2012.41 | New Ways of Retailing with Tech

googleshoppingGoogle Shopping –  It seems almost everyone is expanding their retail presence, making it possible to buy anything, anywhere, and anytime.  In addition to Google Play –  Google’s online store for android apps, ebooks, movies and music, consumers can also visit Google Shopping – a shopping portal apparently on the rise.

Consumers have another shopping channel and retailers have another confusing choice to make around partnering with Goliaths like Google.  Do retailers rely on Google to point clients to them for free, pay with adwords, or leverage a sponsorship with Google Shopping?  Do they post an enhanced catalog on Google Catalogs?  Increasingly retailers lean towards curation of goods and services to provide differentiation.  Does Google take away some of that differentiation with top 10 lists and 360 degree views?  Perhaps, but it could potentially drive more traffic in the near term.

PepsPassbook Promo – While still underwhelming and in need of expansion, Apple’s Passbook is probably the best mobile offer/ticket/giftcard platform out there by potential user count and likelihood of uptake by consumers.  Consmr recently offered a reasonable bribe to new users.  Download Consmr, and receive a Passbook ‘coupon’ for a free Pepsi Max redeemable at Kum & Go stores.

This is the first notable campaign to use Passbook to meet my notice.  Getting that large base of users to try a coupon via Passbook can only help expand the footprint.  There will certainly be lessons to learn, as this is not nearly as simple as it appears from the perspective of those offering the free Pepsi Max

Hopefully this Passbook offer only provides a one time only coupon code that is a unique code.  If it doesn’t, all the user has to do is take a screen capture of the coupon (It’s as simple as pressing the power button and then home button and then waitning for the flash on iOS.  Swipe your hand across the screen on newer Samsung Android for the same result.) and then use it again…and again…and again.  Just because coupons are electronic doesn’t make them less subject to fraud.  In fact, a user could send out that coupon to all of their friends in seconds – negating the intent of the offer as only one person had to download the Consmr app to get the coupon.  Beyond a unique coupon code for each user, retailers can also tie coupons to unique identifiers as part of a loyalty program to ensure redemption matches the expectations of those making the offer.  Retailers and marketers have to be sure the target audience AND the technology are all considered or losses and campaign failures can result.


Square GiftcardsSquare is now offering electronic gifts as part of their service.  Square Wallet Users can give and receive credits for businesses that use their payment systems.  This is an intelligent and logical progression of the payments system and provides another potential expansion point as everyone’s mom joins Square to try to give their grown techie offspring a free coffee or book.

The article says they are waiting on Square giftcards for Canada.  Seeing as we don’t have Square Wallet here today and won’t until 2013, that seems a valid point.

2012.12 | The End of Money?

Having finished The End of Money last week, I can recommend it as a useful overview of all of the issues concerning a move to a cashless (or cash “less”) society.   I was particularly taken with the concept that all of us perceive and hold true the “value” of paper money, though effectively it is our faith in monetary instruments like cash that gives us that perception of value and nothing more.

We are so close to our money and monetary system, that we rarely stop to think about it.  The book underscored that point for me more than any other.  Money and gold are really just proxies of value that we perceive as instruments that can ‘hold’ value for us over time and make value transferable.  Taking the time to think about it, it’s quite incredible that we have somehow all agreed to this arrangement as a society; but we have.

I was also deeply affected by reading ‘Digital wallet’ will transform smartphone and how we spend in the Globe and Mail last week.  While the article revealed nothing new and was sketchy on details, the vitriole in the 335 comments was somewhat disconcerting.  Many of the comments from unsurprisingly anonymous accounts expressed outright hostility towards the idea.

While I have been enthusiastically anticipating and already using digital alternatives to cash, there are many individuals who are vehemently against a digital wallet.  As described in “The End of Money”, there are massive and pervasive concerns around this technology in the general public.

Some concerns outlined in the 335 Globe and Mail comments included:

  • being forced to use a particular payment network
  • transactions being tracked by banks, government, network owners and others
  • no privacy for transactions
  • account numbers and value being stolen
  • being forced to have and use a mobile device
  • being forced to use a mobile network like Rogers, Bell or Telus and paying them a cut of transactions
  • providing no additional value to citizens
  • ‘hackers’ taking over the system (by the way, the terms hackers and cyber anything have to be removed from the common lexicon – this is not the age of the information superhighway)
  • criminals stealing account information just from proximity the owner (NFC)
  • what to do when there is no electricity or your mobile device has no power
  • corporate organizations usurping or becoming a crucial transport to the sovereign responsibility of government for currency
There are many rational arguments in this list.  Almost all of them are issues today based on debit and credit payments.  Replace mobile device with card or mobile carrier with bank or processor, and the concerns are almost identical, be it a mobile wallet or a debit or credit card.
And yet, as I also found in The Future of Money, cash is not a panacea.  While cash can potentially provide anonymous, electricity free portability and ease of transaction in a way that no current widely used electronic format can, there are many issues around the complexity of cash – though they are more apparent to retailers to consumers.
In Canada we have had numerous reminders of the complexity of cash, but most consumers don’t think about them as complexities.
  • On March 26, a new $50 note was released to reduce counterfeiting of large denominations and increase acceptance of these notes.
  • Last week it was announced that pennies will be no longer be minted, and will be removed from circulation in Canada to save the cost of producing them – which has exceeded their value for some time.
  • The Royal Canadian Mint is in the midst of releasing new versions of the $1 and $2 coin (okay, loonies and toonies) which replace nickel composition with steel – once again, to reduce the cost of minting.

For most, these are news items for discussion with friends and colleagues.   For retailers and other consumer facing organizations, these are logistical issues that have to be carefully considered and dealt with.  Vending machines, self-checkouts, self service kiosks, cash drawers, cash counting equipment, counterfeiting measures, store associate training, taxes on purchases, rounding to five cents on cash purchases, end of day balancing procedures, and more all have to be considered.  All of them require time, effort, and more cost.

While the average consumer may consider these issues irrelevant to them, these are costs that are passed on to them one way or another.  If a retailer can find a way to deal with transacting more cheaply in a way that suits a target market, they should do so, tradition or no, and use that competitive advantage to win business.

So, what is the answer?  The answer is choice.

The issue I had with the comments on the Globe and Mail article was that people were basically responding as though they are being told cash is being eliminated and they have to use an electronic wallet.  That is not the case.  There will be cash, there will be debit and there will be credit for the foreseeable future.  There will also be electronic wallets.  These digital modes of transaction are currently options; not requirements.

There are all sorts of people and transactions in the world, and they should all be able to transact in the manner that they wish.  Cash, Debit, Credit and eWallets can all play a role.  [Don’t believe the eWallet hype? – check out mPesa.]

Electronic wallets are imperfect for many reasons.  It’s absolutely true.  So are debit and credit cards.   There is fraud, there is theft, there are many inconveniences associated with using cards.  And yet 65-70% and more of many Canadian retailers’ transactions are made via debit and credit.

Somewhere, somehow, somebody is going to evaluate the list of bullets in this post and see opportunity; see a missed chance to do things better.  With emerging technologies, and changing consumer attitudes to mobile and electronic transactions, it’s only a matter of time until mobile digital wallet options become a bigger proportion of the payments people make.

As retail technology professionals, we should ensure that all of the infrastructure we put into place provides the flexibility to accommodate future payment modalities – whatever they may be.  Reading “The End of Money” provides a great background on why we should be ready for these new payment models.  Understanding the history helps to drive us into the future.

From my perspective, the Government of Canada is responsible for the money supply including the Bank of Canada and the Royal Canadian Mint.   They should be considering how Canada can move from a cash based society to a cashless society.  They should remember that they are not printers or minters – they represent monetary value in Canada and should continue to play that role electronically if it suits their constinuents.   They have already made a jump moving to polymer from paper.  Perhaps their next move should be silicon.

All of the national banks around the world should be considering this or find a way to harness private enterprises in this effort – before AppleSquareGooglePaypalStarbucksBumpPayGeodeWallet or others do it for them.

Update:  The Royal Canadian Mint has obviously been thinking the same way.

2012.01 | Mobile Coupons in 2011

It’s that time of year again.  January is the last month of the fiscal year for many retailers, and time for the NRF Big Show in NYC.  I’m attending this year, so if you happen to be at the show, come and say hello at the NCR booth (#415) !

Mobile Coupons Keep Coming – I read with interest a recent article indicating that Proctor & Gamble has partnered with mobeam on a solution to provide scanner readable mobile coupons to consumer mobile devices without the need to upgrade scanners already installed at stores.  My rudimentary understanding of the solution is that their technology allows mobile devices to communicate with store scanners by fooling them into thinking they are reading a regular barcode.

While Starbucks went the route of upgrading all of their scanners to models with imagers to accept mobile payments, that can be much more costly and challenging for a grocer with thousands and thousands of lanes, including many lanes in each store.  Having a solution that can read coupons without hardware upgrades makes the acceptance of mobile coupons a far simpler exercise.

I will be very interested to observe consumer acceptance of this idea.  One hurdle I’ve noticed on mobile tickets and payments is the awkward dance we all have when we get to a POS and want to use our mobile.  Neither the customer nor the cashier seems 100% certain of how the process should flow.  Do you hand the cashier the phone, do they point the scanner at the mobile?  Starbucks is still a bit awkward depending on the cashier.  Savvy cashiers place the scanner by the POS perpendicular to the cashier and customer so that customers can hold our own mobile device in front of it.

If a retailer has a handheld or single window vertical scanner, the process can be worked out as outlined above.  If they have a bioptic scanner or scanner-scale, things get very awkward as a customer either has to hand over their mobile or reach across various checkstand elements at the lane to expose the screen of their mobile.  In both cases, there is currently no indication to the customer when they should present their mobile device.   There should be a green light that indicates and is activated when it’s time to scan.  Not a blue light that’s on all the time.  I’ve placed my mobile in front of the scanner too soon from time to time.  These situations are certainly sub optimal.  Expect changes in checkstand and physical scanner design to accommodate mobile device to POS interface requirements.  The current checkstands are not designed for these transactions, and the process needs to be simplified so that my mom can do it if it is going to get to the mainstream.

The other issue with mobile coupons is dealing with multiple items.  If a customer is presenting one coupon, reading a barcode is no problem.  If a customer wants to present multiple coupons at one time, things becomes more complex.   Nobody wants to scan or hold up their mobile devices for multiple scans – especially if the customer has to search through to bring up different codes on their screen.  This will complicate the process and slow throughput at the front end of any business.  To simplify this process, it would be better to have a list of discounts on the screen and only one scan to the POS applies the coupons.  In my opinion, the best option is to allow for selection of offers and coupons online via mobile or web, and then scan a mobile device at the POS to identify the customer via a membership id number.  When that virtual loyalty card is scanned, discounts are applied automatically depending on purchases.

I see solutions like mobeam and the Starbucks mobile payment solutions as evolutionary and necessary solutions to move the POS forward.   These solutions allow early adopters to prove out the business case for using mobile devices at the POS and to establish the comfort level of the greater population with using mobile interfaced POS solutions.  Both of these solutions represent key stepping stones towards the ever elusive mobile wallet.

2011.37 | Using BMO Mobile Paypass

I obtained my own BMO Mastercard Mobile Paypass a week or so ago.  While it’s not the mobile wallet we have been looking for, it’s definitely a stepping stone down the right path, so I’m pleased to be an early adopter of this solution.  That and the $50 credit on my Mastercard offered by BMO for the first 1000 users made it a great option for me.

Working in retail technology as I do, and traveling as I do, I’ve had opportunity to use it a number of times.    Here is my experience so far:

1.  Activation – Getting the card activated was simple.  Card arrived in the mail, called 1-800 and I was ready to use it.  Friendly customer service rep from BMO enabled an email receipt to be sent to me on each usage.  That seemed a good practice if I happened to lose it.  If I lose it or someone takes it, I’ll be sure to know quickly as I’m rarely far from my email – though if I lose the phone, that might not be the case.

2. Physical Card – The card is just like any other small plastic loyalty card you have is attached to a keyring.  It is the same thickness as well.  Quite small.  It has an adhesive strip on the back, and attached easily to my phone, and would probably attach easily to anything.  On first placing it on my iPhone, my case wouldn’t go over it, but after re-aligning it from  landscape to a portrait on the back of the device, my iPhone case fits as before – albeit a bit snugly.  I prefer to have the card behind my opaque iPhone case so my credit card is less obvious to anyone nearby.

3. Usage – Using the Paypass is identical to using a standard Mastercard Paypass Card. Once a cashier has asked for payment and Mastercard has been requested, one waits for the NFC terminal to ask for input, and the mobile paypass is touched to the NCR reader (pinpad).  I’ve noticed that some NFC terminals work with no problem while others may require a touch in a particular location on the device.  The card being smaller may influence that – though I think the antenna in the card is the same, it may be tougher to place with the right proximity on the terminal.  I was able to easily successfully scan the card inside the case of my iPhone when I was successful, just as I can often get the normal card to work while still in my wallet.  Needless to say, the card works on its own and requires nothing from the phone.  The mobile device doesn’t have to be on or anything like that. 

4. Acceptance -There are quite a number of retailers in Canada that have contactless card readers.  I used my card in a number of places this week.  Here is my personal experience at different retailers:

Sobeys – Mississauga, ON – Mobile Paypass scanned, but NFC terminal at POS did not accept.   Terminal asked for Swipe or Dip.  I used my regular Mastercard with the Chip to finish transaction.  NFC terminal was an Ingenico i3070 unit.

Tim Horton’s – Mississauga, ON – Mobile Paypass scanned and NFC terminal at POS accepted.  Received email receipt. Note that email receipt does not have list if individual items purchased, but a grand total only.  NFC terminal was a Vivotech standalone unit.

Cineplex – Mississauga, ON – Mobile Paypass scanned by NFC terminal but payment did not process.  Terminal asked for Swipe or Dip.  I used my regular Mastercard with the Chip to finish transaction.  NFC terminal was a standalone Vivotech unit.

Second Cup – St Bruno, QC – Mobile Paypass scanned by NFC terminal, but payment did not process. I used my regular Mastercard with the Chip to finish transaction.

Tim Horton’s – North Montreal, QC – Mobile Paypass scanned and NFC terminal at POS accepted. Received email receipt.  NFC terminal was standalone Vivotech unit.

Jean Coutu – North Montreal, QC – Mobile Paypass scanned by NFC terminal, but payment did not process.  I used my regular Mastercard with Chip to finish transaction.  NFC terminal was Verifone VX810

McDonalds – Mississauga, ON – Mobile Paypass scanned and NFC terminal at POS accepted.  Received email receipt.   NFC terminal was a Verfione VX810

Loblaw – Mississauga, ON – Mobile Paypass scanned and NFC terminal at Self-checkout accepted.  Received email receipt.   NFC terminal was a Standalone Vivotech Unit.

Harvey’s – Toronto, ON – Mobile Paypass scanned and NFC terminal at POS accepted.  Received email receipt.   NFC terminal was a Verifone VX810.

Urban Fare – Vancouver, BC – Mobile Paypass scanned and NFC terminal at POS accepted.  Received email receipt.   NFC terminal was a Verifone VX810.

When I have attempted to scan at terminals for purchases for over $50, the unit does not process payment, which seems correct, as the Mobile Paypass is for purchases over $50.

5. Reaction – Apparently one way to pull a cashier out of that hypnotic trance one gets into in the middle of shift is to whip our your phone and tap it on the NFC reader.  I had a bit of a startled response from every cashier that wasn’t overwhelmed with a long line.  A few of them asked me how I did it, and we had a quick exchange.

In total, I have a mixed opinion of the Mobile Paypass.

When it works, it’s a tremendously handy addition for small payments.  When I’m buying coffee for a few people I don’t have to fumble for my wallet, as I almost always have my iPhone at the ready.  It is a bit disappointing that the system response is mixed, but that is not surprising given it is the first attempt at something like this.  There are always kinks to be worked out.

Being in the industry I appreciate that there are quite a number of system issues at play here.  There are impacts around the NFC readers, the card types accepted by retailers and processors, and more.

Ideally BMO will work with the retailers to ensure that these Mobile Paypasses can be widely and easily accepted.  I for one appreciate the fact that BMO and all of these retailers are making the effort to provide a stepping stone to the mobile wallet, and I look forward to enhancements to the system.

Have any of you used a Mobile Paypass at retailers?  Let us know your experience in the comments.  I plan on using it in continued travels through Canada in the coming weeks, and will update this post.

2011.24 | Dollars to Donuts

New Canadian Notes – The Bank of Canada has publicized the design of the newest set of legal tender here in Canada.  Check out all of the details on the new security features put in place to establish consumer confidence in paper money in the time of electronic payments.  If you are a retailer, ensure that you speak to your suppliers of technology that deal with currency (bill pay kiosks, self-checkouts, vending machines, currency counters, etc.) as upgrades may be necessary due to the new material and security features of the bills.  Operational changes will certainly need to be take place to understand and communicate the new features to staff so that they can validate that no counterfeit notes are accepted at assisted service.  New $100’s are coming our way this November.  Expect the $50 in March 2012, and the $20, $10, and $5 in fall 2012.  Canadian $2 and $1 coins are also changing in late 2011 or early 2012 in an effort to reduce the cost of currency, so changes will be a foot for coinage as well.  The Dutch are actually adding a 2D barcode to their Euro coin – scan it and see where it takes you.

ZooshNarette is promising the ability to provide payment via ultrasonic communication instead of NFC.  Their promise is that a $30 upgrade gets you the hardware interface on a POS, and the required interface on the phone is in place using the speaker and microphone.   While an excellent attempt at finding the holy grail, this is yet another splinter in the ongoing mobile wallet debacle.  My main concern would be security.  It didn’t take long for Shopkick, which uses ultrasonic technology to get hacked.   Why couldn’t someone nearby just record the ultrasonic sounds and then translate them to bits they can use online?  I’m sure they have an answer, but I’m not sure I’m ready to try it with my own money yet.  via PSFK

Consumr – Like a Flixster for consumer goods, where users can review consumer goods, and ratings are provided from critics as well. No app yet, but you can see how this would provide a useful resource for shoppers once it gets onto a mobile app, where one can only assume it is headed.  One more social platform for grocers to ponder. via PSFK



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