2009.43 | Experience Based Retail

500x_Microsoft_Store_topRetail is certainly moving away from the old fashioned stores we knew as children, where one walks in and just buys something off the shelf.  With so much competition, convenience and so much available for purchase online, it seems inevitable that many specialty retailers will work towards experience based retailing to differentiate themselves.

HMV announced this week that they will open a movie theatre above a store in London.  Microsoft opened its first “we’re hip like Apple, too” Store this week in Arizona.

At the suggestion of Steve Jobs, who is on their Board of Directors, Disney is moving in the same direction, and are reputedly looking at a major overhaul of their retail chain which is expected to leverage the same interactive store model and wireless handheld POS as the Apple store.

On the content side, Disney’s Keychain solution promises consumers the opportunity to use media across platforms. This seems like the answer to the age old problem of buying the same media on multiple formats (anyone remember betamax, VHS, DVD, Blu-Ray), but its use will certainly depend on what price they are looking for as well as the requirement for one to be online all the time to consume.  The technology seems solid as long as consumers can get past the need for the tangible item – did I mention price and bandwidth?  Downloaded a 2Gb movie lately?  Yikes.

In the world of experience with self-service, Tesco opened its first all self-checkout store this week in the UK.   Now they have full self-checkout – assisted self service, really – on two continents.


2009.42 | Squareup = Squirrel Payment Plan?

Some time ago there was word that Jack Dorsey, one of the minds behind Blogger and Twitter was working on a consumer payment system for mobile phones codenamed Squirrel.  More details have surfaced (allegedly)  on his plans: (via)

  • the service will be called squareup.com.
  • it uses a hardware dongle that attaches through the headphone jack of the phone
  • signatures are used on the touchscreen for security validation

It’s a great attempt, and those involved should be lauded for trying to push the industry closer to the dream of an electronic wallet.

Here are some concerns with this sort of implementation – if it’s actually real:

  • hardware – Having one more piece of hardware to carry around is likely to push this service in the wrong direction.  It’s hard enough to remember headphones, bluetooth accessories and your phone, let alone having another 1/2 inch square piece of plastic in your pocket.
  • complexity – this implementation seems to require interaction between the consumer, the POS and their phone.  The process appears to be:  user puts dongle on phone, says they want to pay with mobile, clerk hits button for tender option, customer waits for amount to show on screen, takes time to sign his signature, hit go, clerk waits for approval and accepts.  On first blush this is clumsy and if there are multiple steps errors will be made, and consumers and clerks will get frustrated as it takes too long.  As mentioned before, payments of any sort have to be dead simple for them to be successful – particularly in front of the audience of the rest of the people in a queue.
  • signature validation – signatures cannot be seen by the clerk, and there is a potential for chargebacks as clients say they didn’t sign for it
  • EMV – there is no integration with EMV mentioned – not a problem in US – yet – but it is a problem for the rest of the world
  • security – it remains to be seen what stops others from using someone elses stolen phone to access all cards, though there are probably pins involved.  If there are pins, its one more step for consumers to pay.
  • transaction time – how long does it take for data to be shuffled back and forth – if the payment time isn’t similar to a current electronic payment, it will frustrate users and store staff.

The good news is that this system may get around the prohibitive cost issue of the electronic wallet, with mobile carriers, payment processors, and other parties crowding the payment percentage cut off the top of the payment.  If squareup is the sole organization you deal with and they work through the whole payment process, it could remove that major roadblock to the electronic wallet.  This is probably not the end product, so let’s hope they work through the items above and pave the way to the electronic wallet!

2009.41 | Well Known Brands, New Ideas

Microsoft has been hatching plans to open stores to rival the Apple Store for some time.  Check out some of the concepts, including wall-size screens and many key attributes in common with an Apple Store.  Not surprisingly, Apple is retaliating by updating their look.

JCPenney, Tiffany & Co. and Macy’s are both pushing new mobile multichannel applications.  A logical step given recent research showing consumers embracing mobile channels.

e_omf_thumbnailIn a move to differentiate itself in the cluttered credit card landscape, Canadian Tire and Canadian Tire Bank have launched the first curved credit card in Canada, while Visa Canada will be launching the first contactless debit card program in Canada.

2009.40 | Service Options

Providing a new service option to consumers necessitates giving them an advantage by using it; whether the advantage is convenience, speed of service, access to special percs or many others.  If there is no benefit for the consumer, there is no incentive for them to leverage a different service option.  Any well run consumer facing organization will seek out opportunities to provide customer benefits to differentiate their business and increase the top line, while leveraging cost streamlining benefits to improve their bottom line.
Here are a few positive examples observed over the past week:
Hertz – I returned my rental car to the Vancouver Airport very early in the morning and had to drop my keys in the slot.  A sign on the box indicated that rental receipts are available for download on their website within hours.  Based on entering a drivers license or credit card number, the Hertz site provides all receipts over the past 6 months, so I was able to pull all I the statements I needed electronically to complete my travel expenses.  Benefit to the consumer?  Instant gratification, a paperless transaction, no agent to call to request the receipt, and increased convenience.  It also takes effort away from Hertz agents, reducing cost, and making staff available to people that require live assistance.  The consumer gets convenience and improved customer service, and the consumer facing organization can leverage cost savings.
Starbucks – I have been looking forward to this sort of application as the future of retail for some time, and it appears that the future is almost now!  mFoundry is working with Starbucks on a pilot that will allow mobile based payments via 2d barcodes as well as balance checking and other information for Starbucks card holders.  Once again, consumer and retailer obtain benefits from this solution.  The consumer has potential for a simplified transaction flow, shorter queues, faster service, and a novelty factor that suits a segment of the Starbucks clientele.  Starbucks increases throughput with reduced order and tender time, provides a useful and simple customer service alternative, and aligns themselves more closely with their customers by establishing a hold on one of the most important access points – their customers’ mobile device.
5494_128773267062_106593592062_3004057_6437802_nCoca-Cola – I picked up the most recent Fast Company magazine, and read the lead article on Coca-Cola’s David Butler last week. A key component of the article concerns the new Coca-Cola Freestyle soda fountain.   In contrast to traditional self service soda fountains located in Quick Service restaurants, the new footprint boasts a digital LCD interface and technology that shrinks the required raw materials allowing users to access over 100 beverage choices instead of the 6 or 8 generally available today.   The benefit to the consumer in this case is the vastly expanded product selection.  The retailer (and manufacturer) benefit is providing more product selection in the same store footprint, and the capability of leveraging the electronic brain of the soda fountain to ascertain popularity of the beverage options – providing useful and as yet unmined sources of data about consumer preferences in this segment.
%d bloggers like this: