2010.02 | Scan those Coupons!

Given the Great Recession, one hears a great deal about coupons to encourage shoppers to buy.  Coupons have been around for quite some time, but are still surprisingly low tech in Canada.  While grocer specific coupons and offers are scanned, manufacturer driven coupons are generally accepted as part of a manual process in Canada.   This is an area ripe for automation to the benefit of retailer and consumer alike for the following reasons:

  • Cost Savings – Given that 84% of households in Canada used coupons in 2008 one would expect significant manual effort in gathering the coupons, validating the manufacturer, and tracking down the reimbursements.  With the constant attempt to reduce cost and employee effort, this represents real potential savings to a retailer.  If this effort is not completed, the retailer is providing customers discounts for certain brands out of their own pockets.
  • Throughput – While clerks still need to check expiry dates and validate the product purchased (why isn’t that automated via a central database?) scanning removes the need for at least 5-6 keystrokes per coupon – saving valuable minutes to the checkout process.  More people get through the checkout faster, and fewer people are embarassed by pulling out their coupons or frustrated by those who do so in front of them in the queue.
  • Customer Convenience – Self service solutions like kiosks or self-checkout are rendered less beneficial if coupons require manual entry.  Keying in coupon amounts represents an operation too complex for self service, (not to mention a fraud risk) reducing the amount of customers that will use it.  For those that attempt it without knowing coupons are manual, the transaction will be slowed by attendant intervention and will discourage the use of self service.  This all adds up to customer frustration which can reduce sales.
  • Fraud Reduction – While it is not possible to completely eliminate fraud, the increasing use of GS1 Databar codes may help, and if the codes don’t work on the scanner, it is easier for a clerk to refuse the coupon – minimizing potential losses.
  • Redemption Tracking – Knowing one’s customers becomes increasingly important in competitive times.  Understanding coupon redemption will enhance market basket analysis.  Enabling vendors to get an accurate, timely view of how consumers respond to an offer is extremely valuable, and can also allow for quicker response to coupon problems as data will be available to understand behaviour electronically.

While marketers, vendors and retailers are certainly on top of providing coupons via electronic means – email, web, mobile – there are few to date that are leveraging around electronic coupons: via 2d barcodes, NFC, or redemeed automatically at the checkout via a loyalty card.  While the individual values are small, coupons are important to a value conscious shopper, and the collective impact of coupon automation could be significant, so breaking the code is key.

2009.20 | What Mobile Wallet?

I’ve been looking at using NFC solutions for some time now, and the recent announcement that Subway is going to install a Visa PayWave contactless solution reminded me of that fact. It’s solid technology, it works well, and I personally use it a couple of times per week where I can with my MasterCard Paypass credit card.

In Canada, we have infrastructure in place with most large retailers owning or deploying contactless infrastructure in some fashion – Subway, Second Cup, Rabba, McDonald’s, Canadian Tire, Petro Canada, Tim Horton’s, Cineplex, Loblaw and more moving to contactless support every day. I love it and think it’s a tremendous solution on cards.

We’ve also had a couple of trials in Canada on using NFC as a mobile wallet, with the credit card companies, the mobile carriers the and payment terminal companies all explaining the benefits, but what’s happening to take it to the next level?

Two big things hold back NFC as the mobile wallet (in Canada at least):

1. Acceptance – For 20 years and more, Canadians have been used to three options. Cash – no problem. Debit – swipe card, use pin. Credit – swipe card, sign receipt. Now we’ve added Chip and Pin to credit and debit. That’s confusing to the uninitiated. We also have contactless NFC cards and now dual interface NFC and Chip and Pin on the same card. There is word of Visa Debit competing with Interac.

Now, customers aren’t sure if they swipe, dip, tap, sign or don’t sign, or if there is a charge to use a service. Most of them will default to what they know. They are being asked to think about too much. In this case, it seems that competition is actually a bit of a problem.

2. Device Availability– I spoke to someone from a bank today that works with new solutions and when I asked about contactless, she said she was getting a ‘4 year old phone’ to use for a contactless trial. She uses a Blackberry and I use an iPhone. We represent a large proportion of the market for a mobile wallet in early days, and we can’t get a mobile wallet for our phones. Without NFC or some other secure way to pass information, the mobile wallet is just a mockup, and the fact is that you just can’t get an NFC phone in Canada. I’ve witnessed 1 mobile transaction in Canada and I was with my very knowledgeable Vivotech contact when we did it.

Why can’t we get NFC enabled mobile devices? Unless there is something in it for the mobile carriers, why would they give us a new feature like NFC mobile wallets on our phones? They can’t make more profit from it, and I think that is the greater concern with the trials than the functionality. The system works – it just doesn’t make money for the carriers. Impact: the mobile device makers won’t put something on the phone that carriers don’t want (like: tethering, Slingbox Player, VOIP, programming long distance card numbers etc.) so consumers don’t get them without delay and strategizing by the carriers.

There has also been a problem with hitting on a standard for NFC on mobile. Nokia is done with making their own NFC phones, and they are releasing a SIM card based NFC phone. But when will that happen, and who can really drive it? It may take a third party application to drive mobile NFC, but without a large presence to lend such an enterprise the necessary consumer confidence, this will prove a challenge.

Until payments are simplified and there is a universal (or at least accepted) NFC standard or a viable alternative method of getting data from phones to consumer facing touchpoints like POS/ATM/Kiosks, I don’t see mobile wallets going anywhere.

It’s a wonderful opportunity for anyone that can crack the code.

2009.17 | Convenience | DVD Landscape | Mobile POS

Taking the Store to Customers – Convenience has ever been important to consumer facing businesses, and there are many new and different ways that these organizations are trying to make their products and services more convenient for consumers to obtain.

The primary inconvenience of purchasing food from a mobile vendor is the difficulty of knowing where they are. Kogi Korean BBQ, a taco truck in LA, lets their customers keep track of their location via Twitter – taking uncertainty out of the mix.

Starbucks is looking to place coffee vending machines across North America that leverage electronic payment – including contactless – avoiding the necessity for having coins or small bills at the ready.

Coinstar is already doing very well with Redbox DVD rental machines. They add additional convenience by providing a reloadable credit card solution – a gap filler for those who wish to rent and don’t have a credit card. This should sound familiar, as this solution is available on an NCR platform used by Readycredit. These would be well placed next to NCR SelfServ Entertainment units.

The Changing DVD Landscape – The DVD rental industry is becoming increasingly complicated, with ever changing players, formats and scenarios. While the cheap DVD rental is a boon for the consumer, there are complications, as it represents a paradigm change for studios and consumers alike. Whatever the issues, expect them to be resolved, and this business to continue its growth for the next few years at the very least.

Mobile POS – I’ve already expressed my admiration for the handheld POS units used in Apple Stores. Now it looks like they might be taking the expected step of moving from their current Windows Based platform to an iPhone based solution with the soon to be released iPhone 3.0 software which allows improved connectivity and interoperability for hardware add-ons. This is key, as swiping a card is much faster than typing in a number, and EMV will require dip card readers in many countries.

While this platform doesn’t suit every environment, look for mobile based payment systems to act as the small business POS of the future. You can already download some from the iPhone app store today.

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