on your local wireless coverage to complete a transaction? NFC gets around that by allowing the use of NFC which just requires the mobile device to be on.

Will my mother use this solution?  Probably not right out of the gate.  But a mobile wallet needs to be this simple to get widespread traction in the marketplace.  For those of you who may deride this need saying that our Gen Y digital natives are more sophisticated, watch your average mobile user at any point of service.

Many citizens (I didn’t say all – and they aren’t the only ones!) of this segment are so busy checking texts, talking on their mobile, or zoned into their own world listening to their iPod that they are often loathe to interrupt to complete a transaction. Mobile wallet usage needs to be so simple that one can open the app while they complete other activities while distracted.

I would also argue that Gen Y, while potentially more comfortable and trusting of technology than older consumers, are still subject to the needs of a simple user interface.  They are not necessarily any better at using technology.

Increasing Mobile Usage – While Canada lags behind the US in mobile technology, we are catching up.   99% of the 18-34 set have a mobile phone.  We are up to almost 25% of mobile phones with a data plan.  A target market of 25% of the population isn’t a bad starting point, and it will only grow.  This increasing use of mobile is also driving increased comfort with downloading apps like the mobile wallet.  Android is also gaining market share – providing a potential foothold.

The Google Factor  - Past attempts at mobile wallets in Canada have been pilots inevitably involving a mobile carrier, a credit card company, and a bank. Sometimes a credit card processor and/or a retailer got into the mix. All parties have been trying to figure out a way to split the profits for years – nobody has made it work.

Neither consumers or retailers will pay a significant fee for the privilege of carrying their phone instead of a piece of plastic. There has been no large monetary benefit to these parties to add additional cost and risk into the mix for the returns they have found or we would already have mobile wallets.  The carriers and handset manufacturers have not included NFC into the mobile handsets as they had no incentive to do so, and importantly – no universal application to leverage NFC if it were there.

Another problem is the issue of consumer acceptance.  Carrying a mobile wallet for every credit card, bank or other institution adds complexity, it doesn’t remove it.  Having a mobile wallet from some Silicon Valley start up you’ve never heard about – not going to do that either.

The difference here versus the past is that Google is looking for an edge over Apple and RIM.  They want and need to provide something the iPhone doesn’t have.  The handset manufacturers also want in on that.  NFC is a viable option they can provide.

To use that hardware, a universal mobile wallet from a trusted source is needed.  Google is a verb now – who doesn’t know Google.  The name Google Wallet doesn’t make you nervous – it makes you want to download the app.  They also provide the corporate clout needed to deal with the major banks and credit cards.

They are providing the hardware we could never get in the past, and a universal app that could allow us to use all of our credit cards in one trustworthy mobile wallet. These two elements, along with the benefits above, may just push Google Wallet into mainstream usage.

This isn’t even remotely a slam dunk.  At present this is going to be used in two test markets.  It only works with one phone.  It’s not offered in Canada yet.  There is no guarantee the credit card companies will get on board.  There will always be security issues.  EMV could force you to pull out your card anyway for a larger purchase.  If your battery is dead you have no wallet.

Many hurdles need to be overcome, but Google is moving us closer to the mobile wallet than ever.  Perhaps they could offer it on other platforms like Blackberry and Apple’s iOS.  Ideally Google’s initiative will drive other organizations to come up with their own wallets.  Paypal – perhaps.  Apple is likely to get in on this as well.  Having organizations like this behind a mobile wallet initiative can only move the ball forward.  After all, what’s left to add to our mobile gadgets?

dining & qsr, food & drug, general merchandise, retail
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2011.20 | Square = Payments + Filing Cabinet?

May 25, 2011 by Tim Dickey 0 Comments

Making payments via a mobile phone is not technically difficult.  What is difficult is making those payments as simple and ubiquitous as swiping a payment card at a point of sale.  

I reviewed all of the points needed to make a mobile wallet work 2 years ago, and we’re still waiting for the breakthrough.  (If we finally get NFC on iPhone 4S in September or on a new Blackberry – we may finally get a version of mobile wallet breakthrough courtesy of Apple trying to get a stranglehold on payments leveraging iTunes.)

Solutions like Square are really pushing the envelope, and that is great for the payments and technology industries.  It’s easy to get caught up in every day work and become comfortable and to say some things are just not possible.   

