2016.02 | mobile wallet strategy

14DD1532-L-Mobile-Payment-CD372_52a_PCR_SPINX_Gas_Pump_Mobile_phoneOne of the most common areas that challenges retailers these days are mobile payments – or as many of them refer to it – leveraging a mobile wallet – which I now interpret from retailers to mean paying without a card or currency versus a specific mobile wallet platform.

I’ve written a number of posts on the subject of mobile wallets over the years, usually lamenting that we will never get away from a physical wallet. The potential for shoppers to not use a physical wallet are certainly more realistic now then when I wrote those posts, but the process continues as an evolution and not a revolution.

The common nirvana that all retailers seek is the ability to seamlessly and simply accept all payment options desired by the majority of regular shoppers while being able to provide a personalized and loyalty building experience. The challenges restricting vendors, payments providers and retailers from that objective are legacy systems, budget, agreements with payment processors, and time to build these payment connections into their systems.

Mobile payments are certainly a part of that over-arching strategy of enabling payment, so what is the best strategy? That will differ by retailer, but there are some universal concepts to consider:

  • To start, target your end state, and attempt to draw the long map back to where things are today. Even if there are gaps, talk to retail solution vendors, payments vendors, card providers, banks and anyone in the industry to access their vision and experience. Keep in mind that all of the technology will change in a few months and it will need to be re-assessed. Basic long term planning as should be targeted for all large scale retail solutions.
  • Don’t get stuck on offering payments within your in house mobile app, UNLESS your app provides a unique value proposition to the shopper that you are trying to leverage and payments is a logical extension of that app.  In my admittedly anecdotal experience, users have lots of apps already, and don’t look for more retailer apps as a rule UNLESS they provide a unique value proposition that fulfills a need to them.  Your most loyal customers may want your app to be able to pre-order their meal, control your fuel dispenser, or buy movie tickets, and it makes sense to enable payments to conclude that shopper interaction.  Make that in app payment as simple as possible with services that can remember the card or retrieve it with a password.
  • Consider the payment options that are already in use or are desirable for your shoppers.  If your shoppers are using credit cards, encouraging them to use a debit driven solution as part of a mobile solution is a challenge.  If you want to drive a particular payment model, be prepared to encourage shoppers with points or deals. Bitcoin sounds cutting edge, but is it worth accepting as a tender for the volume of business and it’s volatility? Having a gift card balance for coffee makes sense, but for groceries it is not logical. If the payment option you need to enable is not available, push the vendors for it.
  • How would a mobile wallet be used at the front end of your store?  If it isn’t dead simple for both shopper and cashier, it’s going to slow the queue and increase wait time.  That is a tough sell for any retail environment, and death for a high velocity retail environment.
  • Consider the full customer interaction with payment integrated. The challenge often encountered is that the majority of retailers have a loyalty program of some type. Shoppers need to identify themselves to obtain their loyalty benefits. With a mobile payment solution, shoppers generally have to show a loyalty card on their mobile, and then use the mobile to pay. Having to scan two different codes or tap more than once seems redundant, but this issue is often not easily solvable today at a traditional point of sale, as loyalty members have to identify themselves PRIOR to tendering to obtain discounts, collect points, etc, and THEN they pay the calculated total at which they pay with their device. (Starbucks manages one scan by using a stored value card tied to a loyalty account. Mobile apps to pre-order food, control a fuel dispenser or buy movie tickets have users registered with details stored and payment can be online by storing a card, so no double tap there either) Consider options to avoid the double tap/scan.
  • apple walletConsider Apple Pay and Android Pay if they make sense for your business.  With Apple Pay, there is some benefit to the security of fingerprint verification for retailers, and it is relatively easy to use with the iPhone and Apple watch, and getting notifications of payments immediately is certainly useful to some shoppers as is the ability to not carry their card.  In Canada the limitation right now is that Apple Pay only works with Amex.  Android Pay is another good option, particularly if you have an Android heavy shopper base.  The downside is that there are additional fees for these solutions.
  • Ensure you support and train users and store staff well on all the payments provided. There is nothing worse than having a customer trying to love your brand and pay with a new option and they cannot.  Payments are getting increasingly complex, but cashiers are catching up.  Many of them have received on the job training from bleeding edge shoppers who attempt every new payment and are willing to risk embarrassment or rejection with new payment types, but it would be better to have a complete map of payment options laid out simply.
  • Leverage your pinpad or contactless reader as much as possible for payments that are not over the air. Whether shoppers have to swipe, dip, tap, or enter a PIN; whether they use a card or a mobile device, the pinpad is currently the interface to which shoppers are accustomed. Keep the transaction and the payment linked physically.  If the transaction is on the mobile, pay on the screen of the mobile.  If the transaction is at a device (POS, Fuel Dispenser, Vending Machine, Ticket Dispensing Kiosk) keep the payment interaction connected to the device and pinpad.  Geo-fenced and over the air on the mobile screen solutions are an awesome concept, but are a challenging jump in logic for most shoppers today.  Unless you are a bleeding edge retailer, that is one for the future.

There has to be a benefit to both the retailer and to the shopper for there to be a reason for mobile payments, and the benefits are slowly tipping the scales towards increasing the usage of mobile.  There are too many things that favour it, and the landslide of devices in the hands of millions means it’s coming sooner or later.  Be sure to stay ahead of it and have a strategy.

2015.01 | mashgin

CaptureA new technology from mashgin promises to simplify the cafeteria line. Clients set their food on a scan table and the system identifies all of the food items with an imaging system, looks them up in a product base, calculates the total and charges the client automatically.

From the video demonstration, mashgin’s simplicity should make it a winner with customers. The concept works fast and simply, as it would need to do in this challenging retail environment. There are a number of factors which will influence this concept’s success as a full blown product.

Price – A POS for this type of environment is relatively inexpensive and can probably be had for $1000 – much less if a simple ECR is used. If this device can be had for that price range it could certainly be a winner. If significantly more expensive, it may be tough to win over cost conscious operators.

One could argue that a cashier could be removed from the equation to drive a huge ROI, but it will require a huge leap of faith for an operator to believe that all clients can be trusted to place all items on the scanner. The fear of shrink will probably mean a longer timeline to remove a cashier.

Another potential selling point is utilizing multiple devices with one cashier overseeing them as is done with self-checkout implementations. This is a more viable argument and potentially a better use of the cashier resources.

Payments – My experience with small transactions is that the longest element is tendering, and not scanning. While that seems counter-intuitive, tendering is never completed with a simple universal system in the real world. People pay with cash, credit, debit, and mobile devices now.

It will be important to incorporate payment into the system in a simple way that keeps flow moving.  The concept solution shown assumes a mobile solution or use of a credit card with an MSR slot.  Apple Pay or NFC cards could work well here. The the MSR card reader slot should be eliminated – that will need to be updated to as EMV is adopted in the US and many international markets.  My personal preference is to use an NFC card for food service payments so I can avoid entering a PIN.  Expect US fast food organizations to embrace NFC, beacons, or other options more fully once PINs become more common and a simple swipe of a credit card is replaced by people having to enter a PIN at POS; slowing the queues.

CaptureCustomer Choice – While the system appears entirely intuitive, there’s always a subset of clients that will struggle or reject self service. Some accommodation will need to be made to serve those that don’t wish to use self service. Some customers consider fast service to be good service, while others prefer the human touch. Ultimately the customer is right. Operators will not want to eliminate any potential revenue sources and will want to support any clients that want to eat.

Fraud / Incorrect Reads – The system will require monitoring to avoid shrink. What if two bars of chocolate are set one on top of the other so that the imager sees only 1 item and charges for one? What if the organic coffee is purchased instead of regular? A cup of coffee looks like a circle of black liquid to the imager – it’s impossible to tell without asking the customer or watching them.

Operations – Even though the system works quickly how the flow works in the restaurant environment will require some significant consideration. How many units should be used? Where should they be placed? How many attendants are needed and how are they best deployed? How are exceptions like a system reading a plate incorrectly or an item missing from the image database? How should the queue be arranged for best use of space and simple flow? What if customers have coupons or vouchers or some other discount?  How are the units updated?  Where does the database reside?  Is it simple for local staff to amend and update the product base?

While its certainty not fair to expect a fully developed system from a concept video, it’s important to think through the entire transaction. This concept has much in common with other self service concepts and the issues above are common to all.  All of the issues above are certainly addressable with some thought and an operator devoted to working through the solution with mashgin. I would happily use this sort of technology and look forward to seeing a fully developed iteration in a cafeteria line in the future!

2014.21 | poynt

With so much re-invention focus on payment with the likes of Square, Google Wallet and Apple Pay, it’s no surprise that someone in silicon valley decided to take a run at updating the old school point of sale payment terminal. Poynt is the iPhone to the traditional point of sale pinpad’s Blackberry.  It will be interesting to see if it takes off in the same way that the iPhone did. Poynt’s device is certainly different than it’s more traditional competitors in looks and basic utility.  The unit has a sleek contemporary look that utilizes an android tablet and has no physical buttons for pin entry.  Like other newer units, it has all the standard payment interfaces – MSR, EMV, and NFC – but also adds a PoyntQR/barcode imager and a bluetooth antenna.   Poynt also has a basic built in point of sale software solution, and a Software Developers Kit to allow others to build applications that can run on the platform. On the plus side, Poynt certainly has a look that retailers can embrace.  It takes point of sale pinpad terminals away from the spongy buttoned senior citizen’s calculator look to a software based, touch driven, futuristic device.  Every base is covered with payment options with all of the capabilities included on the device.  All of this is positive for the right application. For high volume retailers, this may not be the right device.

  • With two screens, the device appears to be designed for an interaction sitting on top of a counter that starts with the store associate entering data on the device and then passing it to the customer for payment entry.  This is sub-optimal for a high volume retail environment where every motion counts.
  • The device does not appear to have any security mounting options beyond a kensington type lock interface.  Given the need/desire for tier one retailers to mount devices on checkstands, selfcheckouts and more, the device cannot be mounted in stores with certainty that it won’t be stolen for attempted security incursions.
  • Touch screens are still an experiment for payment terminals in North America.  Shoppers are accustomed to buttons for pinpads.  Shoppers at tier one retailers are more than just twenty something hipsters in New York ordering cronuts who want to try the latest thing.  Most shoppers at high volume retailers want to get through the line.  Our moms need to know how to use this thing and get through the line in seconds.  This is certainly less and less of a problem as time passes, but the issue is still worth noting depending on the target market of particular retailers..
  • Pinpads take a lot of abuse in retail.  Mobile phones and tablets are replaced by consumers every 3-4 years.  Tier 1 retailers often target keeping devices for 7-12 years.  Can these devices last this long?  Certainly the software aspects mean that the devices can be updated over time, and looks can even be changed over time.
  • Most of the traditional calculator looking pinpads have some sort of privacy shield.  This device has a screen that is quite large that may be difficult to use without sharing your pin with the entire staff and entire shopper population.

This is not to say that Poynt was even built to deal with these challenges.  Poynt is solely a better looking device that enables every type of payment interface possible.  Selling payment terminals is a messy business.  As articles on this device point out, payment device vendors need to convince payments processors and banks, and to a lesser extent retailers, and not consumers, that their devices are worthy of certification and usage at point of sale. Poynt raises the bar and provides a fresh perspective, and for that alone, it is worthy of consideration.  While other articles seem to focus on the old school nature of pinpads on the market, in Canada, there have certainly been changes in recent times with the move to EMV to newer sorts of pinpads like those provided by organizations like NBSPS that have features like sleek good looks and audio prompts. EMV requirements in the US means that timing is good for new devices, and Poynt should take advantage of that change.  No matter whether Poynt takes off or not, it certainly provides other vendors the opportunity to change the paradigm that embodies the conservative payments industry.  I can’t wait to use a touch screen pinpad.  Expect it to become common sometime soon.

2014.20 | coin vs plastc

The newly hyped Plastc sure looks a lot like Coin – both are electronic replacements for the plastic cards carried in the wallets of consumers.

Let’s revisit that product and see how it stacks up against Coin, especially given all of the recent hype around alternative payment schemes such as Apple Pay.

CaptureC O I N 

Coin raised some serious concerns for me when it was first revealed – from the original post.  Since that post, additional information is available from the Coin site and FAQ.  Here are the concerns I had with updates from Coin:

  • Acceptance – Retailers and their staff may have some qualms about scanning a relatively unknown black electronic device across their pinpads. Education will be needed for store staff to be confident that this is a valid technology to use for payment. If this is not achieved, everyone that spent $100 will be out of luck when they go to pay with their single card.

[UPDATE: The FAQ indicates that card branding and details will be visible on the screen of the card.  This should help with this challenge.  In the intervening year since Coin has been under consideration there have been so many new payment schemes that have popped up in the media that as long as a card scans, store staff will probably not question it too deeply depending on the transaction value and type.]

  • Fraud – What stops a Coin user from stealing cards and putting a number of them onto the Coin card to complete fraudulent transactions? Hopefully there are some measures to verify that the person scanning the card is the rightful owner of the card.

[UPDATE: The FAQ indicates that the card owner must have a card in hand in order to enter it into the database.  A mobile app takes an image of front and back and matches it to an MSR swipe.  The system also requests a temporary authorization on the card in an amount that must be validated by the user by looking at the account online.  That’s a clever move and reduces the potential of this card becoming a tool for fraud.]

  • Dishonest Store Staff – If one can easily flip through all my cards with the touch of a button, there better be a PIN lock on it to do that, otherwise you just gave a cashier in a restaurant ALL of your cards. Hit the button and swipe to capture all of the numbers. If they’re not dishonest, they may accidentally select the wrong card by selecting a button.

[UPDATE: There are no details I could find on the FAQ that indicate that there is a PIN lock to stop someone from sorting through all of the cards on the device, though there is reference to tap code that may serve this purpose.  As the device is swiped as an MSR, this would indicate that if you hand that card to a server in a restaurant and they take it to a POS to scan, they could theoretically scan all of the cards on the Coin device to capture all of the account numbers if they are familiar with it. While the device avoids the concern of being a fraud tool, it doesn’t really protect the user in the restaurant scenario any further than current 40 year old MSR technology.  As a consumer I would want to know if the tap code locks a particular card for use on the device.]

  • User Validation – How do stores validate that the user is who they say they are? Is there a signature on the back of Coin? Does it show the card number and expiry date on the screen? Is a Drivers license needed for verification every time?

[UPDATE: There are no details on the site other than the fact that the Coin will display the card details.  One can only assume that a cashier or server would ask to see your drivers license or alternative ID to see a signature for validation. Probably necessary to carry ID anyway, but it really negates the point of having a cool device for payment when users scratch a line onto paper to prove who they are.]

  • EMV – Consumers in many parts of the world outside of the US no longer use MSR cards, and we can expect the same in the US over coming months and years. I see no chip option available but perhaps that is a future consideration.

[UPDATE: Coin it its current iteration – not released yet by the way – will not support EMV.  This is a serious shortcoming that becomes more crucial over time.  As a consumer I see little benefit to purchasing a tool like this that will only be usable in some places when EMV takes hold.  Also: International markets can’t use this solution – that’s disappointing for us.]

  • Contactless – I like using the contactless feature of my cards to make my purchases quick and simple. No indication that coin has NFC capability

[UPDATE: No indication of NFC or other contactless capability.]

Some other interesting points that came available after the original post about Coin:

  • Coin uses low energy bluetooth connectivity is used to remind users that have left cards behind via their mobile device.
  • The device is supported via an app for both apple and android mobile devices.
  • The device uses a non-rechargeable battery targeted for 2 years of usage.  Mileage will vary.

As a Canadian, Coin in it’s current iteration won’t work for me – it’s not targeted at international markets.  A US consumer may find it useful, though I have concerns about security and the real benefits.  Also in the currently prescribed video of an affable dude with a beard showing us the solution, Coin should really scrap the big wallet.  Do people who want a single card really carry a George Costanza wallet after they get this sleek new device?  I think not, but that’s just one voice.   All kidding aside, the Coin solution is intriguing.  Bringing something new like this to market is very difficult and they deserve full credit for pushing the idea; it’s certainly a credible concept.

P L A S T C

CaptureLet’s consider the same real world concerns for the newly unveiled – and yet also unreleased – Plastc.

