2011.31 | Shopping from your Car

The rebirth of the American auto business is thanks in part to the efforts of the car companies to integrate two great consumer loves – automobiles and mobile phones. It started out with Bluetooth integration to allow hands free calling, but given the increasing power of smartphones and their usability, auto makers are taking it up a level to provide remote control capability, audio integration and more.

I saw a wonderful demonstration of the potential of these solutions in the demonstration centre at my own place of business some time ago. At the time it seemed a bit fanciful to me, but over time, I’m starting to see the real potential of the idea.

At present the integration of mobile phones and automobiles is mostly linked to telephone calls and audio integration.  Some solutions are going a bit further as mentioned above, but there aren’t any shopping solutions that I have seen yet.

If we take that technology a few steps further you can imagine the incredible change that is coming our way.

Consider a drive home from work a few years hence:

You get in the car, and begin to drive home.  Your phone rings and it is your spouse.  They indicate that you are short on milk and bread, and that you had promised to pick up a jar of olives that day.  This sort of conversation is routine on a car ride home in today’s world.

The part that will change is that after you hang up the phone, you will then be able to ask your mobile via audio command to check the stores on your route home for three items: bread, milk, and olives.  Your mobile device can take the command given and can identify the stores in order of preference, price, or location.  You can speak the name of the store you would like to buy from, and the purchase will be made instantaneously over the phone.  You stop at the store and pick up the items purchased at a special counter – or even better – you pull up and someone puts them in the trunk of your car.  The receipt is already in your receipts folder in your email.

While it sounds like a bit of a dream, all of the solution components exist to do this today:

Smartphone with Automobile Integration–  The power of any of the smartphone mobile devices available today is well within the realm of reality required for completing these sorts of solutions.  Many new cars have bluetooth integration and that technology should expand and improve.

Audio Input to MobileGoogle has been doing this for some time.  It is getting more accurate, as well.  I use Dragon Dictation and have tested it in loud environments and it works well.  Apple is also rumoured to be building this into next iOS – expect others to do so.  Expect people to abuse it in public to everyone’s embarrassment, as well.

GPS Search along route – It is already possible to identify locations along a route using Google Maps.  While stores need to be identified in some way, sites tags could be used.

Inventory Search – There are already UK based services to price compare specific grocery lists.  While more rare in Canada for grocery, there are some that provide inventory searches in general merchandise already – Chapters Indigo and The Source already provide it.  If there is an API to get the information, it could be brought together for this solution.

Online Purchase – There are many services to purchase online already like Paypal, or a retailer can leverage an existing web store.

Paying without Entering a Credit Card – The purchase could be completed via a one click purchase by keeping a credit card number on file as  is already done by iTunes and Amazon.  The solution would have to be adjusted to a verbal equivalent, but this could be done using a solution like Amazon’s PayPhrase.

While this sort of solution would not be without its complexities, it is certainly within the adjacent possible.  Like the Tesco Korean Subway grocery shopping solution, or like the Starbucks Mobile Payment solution, it is a matter of assembling a number of components that already exist today and cleverly packaging them.   Being the first one to a solution like this could provide a terrific competitive advantage.

The greater challenge for retailers is integrating a monster like this into their operations infrastructure.  To make something like this really take off, execution would need to be flawless.  If the inventory is missing, or the store staff don’t provide a pickup, or the payment process isn’t simple, customers will not use the solution and it will be a wasted idea.

While this is a challenging area – it seems like a true possibility.  Retailers are already struggling with the many channels for sales – web, mobile, store, self service kiosk and more, it will only get more complex over time as these channels snowflake into various subsections – like mobile ordering via an automobile.

Beyond the complexities of all of the items above, there are two things for retailers to consider before being able to leverage a solution like this:

1.  A service oriented architecture of some sort needs to be in place to deal with ongoing requests for new channels. If every solution is custom, this will never happen.

2.  In order to accommodate customers via all of these channels and to understand what channels customers are using and what they want, it will be come increasingly important to implement a back end solution that allows retailers a view of customers across all of these channels as well as a vehicle to interface with them across all of them in the simplest most transparent way possible.  Without this infrastructure, the business will become increasingly fragmented and impossible to operate efficiently.

A solution like this would have been mere fantasy even 3 or 4 years ago.  It is exciting to see the possibilities for consumer convenience, and the potential for retailer differentiation.  Hopefully we will see implementations of this type in the near future.

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2011.21 | Google Wallet Could Work

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?

2011.04 | NFC Mobile Payments

Image Source - Cult of Mac

The previous blog post on Starbucks 2D Barcode Mobile Payments drew questions from readers and colleagues around Near Field Communication (NFC) payments, specifically, why would Starbucks have implemented a 2d Mobile Payment solution when NFC is just around the corner?

The Starbucks solution with 2D payments is a perfect fit for the unique Starbucks situation and does not preclude them from accepting mobile NFC payments.  However, the 2d barcode payment is not one I would recommend for any other retailer unless they were have the same characteristics as Starbucks and their solution outlined in the previous post, and there are few if any retailers or consumer facing organizations in that position.

In order to provide NFC mobile payments, it is necessary to have the following elements: NFC at Point of Service, NFC enabled mobile devices, and most difficult of all, Credit Card Company and Credit Processor cooperation.

Point of Service Interface – Retailers that wish to accept mobile NFC payments require NFC enabled pinpads that already work with NFC credit cards.  The most common units in place so far in Canada are the Verifone vx810 and Ingenico i3070c.  These pinpads would provide the interface in stores for NFC ready mobile devices, and are, in fact, already widely installed by many tier 1 Canadian retailers as part of recent EMV efforts.

NFC Mobile Devices – According to rumour, both RIM (Dakota) and Apple (iPhone 5, iPad 2) have NFC ready devices coming out in 2011.  If that is the case, then we may indeed finally be looking at the long awaited electronic wallet, as we now have an encrypted and relatively secure electronic interface from mobile device to point of service device.   Apple and RIM’s massive base and marketing power, as well as their ongoing competition, certainly has the potential to drive massive traffic.  So the mobile devices might be coming, but this has been the expected for at least 4 years.  We’ll call mobile NFC devices a strong maybe.

Credit Card Company / Processor Cooperation – My thoughts on contactless payments are well documented on the blog under NFC if you want to pick it from the tag cloud. The problem isn’t the technology, it’s how the payments get processed and who gets paid to do it. See my posts here and here, as well as a recent article published on StoreFront Backtalk.  The credit card companies, and the various payment processors already get their slice of the payments pie, while all of the mobile carriers have been trying to figure a way to get theirs for years now. Both Canada (Enstream) and US (Isis) mobile carriers have established collective organizations to deliver on mobile payments.  It isn’t that all of these organizations don’t want mobile payments, it’s just very difficult to sort out, and there is really no extra potential revenue in it for them unless consumers or retailers will pay more for some reason.  Some may point to startups like Square and Twitpay, and they may take a bite out of mobile payment in the future, but it doesn’t look like it will happen in the immediate future.  Getting these organizations on board, extending a very successful and secure closed network to the uncertain security of millions of devices is a long short in the near future.

NFC mobile wallets can and should happen (you can already stick an NFC tag on your phone if you like), but sorting out who gets paid how, and how funds will stream through a secure system will take some time.  Nobody knows when that will be.

Why did Starbucks implement a 2d Barcode Payment System instead of NFC?  Only they can answer that, and much of it may be marketing, but in the end, they can drive an ROI.  With a 2D system implemented TODAY, Starbucks potentially gets more consumer card usage, drive more ‘deposits’ on their stored value card, and a quick tender.  Consumers get the convenience of paying with their phone, and the kind of bleeding edge fun many Starbucks customers enjoy.

Starbucks avoids the complex mess of processors, EMV, PCI, and dealing with the processors and credit card companies altogether by taking no the risk themselves.  They have made a good gamble on the fact that they can attract early adopters with relatively very little investment, and by the time mobile payments are mainstream, their system will have already provided a good ROI.

2010.48 | Retail Technology Themes in 2010

As we are approaching the end of 2010, I have noted a number of common themes in retail technology.  While many of the progressions are not mainstream at this point, these are certainly areas that were discussed often and are maturing.

