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March 28 2013

Commerce Weekly: Reimagining the stages of retail

The basics remain key in our radically changing retail environment

Warby Parker BusWarby Parker BusThis week, PandoDaily’s Sarah Lacy addressed the issue of whether or not brick-and-mortar retail is dead and argued that it’s more “dying as we know it” than dead-dead. Lacy pointed to several ecommerce 2.0 startups — online retailers expanding into brick-and-mortar — who are creating twists, or “tweaks,” in the traditional retail model, eschewing the traditional retail playbook.

Tweaks Lacy highlighted include stores such as Warby Parker and Bonobos employing the showroom model, sort of a reverse-engineered try-before-you-buy — i.e. order online — model; piggybacking on existing retail chains to secure customers and expand reach; and opening pop-up stores or experimenting with physical mobile retail — such as Warby Parker’s experiment driving glasses around the country on a refashioned bus.

Barbara E. Kahn at Harvard Business Review says the strength of these new companies as well as the successful old guard retail chains that remain is their ability to understand how the stages of retail fit into the new and changing retail environment. She looked at Ron Johnson’s grand plan for J. C. Penney and its (thus far) subsequent failure. Kahn described the rise and fall of Johnson’s innovative plan:

“… get rid of nonstop price promotions and introduce boutique ‘stores within the store.’ Surrounding these shops would be wide aisles that Johnson called ‘streets’ that would feature coffee and ice cream bars and places to surf the internet, and all of this would surround a town square for in-store activities and events. Much has been written about the faulty implementation of this strategy. Consumers failed to understand the confusing new pricing, the new stores could not be constructed quickly enough, and sales and stock price declined precipitously.”

Where did Johnson miss the mark? By forgetting that consumers were driven to shop at J. C. Penney by the very prospect of the sales — the “nonstop price promotions” — that Johnson eliminated, Kahn says. “The purchase process is staged,” she wrote. “First, consumers recognize a need, then they search for information about products that might solve that need, they create a consideration set, and finally make a choice. That the purchase process is multi-staged is something we’ve known for years, but in this new age of radical change in retailing and hyper global competition, it is easy to forget the basics.”

Kahn also reviews how several stores, including Best Buy, Warby Parker and Zipcar, are reimagining the various stages of retail to experiment and innovate — and survive — in this new era of retail. You can read her full piece at Harvard Business Review — it’s this week’s recommended read.

Retailers, your desperation is showing

As much as emerging models of ecommerce are branching out into brick and mortar, much of brick and mortar continues to desperately try to keep ecommerce out. In a piece at the Indianapolis Star, Ashley Petry looked at the various ways local store owners are battling the trend of showrooming, such as price matching, offering exclusive products, touting instant gratification, and even peer pressure. Petry reported:

“[Liz Barden, owner of Big Hat Books,] said she occasionally asks customers in her store to stop using their price-comparison apps, arguing that her selection of books represents a kind of intellectual capital. Sometimes, she said, her regular customers step in and chat with fellow shoppers about the importance of supporting local businesses.”

While employing peer pressure and guilt may be misguided attempts to remain relevant in our changing retail environment, a specialty food store in Brisbane, Australia, has taken the showrooming battle a step further, employing a strategy for the what-on-earth-are-you-thinking file: charging customers $5 for shopping without buying. Chris Morran at The Consumerist spotted a link on Reddit to a photo in the store’s window explaining the new browsing toll. The sign reads, “As of the first of February, this store will be charging people a $5 fee per person for ‘just looking.’ The $5 fee will be deducted when goods are purchased.” Morran, Cory Doctorow at Boing Boing and Matt Brownell at Daily Finance have solid outlines of the various ways this strategy is sure to backfire.

Experiments in thrifty retail

It’s looking like online retail is angling to get a foothold in the garage- and thrift-sale markets. Owen Thomas at Business Insider spotted an ad for a new eBay charitable program in the San Francisco area called Sell it Forward, in which a seller signs up to get a postage-paid bag sent to them, sends in their used stuff to eBay, eBay then hands it off to program partner Goodwill, which then tries to sell the items. If the items sell within two weeks, the customer splits the proceeds 50-50 with Goodwill; if not, the customer gets a donation receipt.