  • Acceptance – Plastc has an e-ink screen that covers the bottom third of the front of the card.  This allows for graphics and details to be shown on the card that should lend it credibility when it’s used for payment.  That same e-ink screen is scannable with a barcode to allow the use of loyalty cards with it as well. Another point of consideration is EMV.  With future EMV capability, store staff have no reason to look at cards.  In fact, once consumers and staff are accustomed to staff NOT having to check signatures, the need for the laughable security measure of checking signatures becomes aggravating to staff and shoppers alike.  (Ask Canadians about visiting Gap Brand stores – a rare holdout that checks signatures – it annoys all.)
  • Fraud – Details are less specific, but the Plastc Wallet mentions the requirement of a facial scan and authentication.  Details of how cards are added are not provided at present.  The card shows an image of the cardholder, which should also be useful in minimizing fraudulent transactions.
  • Dishonest Store Staff – There is a PIN on the card, but the site does not provide details on whether the card is locked when cards are passed to staff.  That said, the card supports NFC and ships with a chip that will enable Chip and Pin / EMV in future, so there is less need to leave a card with a server or cashier, reducing the potential for card number capture.
  • User Validation – At release, signatures would be used.  Signatures could theoretically be stored on the e-ink screen, but there is no indication of signatures shown on screen.  Once again, with NFC and EMV options, the necessity of a signature is avoided, and the use of a PIN or just the NFC itself simplifies the validation.
  • EMV – The card has a chip to be activated later via a software update.  This is key for future proofing with EMV coming on the scene in the US in 2015, and opportunity for international usage.
  • Contactless – The card has contactless capability.   This avoids the need for signatures, enables small value purchases and reduces fraud compared to MSR options.

Other points:

  • Like Coin, Plastc uses Low Energy Bluetooth to alert users to cards left behind.   The card automatically locks if left behind.
  • An app is used to manage account information stored on the app.
  • Barcodes can be put on the screen and shown for scanning. This means that the Starbucks app could be enabled to work with it.
  • The NFC function could also be used for access doors to add additional card functionality
  • The Plastc card is rechargeable on a wireless charging pad. Entire lifetime is not indicated.

Both the Plastc and Coin cards aim to eliminate all of the cards we carry in our wallets, and both appear to have created the miraculous with such tiny hardware.  Both certainly represent viable options, but given the need for a chip in particular and contactless to a lesser degree, the edge goes to Plastc.  While some pundits may suggest that mobile programs like Apple Pay would supersede card hardware like this, but the complexity of payments is such that cards will not go away quickly and card solutions definitely fulfill a need for an interim solution to move us all to the mobile wallet.  It’s hard to say if consumers will shell out $100 or $150 for the convenience of cards like these, but one must wonder if the card companies may not eventually decide to fund such things.

2014.18 | iOS8 for retail

CaptureiOS 8 will be released this week.  Among many changes to the operating system for apple mobile devices, there are a number of changes that are worthy of consideration to retailers.

Apple Pay – The moment Apple Pay was released, a flood of POS providers showed their support and ability to enable Apple Pay on their platform (my own employer among them).  Apple are releasing the program in the US with support from a number of well known tier one retailers.  While there is no way of knowing whether showing an apple logo on the retailer’s door will get people to finally jump to a mobile wallet, it’s a good strategy to keep options open in the event it becomes a commonly requested payment method.

apple-pay-retailers-iphone-6-announcementRetailers in Canada that implemented new pinpads for EMV  over the past few years enabled NFC on those pinpads as a matter of course.  With that NFC capability, they should be well placed to enable Apple Pay when it becomes available in Canada.  US based retailers that do not currently have NFC capability and are working through EMV certification would do well to include NFC and Apple Pay integration as part of that process.    The incremental cost of enabling Apple Pay as part of an overall EMV effort is likely to be minimal.  While it would be optimal to deploy quickly to take advantage of consumer interest, EMV takes time and if the devices onsite do not have NFC capability, a deployment of new devices will be necessary.

It will be important for retailers to track where and how Apple Pay gains traction.  The area of focus may vary – hospitality and small transactions could be the sweet spot, but perhaps it will be popular with shoppers at luxury retailers.  Retailers should watch closely and ensure that their shopper’s preferences are fulfilled.

Photo 2014-09-15, 9 09 00 AMScan Credit Card for eCommerce – While much was made of the ability of scanning scan credit cards to add them to Passbook, the ability to scan credit cards into Safari for eComm purchases is also a nice addition.  As someone who makes eComm purchases on my mobile devices for items such as movie tickets, making a purchase is an effort.  Shoppers must TYPE their full name, credit card number, expiration date and card security code.  I have those memorized, and it’s still clunky to do on a mobile.  For some retailers one also must type in a verified by visa password.   If that whole process can be replaced by a scan from my phone, or an autofill from my safari keychain, it saves a whole lot of typing and removes obstacles from mobile purchases.  Retailers who enable this function are likely to drive more sales through their mobile channel with the removal of obstacles.

Capture2Location Based App Shortcuts – On earlier versions of iOS, Passbook provided a lock screen notification for Starbucks if you were in a store.  Passbook also provided a lock screen notification for a plane or movie ticket if the time for the ticket was approaching.  While this was a convenient workaround an unnecessary pin code entry, it also required some setting changes.  For Starbucks, users had to identify “favourite” sites that enabled Passbook to provide the lock screen notification for Starbucks payment.

iOS8 provides a non-Passbook lock screen shortcut in the bottom left of the screen based on your GPS location.  Users have noted that their iPhones with apps from Vons, Tesco, Starbucks and more  show an app icon in the bottom left of the lock screen.  When users swipe up on the icon at bottom left, the app is opened with out a PIN [Update: you still need your PIN to access the full app.  Passbook = no PIN).    While it may appear that beacons are at play, it sounds like it may be driven by GPS as some users had no connectivity at the time.  One user also indicated that a Costco icon showed at the bottom left even though they did not have a Costco app installed.

Retailers stand to benefit from reduced barriers for shoppers to use their mobiles once again.  Making an app easier to access while actually at the retail location is a great idea.  Providing a visual cue right on the lock screen is even better.  This access sets the stage to enable retailers to bring online and stores together with some unique functionality.

CaptureHey Siri! – The latest iteration of Siri allows users to access the personal assistant without having to push a button.  iPhones can now listen for users to ask for help.  Siri is also finally going back to its roots with integration to more services.  Siri is able to listen to songs for you with Shazam to find and purchase the name of the song/tv show/movie you are observing.

While Siri will be a great sales tool for Shazam and iTunes to sell it doesn’t help other retailers much on the surface, but it does indicate a possible door widening to integration with other services.   When Siri was originally launched, it connected to 45 services, but after Apple bought them, it connected to only 12.  The founders of Siri are working on another service – viv – that promises to take the personal assistant to another level – and ideally connect it to a plethora of services that can access it via natural language.

Retailers that can make their transaction engines available to channels like AI personal assistants will be exposing their products and services in a new way.

Privacy – In past iterations, mac addresses were easily harvestable from idevices by pinging them with a wifi signal.  In essence, ‘free’ consumer tracking was possible.  With iOS8, iDevices provide a pseudo MAC address until consumers actually establish a connection with the wifi network.  This means that retailers and other consumer facing organizations will need to track consumers via an iBeacon option or even through accepting a wifi connection with shoppers.

Making the MAC address data private is the right thing for retailers and shoppers alike.  All retail programs should be opt-in and retailers and all consumer facing organizations should be clear on data tracked, for what purpose, and allow shoppers the right to opt out of anything they are not comfortable with.  Selling is a two way street and being as honest and straightforward is possible will have the best returns in the long run.  Shoppers who are willing to provide their data for improved service are not hard to find, and everyone appreciates an honest trading partner.

CaptureIndoor Positioning –  Apples latest offering enables indoor maps and wayfinding to be more easily implemented by shopping centres and department stores.  Apple has made iPhone motion sensors available to their API.  With that API update and a more powerful processor, indoor systems can access phone data to make navigating large venues simpler.

Retailers that leverage any tool possible to provide access to their products and services make themselves more readily available to shoppers.

iOS 8 looks to be a landmark release with lots of new features and functions.

Check out a longer list of deep dive functionality, and please share any retail oriented features discovered at release!

2014.17 | starbucks pre-ordering

660-Denver_Drive_ThruRecent news indicates that Starbucks will add order ahead capability to their mobile solution. I’m a daily user of the mobile payment app and even use Pebblebucks, but Starbucks may find mobile pre-ordering a more challenging system to implement.

Pre-ordering sounds great on paper and I think it can work in some environments but coffee represents some challenges.  Here are a few details that would need to be clarified:

  • What is fulfilment process? Order printer, kitchen display, other?
  • How are orders prioritized? If there is a line of customers in the store waiting, does the barista make the coffee for the absentees first?
  • When are ordered drinks made in relation to pickup time? Ice melts in cold drinks and hot drinks can cool quickly.  That’s a complicated equation for a barista with a long list of drinks to make from the till in the store.
  • How will queues be arranged in stores? Many stores are already short of real estate. Is there a separate queue or do they enter the same as everyone?
  • How do customers validate their order and take it away?
  • What happens if customers miss their pickup time?
  • How will customers and store staff be notified of the process change?  Will it require alterations to the store?  To current standardized processes that have been in place for years?

Starbucks are certainly working through the details but it will require a serious assessment of their current in store fulfilment processes. The questions above only scratch the surface.  Adding pre-ordering is a significant change to the system which will require the acceptance of new processes by both store staff and customers.

Panera Bread’s Founder and CEO Ron Shaich is embarking on just such a process and is doing the necessary legwork to change the business at the operational level. This is the right approach of Starbucks is committed to pre-orders. The right setup will require significant testing and adjustment.  Tacking a mobile ordering tool on the app is just the tip of the iceberg.  It’s the behind the scenes work that will have this system sink or swim.

From my perspective, there are too any places where pre-ordering can go wrong.

At a grocer I worked with, a kiosk was installed by the deli counter for ordering sliced cheese and meats. The concept was to enter your order and then complete your shopping through the rest of the market and return later with a ticket to pick up the order.  Instead of waiting in line, shoppers could shop while their order was assembled and pick up their deli order just prior to checkout.

What happened in reality is that shoppers saw a queue at the deli counter, walked over to the kiosk, entered an order, printed a ticket, and then walked to the deli counter and demanded their order from staff that were already slammed and getting order requests from two separate systems. This ended up displeasing staff, the kiosk users and shoppers who had waited in the ‘traditional’ line. Beyond these concerns, there was no obvious ROI from such a solution.  They didn’t buy more meat.

There was and is nothing wrong with the technology.  The technology is the easy part.  The system just didn’t fit the store without changing processes and customer expectations and making that plain to all parties.   Without complete commitment to a new paradigm by all parties, the result will be failure.

Imagine you walk into a Starbucks that is slammed with customers.  There is a long line and a 10 minute wait.  With this new system, how many people are going to see the queue, pull out their mobile and try to order with that to skip the queue? With the number of users Starbucks have for their mobile app, many people will certainly attempt this. If it works, it’s unfair to those in line. If it doesn’t, they may place a second order, putting strain on an already overloaded system.  Either way, it now adds thought to the process. Do I order ahead on the morning commute or just go in the store.

For any new system to flourish, there must be value to the retailer and to the customer. Whether there is value to both here remains to be seen. Customers may get their coffee faster, but if the process falters it could slow the whole store system. Will Starbucks sell more coffee? I’m not sure that pre-ordering will drive more sales.  Pre-ordering complicates the store system with what could be little upside to stores or customers.

photo-2-250x375If Starbucks wants to improve the process for stores and clients, they should consider ways of speeding transactions without making major changes to its fulfillment process which works fine as far as I have seen.  Ordering and order entry at Starbucks can range from the simple to the complex. Some customer get a Tall Pike Place.  Done.  Some customers ask for coffees with 6 adjectives and it takes baristas many keystrokes to enter.  Even simple orders require many keystrokes.  I order a very simple drink and always need to wait while the barista enters my order – though the staff at my store even have my order memorized.  It takes 10-15 touches to enter the order.  I’ve watched.