Social Media –  Impossible to ignore, but rather touchy feely in the results department, you can’t escape social media.  Now it’s a part of everything and you can’t escape it.  While it’s been maturing for many years, it really feels as though 2010 was the year that social media went mainstream and became fully commercial, with users being able to ‘like’ things.   The most common question from my customers is around how retailers are using and obtaining results with Social Media.  My best suggestion is to watch what other retailers are doing.    Expect social media to take matters into its own hands in the monetizing department moving forward.  Facebook credits, Facebook based stores, Facebook gift carding, and a strengthening Facebook eCommerce platform means more transactions are likely to take place.  None of this is really new, it’s just gaining traction.

iPad – The iPad is the Social Media of the device market.  We can’t get away from it either.  While still an potentially expensive an unproven long term tool, it has been embraced by retail at the consumer level and as a tool at the store.  Combining social media and iPads is even an option some retailers are using.  Naked Pizza is using Chimpadeedoo as a novel way to gather email addresses for email lists and special offers.  One example of many.

Mobile Scanning – This goes both ways.  There has been increased scanning of codes from mobile phones in 2010 for payments and offers.  With better cameras, more powerful smartphones and better software, consumers are doing their own mobile scanning as well.  Price comparison apps are the primary application, but gaming type apps that bring real life and the internet together have gained popularity as well.  A recent addition called Fooducate uses the technology to allow users to educate themselves on the nutritional value of their potential purposes.

Location Based Apps – The GPS enabled functionality of smartphones makes them a great fit for shopping based on where you are.  Localized searches are a boon to shoppers.  I can’t remember how I lived without that.  One great example – check out Zagat’s Food Trucks site to see if your favourite street meat vendor is nearby.  It’s only NYC for now, but you can see how this could catch on in urban areas.  Augmented reality really started with Yelp’s Monocle in August 2009, has also taken steps forward  in 2010 with more iPhones able to use it and an increasing arsenal of apps.  The GPS capability is only getting better, the technology purveyors claim, saying that we can now search within stores.

Mobile Payments – While we’re still not at mobile wallet nirvana, vendors can accept payments on iPhones, and now Blackberries.  [Except for Canadians and Europeans – anyone see an EMV version yet?] Given so many payment schemes, the electronic wallet is looking more and more possible.  Visa in Europe is even launching a service that will examine mobile location against credit card purchase location to minimize fraud and reduct false postive potential calls to users.

2009.15 | Customization | Mobile IP | HD Downloads

Customization – In a time when getting consumer attention is more competitive than ever, what better way to get their attention than by customizing standard offers to meet their specific needs or interests.

Nike has provided the option for custom shoes for some time as an example, but consider how interactive discussions can be taken to the next level with customers with solutions like customized magazines, endless recommendation engines, and customizing product catalogs so that customers see them in ways that suit their needs. This realm is getting increasingly sophisticated, and, if done well, promises some real returns to consumers and retailers alike.

Mobile IP Telephony – Some interesting news this week from the mobile world. Consider the release (US) of the iPhone version of Skype mobile (with Blackberry to follow in May) – which allows access to your VOIP account via wifi. iPhone is only one small portion of the market, and you can already do the same with fring on windows mobile and iphone and with various other solutions and handsets.

The interesting point of this release is that this comes directly from the VOIP provider, hopefully moving mobile VOIP one step closer to the mainstream from the hardcore geeks who use it today. AT&T and the other wireless carriers are wary of allowing solutions like this on the phones as it will negatively impact their wireless revenues in the long run, so its existence in any form is a coup for consumers.

HD Downloads – Apple announced this week the ability to complete HD digital downloads to iTunes. While it’s possible to download movies of all sorts online, the big challenge is doing it legally and moving the media the last few feet to the big screen TV in the home. Apple is the first to offer a relatively simple solution to get that video to your TV. You can use Apple TV to get it directly to your TV in this instance, which is technically feasible for many consumers.

Another option without using Apple TV is to buy a $50 cable to connect your ipod to your TV after syncing your movie rental. For the more initiated, using Boxee on Apple TV hardware is also possible, but HD is less available so far, and don’t forget the bandwidth required to download an HD movie. Movies which are already over 1Gb in SD, will be 3Gb in HD. With a limit on downloads, there may be extra costs from your internet provider, and it will take some time to download these beasts, and some space to store them if you purchase.

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