In a similar vein, Jessica Leber at MIT Technology Review took a look at a new startup called Yerdle that aims to encourage people to share and reuse items rather than buy new stuff. The startup, founded by former Wal-Mart global strategy exec Andy Ruben and green activist Adam Werback, has a marketplace linked to Facebook, according to Leber’s report, so users can sign in through Facebook to see what their friends have to give away or loan for free. Once an item is found, Yerdle would get paid to ship it between friends.

Leber noted Ruben’s inspiration behind the business model: “Every pound of product corresponds on average with more than 70 pounds in waste, he says, a problem he grew to care about when launching Walmart’s first sustainability initiative in 2005.” Ruben told her, “Just because someone is going to have a Halloween Party, it does not mean that a global supply chain has to be kicked into gear with every item being manufactured, transported and procured.”

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March 21 2013

Commerce Weekly: The lucrative art of tracking shopper behavior

Snooping on shoppers pays off

Liz Gannes took a look this week at how online retailers’ desires to track consumers’ shopping habits are resulting in emerging startups offering services to track various behaviors on behalf of retailers. In a post at All Things Digital, she highlights newly launched startup Sift Science, which tracks online shopper behaviors to uncover fraudulent activity, and Commerce Sciences, a startup in beta that offers online retailers a Personal Bar for their websites that uses behavioral science to increase online sales.

Gannes outlines a few interesting insights each company has gleaned from aggregating consumer shopping data. For instance, Sift Science has found that a shopper who types her last name in all caps is 5.6 times more likely to be a fraudster, and shoppers who don’t sign in with a Facebook log-in are four times more likely to be fraudsters. Early findings from Commerce Sciences include using the word “free” — as in “you have won a free coupon” as opposed to “you have won a coupon” — increases sales by 15%, and social influences from displaying what a user’s friends liked and bought had zero effect during the day but resulted in 49% more sales in the evening. You can read Gannes’ report at All Things Digital.

In related news, it turns out Facebook ads are strongly influencing the platform’s users’ buying habits, even if they’ve never ever clicked on an ad in Facebook. Farhad Manjoo reports at Slate on in-depth studies conducted by Facebook showing that ad clicks don’t matter. He reports:

“‘On average, if you look at people who saw an ad on Facebook and later bought a product, [fewer than] 1 percent had clicked on the ad,’ [Sean Bruich, Facebook's head of measurement platforms and standards,] says. In other words, the click doesn’t matter; people who click on ads aren’t necessarily buying, and people who are buying are almost certainly not clicking.”

More notable, however, might be the way Facebook is managing to gather this data. Manjoo notes that last year, Facebook partnered with consumer data aggregator Datalogix, which tracks the purchasing behavior of more than 100 million U.S. households by tying consumer identities to their purchases through store loyalty cards. Manjoo writes:

“Over the past few months, Facebook and Datalogix figured out a way to match their respective data sets in a manner that maintains people’s privacy … Facebook can now tie its users to the stuff they buy at supermarkets. Armed with this data, Facebook began running a series of analyses into the effects of advertising campaigns on its site. If, say, Procter & Gamble ran a Facebook ad for Tide, Facebook could look at Datalogix’s data to see whether people who were exposed to the ad tended to purchase more Tide in the weeks after the campaign.”

Manjoo looks at the differences between direct-response and demand-generation marketing, and compares Facebook’s ad practices with TV advertising. You can read his report at Slate — it’s this week’s recommended read.

Retail struggles to remain relevant

The days of the traditional retail mall are numbered, according to experts at this year’s MIPIM trade fair in Cannes. Tom Bill reports at Reuters that property experts at the show explained to him that “[m]alls must become more like full-service community centers to survive in the face of a growing list of failed retailers” and that European malls are looking to add such tenants as hospitals, art galleries, education centers and government offices in order to offer services that can’t be found on the web.

Christian Ulbrich, chief executive for Europe, Middle East and Africa at property consultant Jones Lang LaSalle, told Bill that shopping no longer provides enough of a reason for consumers to go to shopping centers. “Stores will get bigger and become more like adventure parks that attack all of your emotions,” he said. “For example, Globetrotter has a climbing wall and cycle track in its Frankfurt store to try out its products.”