Consider an alternative to pre-ordering to kill the line.

  • If orders require many keystrokes and many users order the same thing again and again, why not automate the order entry?  Starbucks has more than 10 million users for their mobile app.  Users are trained to use the app to pay.
  • Why not build a drink builder that allows users to configure and save drinks within the app?
  • Use the Starbucks app to configure a drink as it used to do.
  • The app generates a unique id barcode that repesents that drink order.  The code is saved on the phone for repeated use.
  • Customer scans their mobile at the POS on currently installed scanner to order.
  • The barcode can be a string that the register recognizes as the full drink with all foams, soys, non-fats, whatever.
  • The point of sale system is populated with the drink details and the barista can confirm with the customer instead of tapping 15 times.
  • Avoiding entry would save precious seconds off of many transactions, and increase throughput.
  • Avoiding entry by barista could also enable consumers to order something different than their usual without having to figure out how to order it and go through the translation discussion with the barista.
  • Users could share their codes with friends and save them in their own apps so that we can order for them correctly.
  • Don’t these guys know my name?  With a bit of customization the customers name can show on the screen so we don’t see any more of those cups with the crazy names on them, speeding the pickup process.

Pre-ordering could work, and I am hopeful that Starbucks will find the magic formula to make it so, but I’m not yet convinced that this will make lines shorter.  It doesn’t look like a simple path, but kudos for trying something new!

Simple is good.  Even if something isn’t simple on the back end, it must appear that way to clients.

2014.15 | disney magicbands

Disney-MagicBandI’ve seen the future of payments and personalization and it is already in place at Disney World.  The MagicBand program is relatively new but represents what so many of us have wanted for so long – an end to wallets, cards.

In preparation for my recent vacation to Disney I was aware that the MagicBands were part of the deal with the resort vacation booked, but it wasn’t until our arrival that it became clear what a game changer these relatively simple devices really are.  I had used similar wristband technology at Great Wolf Lodge many times over the years, but this implementation was far more immersive and impressive as it would need to be, given the scope of Disney’s properties.

As the smartphone combines functions like telephone, address book, camera and more into a single very useful multi-purpose device, these bracelets provide a single device to simplify your vacation experience by providing a room key, payment device, and ticket and much more all in one device.

My family and I stayed at the Disney Yacht Club resort on a Club Level.  On arrival, we were met and led to the Club Level and the concierge provided us MagicBands and instructions.  The MagicBands were the colour of our choosing and had the names of each family member on the inside.  The concierge explained that the MagicBands would take us directly to the club level by scanning the bracelet in the elevator on a special pad.  They also acted as room keys.  Everyone in the family can use the bands to gain entry to our room.  The bands are also scanned for access to the pool area as that particular themed pool is for the use of resort guests only.

The bands are used for payment as well at all on-site food and shopping locations.  I had pre-set a PIN established for payment online prior to check-in – it could be the same for the whole family or unique by family member.  Those under 10 cannot purchase with their band – logical as they are most likely to lose them.  Pinpad like devices are used at payment counters.  For restaurant service, iPod touches with sleds are used to scan the bands and accept pin entry.

IMG_4983The bands also act as  your ticket to the resort and are programmed with your dates and ticket permissions.  First time entrants scan a fingerprint with their band that is checked on each subsequent entry.   They are also used to validate FastPass+ entries – your pre-booked access to popular rides.  Visitors pre-book their fastpasses online or on the Disney app, and scan their bands during the approved times for their rides and are provided access to the rides as booked.  The Disney staff also see the wearer’s name as my daughter found out when she was greeted by name on her first entry to Magic Kingdom.

My favourite part of the MagicBand was the connection to PhotoPass.  As part of our package, I purchased a Memory Maker package which gave you online access and download permissions to all of your photos taken by Disney photographers at the parks.  Instead of giving or scanning a photo card, the photographers scanned your MagicBand.  The real magic of this element is that photos on the rides are automatically added to your online account.    You get on the ride, you see your photo on the screens at the end, and then you can go online and see your photos and download them –  no waiting, no extra charge, no silly frame or print.  You get relatively high resolution image files of your ride that you can then use as you wish.

As someone who works in retail, I have a tremendous appreciation for how much work all of this represents.  Connecting all of these systems and making it appear flawlessly interconnected represents an incredible effort of connecting data, devices, and operational changes to make this happen, and it works very, very smoothly.

In order for solutions like this to work for transactions, they have to be very simple, and they have to work quickly.  The MagicBands fulfill this promise by working quickly by holding the wristband against a giant circle with a mickey logo and the entry of a PIN.

IMG_4980-002In order for solutions like this to be embraced, there must be a benefit to the retailer and to the shopper.  The MagicBands fulfill this requirement by providing convenience to the shopper who no longer needs to carry their wallet, worry about various room keys, cards, or barcodes, and just wears a very unobtrusive bracelet.  Disney surely gains throughput increases for rides by getting away from having to print and check FastPass tickets, and probably increases spending as shoppers are increasingly separated from the dollars and cents of their transactions by merely tapping a wristband instead of looking at the money they pull from their pocket to pay for souvenirs and snacks.  Disney has also effectively enabled full tracking of every purchase, and the entire path that visitors take through their entire stay, allowing them to further

Also, not missing a single opportunity to sell the Magic, Disney now sells all sorts of charms and covers for the bracelets as well.