Sometimes it takes a new entrant who actually tries to do something obvious but so monolithic nobody wanted to tackle it to move a solution along.  While Square was originally envisioned as a personal or small business payment system, their latest attempts at installations in a couple of stores in New York City point to them attempting to move this sort of mobile payment system up the food chain to bonafide small businesses.

What is really interesting about the Square solution is not just the payment side, which has been languishing for many years now and will not be solved without bridging the points I made 2 years ago, but another attempt at leveraging e-receipts on the solution.  I have long been a proponent for at least shortening, and ideally eliminating paper receipts.  I pick up dozens of receipts in a week – just buying coffee or a juice, picking up a greeting card; you name it.   Let’s not mention big ticket purchases or the arm length tapes from grocery stores.  I scan significant receipts onto my PC or Evernote for filing and immediately recycle.  Who can keep track of all of the receipts, and is it worth it?  What Square attempts to do is leverage the integration of payment and mobile to keep a wallet full of those receipts on the customer’s mobile device, skipping the scan and file step.  The solution provides a benefit to both customer and retailer.  The customer gets a record of all of their purchases, and the retailer effectively gets a built in loyalty tracking system.  But when you think about it, what’s the benefit of knowing how many coffees or bagels you purchased to a client?  It’s not incredibly helpful.  Keeping the receipts for the last 10 visits to the local superstore where I bought a pair of pants that don’t fit my daughter that I need to return- that is much more helpful. 

So how do you get a receipt repository that would scale?  There are certainly a number of e-receipt solutions out there.  The problem is around getting some level of scale and a common platform people will use and trust. 

My contention is that the organizations best positioned to do such a thing would be the credit card companies.  The credit card companies are well known, and trusted with financial data.   The data for the transaction total is already passed to them and their servers.  It would be challenging, but much less difficult to add a transaction number or details to the data string sent back to the credit card company via the payment terminals.  While not all clients would use such a service, even a percentage of customer using e-receipts should drive significant cost savings in paper usage and returns fraud.  Given all of the negative press around credit card processors, expanding their business in a new direction to drive revenue from either retailers or consumers for a useful service.

Moving to a receipt free society is a significant challenge, but at least some organizations are trying.  The cash registers (ECR’s in fact) are not gone from the stores where Square is being tested and the first attempts at using were not very smooth – after all it’s a new technology and we should hesitate to trust cellular coverage so deeply to complete a transaction at present.  The wallet as receipt holder is still not there yet, and there are many, many operational hurdles that I haven’t even mentioned, but it continues to become more and more realistic to imagine.

dining & qsr, food & drug, general merchandise, retail
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2011.19 | Buy Now! | Try it on! | Pick it out!

May 17, 2011 by Tim Dickey 0 Comments

Buy Now! - I was interested to see that in Wired 19.05 (on the Wired iPad app) it is possible to click a button next to the profiled products in the Test Sections which takes readers directly to a link to purchase said item.  While the wizards at Conde Nast aren’t perfect (making me watch a video every time I go to the title page is annoying; losing track of my purchases of every single iPad Wired issue didn’t impress) this is a seemingly obvious improvement to magazines, which we all know are giant bundles of ads anyway.   Considering Conde Nast owns Vogue, this seems like a lucrative way to help fund the magazine and provide a very useful service. (They only won me back on Wired because 19.05 was free – good move Wired.)

Try it on! – A Topshop store in Russia recently toyed with a Kinect hack to build a virtual mirror.  While this is the second one of these I’ve seen in recent months, I’m still not convinced of their validity as a true selling tool.  Placing this in the middle of the sales floor is an obvious attention grabber for a one off situation (note guy holding tray of champagne), but unlikely to be a device used for the masses to sell more clothing.  It’s a really great technical trick, and fun for now, but the video doesn’t give me the impression of what the outfit would really look like if one was serious about buying it.

Pick it out! – Another kinect hack solved a more practical problem in my mind.  Picture going to the deli or the Starbucks and asking for that sandwich that you want in the front row in the second level of the glass display.  No, not that one, the one behind there.  Having been on both sides of the glass in retail, I love this hack that allows a person behind the counter to understand what item is being indicated by the shopper.  The kinect is configured to provide an image of what the shopper is pointing at.  Small benefit, but if you have a complex display and have to deal with hundred of shoppers the time and angst savings could add up.

general merchandise, retail
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2011.18 | Sizing Booth, Mobile Payment, Social Media Vending

May 4, 2011 by Tim Dickey 0 Comments

mybestfit – A mall near you may soon be featuring a booth that allows you to quickly know your size of choice at all of the stores in the mall.  The booths offered by mybestfit and currently installed in a Pennsylvania mall look very similar to full body scanning solutions see at the airport, but instead of scanning for dangerous items provide a very detailed sizing profile for users.  Given the ongoing vanity sizing taking place in fashion, this could be a very useful service.   While it doesn’t solve the problem of varying sizes at stores, it could take some of the guesswork out of picking the right size clothing to take to the dressing room.  Whether these booths use the same technology or not, the footprint is essentially identical.  This means that the biggest obstacle for this solution is removing consumer perception that ‘nude’ images of them will surface on the internet somewhere.  While they highlight that users stay clothed for sizing, I see no validation that privacy is assured and that no images are seen or kept.  This solution needs to be sold carefully to consumers and locked down hard against technically proficient attendants with, shall we say, a potentially loose sense of privacy and online behaviour.  I’m not suggesting that these points would be front and centre of their marketing plan, but there should be an FAQ somewhere.  I’m not shy, and I trust the airport security who protect us to a reasonable degree to keep images to themselves as a semi-official professional organization, but I don’t trust some person at the mall I’ve never met, and nobody else should either.  Privacy issues aside, if it works as advertised, it’s a very impressive and practical solution, and it would be great to see it in the local mall.

Mobile Payment – Much hyped Square had come under some fire from the payments industry for security holes, but is looking to move towards industry standards with some investment from Visa.   Also, for those of us with those EMV woes that may want to pay or be paid through these iPhone interfaces, iZettle out of Sweden apparently have an EMV flavour of card reading device.  As always, the mobile wallet brings controversy, multiple players, and no simple answer any time soon.

Social Media Vending Machine – Pepsi recently announced social media capability in a new breed of vending machines.  Users can purchase a Pepsi for a friend at a machine, and the friend can pick up their beverage at another social media enabled vending machine.  Users can send the beverage with a personalized text message or some macines will even have video message capability.   Check the video for more details.  It’s fascinating how vending and self-service are increasingly converging.  The improvements in technology seem to allow the only limit to the solution be the imagination of the responsible party.  That and a solid budget.  As these systems become increasingly complex, the support infrastructure behind it will need to become more robust than the person in the delivery truck unlocking the unit and emptying the coins.  The thought behind supporting solutions like these for the long term is as important as the idea itself, as this solution support – the infrastructure for the video, the supply chain for the merchandise, the ability to monitor the uptime of the system, and the ongoing care and feeding in general – will be what makes these solutions a success or a giant boat anchor.  A boat anchor with a large, blank flat LCD on the front of it.

food & drug, general merchandise, retail, social networking
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2011.17 | iPad Restaurant Menus

May 2, 2011 by Tim Dickey 5 Comments

I was out for dinner this weekend at Baton Rouge and had the opportunity to peruse their iPad menu.  This was a surprising treat as restaurants I’ve visited before – Jack Astor’s has iPad menus as an example – have been reticent about giving me a $500 electronic device with 2 children under 10 at the table with me.  Seems like a fair assessment of risk, and I don’t blame them.

Is the iPad menu a gimmick or the menu of tomorrow?  As with every other retail technology, we have to consider benefits to the business owner, the diner and also the ROI.  Here are my thoughts on based purely my single menu experience.

User Experience – The iPads are provided in a protective leather like case, much like a traditional paper based menu in this environment.  They are quite heavy compared to standard paper menus.  While not a showstopper, carrying iPad menus for our table of 8 made for quite an armload for our server.  The app used on the unit appeared to be from an outfit called Menu Live. [I couldn't find more online - if someone knows more - let me know in the comments.]