In related news, the Kate Spade brand is doing its part to reinvent retail for the future consumer. Mark Wilson reports at Fast Company that the Kate Spade flagship store in Japan is experimenting with the lean startup concept.

The store teamed up with Control Group to digitize its new campaign that offers customers espresso to encourage them to linger and launches a new product every Saturday that can’t be found anywhere else. The Control Group outfitted the store with digital iPad signage that engages customers and allows them to interact with the store’s displays. The cloud-based set up also allows the store to track customer response. Colin O’Donnell, a partner at Control Group, told Wilson:

“They can see sales corresponding with a change. So you can do A/B testing seeing how you drive consumer behavior. Using those web analytics in the real world is a super exciting place to be.”

“With a lean startup mentality, Kate Spade doesn’t need to prognosticate the habits of their customer base,” writes Wilson. “They can hypothesize, test that hypothesis, and refine over time.” You can read Wilson’s full report at Fast Company.

Starbucks’ struggles with Square illustrate challenges all mobile wallets face

The Starbucks partnership with Square that launched late last summer might not be going as well as either company had hoped. Austin Carr reports at Fast Company this week that he and other writers and freelancers at Fast Company have been experimenting with the Square-Starbucks partnership in the wild, and the results were inconsistent at best. Carr writes:

“At worst, the service simply did not work. On average, however, the user experience was buggy and awkward, with Starbucks employees seemingly more confused about how Square works than their own customers. Our evidence is anecdotal — and our sample size small — but the results of our tests are telling, especially given the reputations Starbucks and Square have for customer service. It serves to show that however refined a user experience might be on a local level, scaling such a streamlined UX all at once is borderline impossible.”

Harry McCracken commented on Carr’s post in a piece at Time’s Techland, noting that the service worked well for him in tests at independent businesses last year, but the situation is a bit different at Starbucks because Square is integrated with Starbucks’ POS system and requires a QR code to be scanned. He adds that Carr’s experience is a “sobering reminder” of how difficult the transition from credit card to mobile wallet is going to be. “Plastic may be boring, but it’s universally accepted, it’s understood by both consumers and businesses — and it just works,” he writes. “That isn’t yet true of any of the challengers which are trying to render it obsolete.”

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March 14 2013

Commerce Weekly: Intuit Pay heats up U.K. mobile payments market

Intuit Pay enters U.K., PayPal Here takes on Square Register

On the heels of PayPal announcing it would bring PayPal Here to the U.K. later this year, Intuit launched its Intuit Pay mobile payments solution in the U.K. market. The platform includes a mobile app and a card reader, much like its competitors iZettle’s, Payleven’s and (soon) PayPal Here’s platforms.

Ingrid Lunden reported at TechCrunch that like its competitors, Intuit Pay will charge a per-transaction fee — in its case, a 2.75% flat rate — but unlike its competition, Intuit will offer its mobile payment card readers for free for a limited time. Lunden noted that Intuit Pay will be able to integrate with Intuit’s QuickBooks accounting software and its other business products, so offering the card reader for free doubles as an incentive for merchants to join Intuit’s business ecosystem.

The card reader at launch is available only for iOS devices, but Lunden reported that “other platforms like Android are on their way soon.”

In related news, PayPal launched PayPal Here for the iPad to compete with Square Register as a small business point-of-sale solution. Leena Rao reported at TechCrunch that the app — PayPal’s first native tablet app — features multiple log-in capability to accommodate multiple employees and multiple “cash registers,” and allows for a variety of payment methods, including swiping a credit card with PayPal Here, manual card number entry, and scanning a card using Card.io. Rao also noted that the app integrates with eBay’s RedLaser technology so merchants can scan barcodes to make a sale or even to add to their inventories, something Square Register isn’t yet capable of doing.

PayPal’s new iPad app only works in the U.S. using the PayPal Here dongle, but Rao reported that PayPal intends to integrate the technology with its international offerings in the future.

Insights into the future of retail from SXSW panels

Retail and the future of commerce has been a topic of sessions and discussions this week at the South by Southwest (SXSW) conference. In a post at Publishers Weekly, Rachel Deahl reported on the “Retail is Going Mobile” panel, which covered the ways in which mobile has already changed the retail experience and how it might influence it going forward.

Deahl highlighted comments from panel member Christopher Mason, CEO and co-founder of Branding Brand, who noted many retailers are falling behind in their mobile strategies, if they even have one. Deahl reported:

“Mason said that, of the top 500 retailers, 60% have a mobile consumer interface. This means, he noted, that for the first time, the relationship between the customer and the retailer is being shaped in a world where ‘the customer is ahead of the retailer.’”

Looking at where mobile is headed, Deahl noted that Mason pointed to Sephora’s new “skin scanner” technology that personalizes and IDs a customer’s unique skin tone and integrates with Sephora’s mobile app to send customers alerts when new products for their coloring arrive. “This kind of user experience, Mason feels, is where mobile retailing is headed,” Deahl wrote. “He sees mobile retailing apps focusing on using our personal information to improve and personalize the in-store experience, such as, say, alerting a customer how many pairs of shoes are in stock in their size when they enter the shoe store.”

In a post at Salon.com, Andrew Leonard covered an SXSW panel that featured Mondelēz International’s VP of global media and consumer engagement B. Bonin Bough. Bough related an in-store experiment that points to the future of retail. Leonard wrote:

“Bonin described an experiment with shoppers at Stop & Shop who used their mobile phones to scan the bar codes of the items they wanted to buy, and then paid with their phones at checkout. He said that by seeing what shoppers were scanning, in real time, Mondelēz could zap them coupons for different items physically located on that aisle and were able to significantly boost sales of those items. ‘Targeting people in aisle, in the moment, at the moment of truth, is the holy grail of retail marketing,’ said Bonin. This is how the millennial shoppers of the future, who are ‘more mobile, more connected, and more into sharing,’ will do their business.”

Time editor at large Harry McCracken also served as a moderator on an SXSW panel called “Mobile Disruption & the Rise of the Local Web” that addressed the rise of services involving commerce between local individuals, which are designed more for phones and mobile devices than for PCs. In a post at Time Tech, McCracken noted that the panel discussion kept circling back around to person-to-person lodging rental service Airbnb — one attendee in the session tweeted: “Wow… About a quarter of the room here at #SXSW2013 is staying at @airbnb place. Hotel chains – prepare for major disruption. #localweb.” McCracken aggregated tweets sent during the session using Storify to highlight the session’s key points — you can read his post at Time Tech.

FTC report tackles mobile payments concerns

The rapid growth in the mobile payments arena — one recent study estimated global mobile payments transactions could reach $1 trillion by 2015 — has caught the attention of the U.S. Federal Trade Commission (FTC). The government agency released a report this week, “Paper, Plastic… or Mobile? An FTC Workshop on Mobile Payments.” According to the press release, the report offers guidelines for developing dispute resolution policies, encourages industry-wide adoption of strong security measures, and “highlights the need for companies in the mobile payment sphere to practice ‘privacy by design,’ incorporating strong privacy practices, consumer choice, and transparency into their products from the outset.”

Diane Bartz reported at Reuters that the FTC’s report “also urged all companies in the mobile data chain — from app sellers to telecommunications companies — to encrypt the entire payment chain and take other steps to ensure that consumers’ data cannot be hacked and used to steal from them.” She noted the FTC also is encouraging mobile payments companies to be more transparent with consumers about how their data is collected and used, and quoted from the report: “‘Companies should provide reasonable security for consumer data and should limit data collection to that which is consistent with the context of a consumer’s interaction with that company,” the report said.’”

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March 07 2013

Commerce Weekly: Google may be prepping an Amazon Prime competitor

Is Google gearing up to battle Amazon head-on?

GoogleLogoGoogleLogoThe Google e-commerce rumor mill continued churning this week. Alexia Tsotsis reported at TechCrunch that Google is “stealthily preparing to launch an Amazon Prime competitor called ‘Google Shopping Express.’” Her sources indicated the service would undercut Amazon Prime’s annual fee of $79 by $10 to $15 and offer same-day delivery from local retail stores such as Target, Walgreens and Walmart. Tsotsis speculates that in launching this service, Google could make use of its recent purchases — BufferBox and Channel Intelligence — to corner the online-to-offline retail market.