I can only suggest a few small opportunities for improvement to this impressive system, though I’m certain these improvements are probably on a roadmap somewhere and are yet to be implemented and are not fundamental shifts:

  • wpid-13-Disney-0826-093428-172When paying at a restaurant, on scan of bracelet and entry of pin, there is no opportunity to enter a tip for your server. That functionality is standard on bluetooth pinpads in Canada at restaurants, so should be relatively easy to add.  Even if tip was already included in price due to the size of the party, the wait staff still brought a paper receipt to sign.  This resulted in being chased down by a server for a signature on at least one occasion.  Entering a PIN and signing felt superfluous and even confusing, as entering a PIN and scribbling a signature should amount to the same thing.
  • The connection to the web and mobile app was impressive.  Free wifi in the park made it easy for international roaming visitors to get good coverage to use the apps to book FastPass+ times.  The first time I used the PhotoPass service was on Space Mountain and I was uncertain of whether I had to identify my photo or not.  Staff at the ride indicated photos would automatically go to my account.  Skeptical, I stayed at the site, pulled up the website for PhotoPass on my mobile and was amazed to see the Space Mountain photos show on the the PhotoPass website within minutes of getting off the ride.   While I could see the photos on the website, zooming was awkward as the photopass site was not built for mobile.  It would be great if the mobile app had a section for photos as well, and even notification of photo additions.
  • Electronic receipts would be a great addition to the mobile app and website.  Getting a paper receipt over many days seems wasteful, but keeping a running tally of your resort bill would be helpful.

Retailers, Payments Processors, Credit Card Companies and any party interested in enabling next generation payments should definitely study this environment.  As Starbucks did with their mobile payment solution, Disney have looked at their own closed environment and leveraged current technologies and implemented them into their operation to suit their needs.  While it’s a closed environment, there are some really intriguing lessons I took from this experience.

  • Removing wallets, cards, and even mobile devices from the transaction made it incredibly easy to pay.   Holding up your wrist is dead simple, and people caught on quickly.  I would use a bracelet to pay everywhere if I could.
  • Using the wrist band to buy is like one click purchasing at Amazon.  Like the one click, it’s so easy to buy it’s dangerous to your bank balance.
  • PINs are important.  If Disney can read my wristband and connect my family’s band to mine on a ride, they did it from a distance.  If they can read it from a distance, bad guys probably can as well.   Disney can control their environment well.  That may be more difficult in the real world outside of Disney, but the risk is no more than with cards, really.
  • Wearables may be more useful that I initially thought.  Using something convenient on your person to pay like a ring or bracelet or watch could be customized to the user and play a very useful role while removing the wallet from your pocket.
  • It’s possible to provide an electronic ID used with a wristband.  Disney brought up our names and approval to enter parks and save money.  Scanning that bracelet can just as easily pop up your image and details for drivers license, age verification, etc. Requiring ID has always been a challenge to removing a wallet completely.
  • Keeping the technology out of the way made it so simple to use that the focus of users was completely on their experience and not paying or getting access.

Much like the Starbucks mobile solution, the Disney MagicBand is not a panacea.  While it’s not for every situation, it was a fascinating experience to see it work, and to consider how elements of the solution could be used outside of a closed environment.  I applaud Disney for taking the initiative of connecting the wristbands to so much functionality and hope to see the learnings drive similar solutions elsewhere!

2014.09 | worn on tv | beacon sunglasses | emoji search

As Seen on TV

Worn on TV – Showing that alternate channels and affiliate sales continue to expand as alternative sales opportunities for retailers, Worn on TV lists clothing and accessories that are showcased on television shows.   Visitors to the site can search by show, by episode and even by character.  It is not evident how the site is validating the clothing shown – whether it comes from the network, the service or is crowdsourced; but it’s a novel idea, and you have to expect that they are capturing some revenue by sending traffic to the retailer’s eCommerce sites.

From a retailer perspective, a site like this represents a tremendous opportunity to sell fashions in an understated manner without relying on commercials that are being avoided via DVR by most people anyway.  Retailers would be wise to track how many hits they are getting from the sites, and even by show to understand where their clients are coming from so that they can best showcase their fashions on the shows driving the traffic.  Making this data actionable, sales staff enabled with tablets and access to this site could potentially drive more product by understanding clients taste and leveraging the publicity from the show as shopper profiles are connected.

tzukuriBeacon Sunglasses – While those of us in retail technology are focused on using beacons for unique retail experiences, Tzukuri are putting iBeacons directly into their sunglasses.  Much like many card based bluetooth tools that will tell you when you leave your wallet behind by sending an alert to your mobile, these specs will send a notification from a built-in solar powered beacon to your iPhone via iBeacon when you get more than 16 feet from them.  An app can then later tell you where your iPhone was last in contact with them so you can return and pick them up.

Leveraging beacons in sunglasses is a novel and practical idea; who hasn’t left sunglasses behind at some point.  Stepping beyond the ability to locate lost frames, with beacons built into the glasses and central profiles kept on clients, retailers could now even leverage the beacons on the sunglasses to identify shoppers who come into their store – even if they don’t have their mobile device. To take advantage of these sales and customer service opportunities, retailers will need to be nimble in building out the data fields required in upcoming versions of their client profiles and consider how to interface all of these identifiers to staff working at stores.

yelp emoji searchEmoji Search – Yelp recently updated their mobile app to allow searches by emoji. Instead of having to search for wine, for example, by typing the word wine, users of yelp can now type one character – the wine glass via the emoji keyboard on an iphone – to search on wine.  While searching via emoji seems a silly idea on the surface, it represents an understanding of a certain subset of users that use their app.  Emoji entry avoids the annoyance of typing on touchscreens or waiting for Siri to look.  It’s a fresh, simple idea, and drives users to approach the app with a different perspective.  It’s also another way of providing shoppers choice – a key function in today’s endless sea of options.