The app was as well laid out and simple to use.  It made use of a relatively standard ipad app interface with scrolling and graphics that fit the look and feel of the restaurant brand.  On the positive side, it was possible to see images of all of the dishes.  This was a definite plus in the opinion of the ladies of our party and not generally something you can do with a regular menu.  Unfortunately, they had only one image of a dessert, and it turns out everyone likes to see photos of desserts.  On the negative side, the iPad screens felt strangely small for a menu.  I hadn’t thought about it prior to this visit, but menus are generally a much larger format in my experience.  There was a useful feature in the menu that allowed the diner to add potential options to a favourites list for easier ordering, but I didn’t really use it.

I found it difficult to remember where everything was as I went through the options.  When I look through a menu I remember where an item I want is in the ‘book’ – the page, the section, or what have you.  The endless scrolling format of the menu didn’t provide that same bookmark in my mind, and for some reason I didn’t warm up to the favourites list.   The app did have well placed and easily accessible sections at the bottom of the screen, but using the app felt too different from a regular menu.  I would have preferred a menu that allowed me to swipe from side to side with page animations.  Something that looks more like a regular menu but could also leverage some of  the features above.  It reminds me of how Amazon added page numbers into the kindle for book clubs after complaints that there was no consistent way to share a location in an eBook.  This came about because book clubs are about sharing as part of a community.  Dining out has a similar element to it.  Whenever I eat out, all of my fellow diners ask each other what we are having and then read that item in the menu.  It just feels more natural to go to a page number.

ROI - The staff indicated that the menus are sponsored by a beer company.  Right at the beginning the diner watches a very brief and not unreasonable ad for beer.  You can also see the little logo in the bottom left hand corner of the image.  This makes some good sense. Even though the restaurants using these menus are relatively high end, having 10′s of iPads and associated charging gear in the establishment is a signficant investment.  This is the kind of investment that is best supported by advertising.  If the restaurant isn’t paying, they are certainly staying in the black.  One must wonder, however, how much of this investment would continue to be borne by a third party.  What about menu updates?  What about adding a card with today’s specials? Does this arrangement mean that the menus go away after a certain time?  I’m curious as to whether the menu app is tracking what customers are looking at or not and whether the data is analyzed. That could be an additional value.

Ongoing Support - Adding new technology to a restaurant will always impact the staff.  Whether owned by the restaurant or not, there is a cost to handling these devices, and while it is arguably a sunk cost, there is effort involved.   Staff now have two types of menus to worry about – a potential issue for consistency with pricing or menu items.  Staff have to ensure units are charged.  Staff have to carry the units around and ensure that nobody steals or damages them.  

iPad Lockdown – The app itself is great, but there was no kiosk-like lockdown app on the iPads to lock them down.  Why is that important?  A couple of my friends are keen to explore technology and are open for fun on Saturday night.  That means that the first thing that they did was go out of the menu app and start messing around with anything but the menu app on the iPads.  One changed the default language to Korean.  I’m sure the folks at the restaurant will enjoy re-setting that.  It’s tough to do when all the menu options are in characters you can’t recognize.  My other fellow diner logged into Game Center and was disappointed he couldn’t play Angry Birds.  It was possible to take screen shots with the front and top button and placing those images in the photo app.  It was a fun trick to take a screenshot of the menu and then open the photo app so that my fellow diner could not figure out how to get off the page she was on because she was looking at a screenshot and not the menu app.  I shudder to think what would happen if these were iPad 2′s with cameras.  There was an administrative option in the app that allowed menus to be reset for new customers, so the app was reasonably locked down, but even that should be a little harder to get at.

The app is well done, and it looks great, and absolute full credit goes to those behind this idea.  At present, my assessment is that these menus are a fad.  With respect to customer benefit, it was a fun experience to muck about with them, but they didn’t fundamentally improve our dining experience.  All of us had used iPads before, so even the novelty was slight.  Beyond the photos of the food, there wasn’t much additional value to the diner.  There was little that couldn’t be done with a traditional paper menu.  While photos were nice, it’s primarily a restaurant for steaks and ribs, and the look of the entrees doesn’t change radically.  My fellow diners wanted to know why we couldn’t place our order directly, or page the waiter or pay on the device.  I can’t speak to what the restaurant owner gets from the iPad menus.  Even if there is no hardware or software cost to the owner, if there is no benefit from the perspective of the customer, and the staff encounter additional effort, I don’t see these units lasting too long.

[Update May 2: Looks like someone is listening.  E la Carte has an interactive tablet that lets diners order and pay as well as read the menu. ]

dining & qsr, retail
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