 

2014.07 | TRNK | touchscreen table

IMG_3794

TRNK – Many of today’s successful retailers are really creative curators.  TRNK represents a terrific example of the focus on curation in retail. In fact, visitors to the site may be unclear on whether they are visiting an online magazine, an online retailer, or a blog.  The site portrays a particular style. If readers enjoy that style, they can bring that style into their own lives through buying products showcased.  There are links to all sorts of home decoration elements and furniture – with all of the links pointing to a variety of retailers and even eBay for vintage items.

Sites like TRNK provide an interesting opportunity for retailers.  Specialty retailers work incredibly hard to build their brands with their own sense of style to suit a certain segment, and may consider these sites a potential dilution of their brand.  That said, the emergence of the online world has enabled an incredible number of different communities driven by different interests, and it is becoming increasingly challenging to market to all of them one by one.  Embracing these lifestyle sites / marketplaces and their respective followers can provide retailers a resource to outsource the challenge of marketing to these increasingly diverse communities.

Specialty retailers would find it beneficial to enable these sites to showcase their products paired with those of other complimentary products.  Shoe retailers find themselves challenged with pairing their shoes with entire outfits – a disadvantage from fashion retailers that are increasingly offering shoes for sale as well.  As well as using their own resources to suggest the right ensemble for shoes, these retailers could point to these lifestyle sites so that their clients can see for themselves how the shoes will look paired with the outfits.  Cultivating a network of these sorts of lifestyle sites as partners is basically a retailer version of the Amazon Associates program where participants can advertise products with a link to Amazon and get a cut of the sale.  Why shouldn’t specialty retailers enable the same sort of programs – with more style – and expand their reach?

CapturePizza Hut Touchscreen Table – A concept video for a touchscreen table a la Microsoft Surface (Now PixelSense) was released by a Pizza Hut a couple of weeks ago.  It has the requisite upbeat tunes, beautiful graphics and uncluttered and simple interfaces complete with paying with your phone just by having it on the table. It’s a great idea and really the extension of tablet ordering solutions like those employed at places like Buffalo Wild Wings.  Of course, in real life the challenges are a little more complicated.  From a logistical perspective:

  • Tables are never completely clear of items in a restaurant as shown in the video (napkins, condiments, cutlery),
  • This thing will get quite greasy at a Pizza place (looked at your tablet in the bright light of day recently? Add pizza and kids),
  • Can you imagine fighting with your kids over who has control of this thing at any particular time and do we want to watch them play more games?, 
  • iPhones don’t have NFC, which would be the requirement for the payment element element to work as shown,
  • How much more costly is this table than a regular table?  what is the added value to the customer and to the company?,
  • Is the system connected to the in-store inventory?  How happy are clients when they finally configure their pizza and they are out of onions or whole wheat dough?
  • How much work is it to change this when the menu changes?
  • Isn’t it faster just to tell them what you want?
  • How will people who can’t figure out how Netflix works make this work?

I love the concept.  I would use it, but then, I’m a Netflix guru. It’s much easier to poke holes than it is to make these thing work, and I applaud the vision.  My main concern is around flash over substance.  Over half of the people in North America walk around with a computer in their pocket. Should we put another huge one into every table? I’m for it, but I’m not paying!

2014.06 | internet of things for retail

doorbotCheaper computing power and the ubiquity of technology are making home technology previously considered mundane surprisingly fresh.  Consider the following and how they can make life easier for consumers and open a door for retailers to adapt and use them for selling tools.

Smart Doorbell – Everyone has had to make the drive to the sketchy warehouse to pick up the package they missed after 3 missed drop-offs.  Doorbot is a doorbell that rings your mobile device when the doorbell button is pushed.  The mobile device uses the camera to show a live video feed of the bell ringer at your home.  Used  in coordination with a compatible wifi enabled door lock, users can actually allow entry to the delivery man in to drop off a package inside the home.  Useful for both avoiding that trip and finding a 3 x 4 foot box carefully hidden under your doormat.

volvo-roam-delivery

Auto Delivery – Volvo is testing a program in Europe to help with the missed delivery problem as well.  While you sit in your office, your vehicle lies unused in a parking lot.  With the roam delivery service, the shipping location is the location for your Volvo vehicle during certain hours.  On request, a single use digital key is provided to the delivery service by Volvo.  The delivery service visits the vehicle, uses the one time code to unlock the door and place the item in the car. After delivery the car is relocked, and the code is disabled.

automatic-iftttCar WalletAutomatic provides an adapter that interfaces into a car’s service port (almost any car back to 1996!) and connects to a smartphone app via bluetooth.  That connection to the vehicle allows users to leverage automotive data to improve gas mileage, obtain details on trouble lights, and even find a car in a parking lot.  A recent update to the platform leverages Apples new Bluetooth 4.0 location based platform.  With your vehicle part of that ecosystem, and with partners that develop on it, it’s possible to leverage a car with the automatic platform as a wallet.  Your car could be identified and you could pay for car washes, parking or other car oriented transactions.  Add in the recent availability of the Automatic channel on IFTTT, and vehicles are becoming a great deal more than transportation. 

Acloudwashppliance Ordering – I mentioned in an earlier post that it’s now theoretically possible to have our washing machines order detergent for us.   A designer in the UK has developed the Cloudwash – a washing machine that can order detergent through a smartphone, or even directly from Amazon.  Anticipate some single technological clearinghouse for all of our appliance ordering to rule the day.  If we don’t have some central tool to keep track of what all these things are doing, there will be a tremendous surplus of laundry detergent and dishwasher detergent on hand in most households – and that’s without the refrigerator getting into the game. 

These are only a very few examples of the Internet of Things that are coming into play.  It’s still early days for these sorts of technologies, but it is important for retailers to be aware of all of these ideas. There may be a jewel that particularly suits your retail segment, customer base or some other element that could push your business over the top, and it would be a shame to miss a unique differentiator.

 

 

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