Paulo Santos noted in a post at SeekingAlpha that if and when Google launches this service, Amazon will most likely match the annual price. He said estimates on the number of Amazon Prime members vary widely, but if the 7 to 10 million number is accurate, price matching would be a $70- to $150-million hit to Amazon’s bottom line. Santos concluded, “The move is a positive for Google, mild negative for eBay and strong negative for Amazon.com.”

Giving consumers what they want requires knowing what they want

Looking at how the race for same-day delivery is going to affect retail, Ad Age’s Lauren Sherman said the real threat is to the corner store and that indie retailers are going to have to change their marketing tactics to compete.

Sherman outlined three points made by Jeffrey Cole, director of the Center for the Digital Future at USC Annenberg, on how retailers are going to have to change their businesses to accommodate the change in consumer shopping behaviors. Cole highlighted mom and pop stores, arguing that local drugstores and convenience stores are going to have to offer the same convenient services as the major online retailers, such as same-day delivery, in order to survive. He also said universal free shipping will need to be offered by everyone and that retailers will need to offer more and bigger in-store deals, ala Black Friday door-buster deals.

In related news, results from a survey by The Boston Consulting Group (BCG) were released this week indicating same-day delivery might not be the holy grail online commerce giants think it is. Thad Rueter reported at Internet Retailer that only 9% of the 1,500 consumers surveyed said same-day delivery was “a top factor that would improve the online shopping experience,” compared to 74% who said free delivery was a top factor, 50% who cited lower prices, and 35% who cited free returns. Survey participants could select up to three “top factors”; same-day delivery didn’t come close to making the top three.

The press release summarizing the survey results stated that “[e]conomics dictate that retailers should offer same-day delivery for only a select number of products that are small and light and that carry high margins,” and pointed to electronics, office supplies and apparel as examples. In the release, BCG partner Rob Souza called same-day delivery a “niche service” and said it’s “unlikely to generate significant revenues for either retailers or carriers.”

The real mobile payments battle is to create a functional ecosystem

Mobile payments company PayOne filed a patent infringement lawsuit against Home Depot this week. The press release stated: “PayOne asserts that The Home Depot retail store deployment and use of PayPal’s in-store checkout infringes on multiple PayOne patents, including the use of a mobile phone number and a PIN (personal identification number) to complete the checkout process and payment at point of sale.”

In a post at The Motley Fool, Justin Loiseau quoted a statement PayOne president and CEO Joe Lynam made regarding the lawsuit:

“Since 2000, PayOne has invested significant time and money developing its proprietary mobile payment technologies designed to simplify the checkout process and the PayOne systems have been deployed by digital merchants across the globe. The ‘mobile wallet wars’ have moved beyond the digital world into point of sale, but now face adoption challenges and substantial friction with consumer setup requirements, security concerns and lack of merchant required NFC infrastructure. PayOne’s technology solves these challenges by enabling an ‘instant wallet’ capability that can be extended to the retail and physical world for billions of consumers worldwide, with no pre-registration or friction at point of sale, and no NFC infrastructure required.”

Lisa Ward noted at the Silicon Valley Business Journal that this isn’t PayOne’s first trip to court — in 2011, PayOne filed a lawsuit against PayPal that is still in court. Ward also reported that “PayOne has already sent patent infringement notices to several other retailers, including Jamba Juice, RadioShack and Barnes & Noble, but Home Depot is the only PayPal partner to have legal action taken against it so far.”

In a loosely related post at InformationWeek, Fritz Nelson shared some insights he gleaned last week at Mobile World Congress. Nelson noted that mobile payments discussions tend to “devolve into debates” about the efficacy of various mobile payments technologies — mobile wallets, NFC, QR codes, authentication systems — or on who will lead the way in setting payments standards or “run the payment rails.” He said he’s now convinced those are bits and pieces of the bigger picture — the race isn’t who can make the best digital wallet, but who can create the ecosystem that will allow for a “frictionless consumer experience.” You can read Nelson’s post at InformationWeek.

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February 21 2013

Commerce Weekly: Best Buy wants to end showrooming, Google wants to start

Google takes on brick-and-mortar; Best Buy takes on ecommerce

GoogleLogoGoogleLogoThe Google retail store rumor ignited again this week. Seth Weintraub reported at 9to5Google that “[a]n extremely reliable source has confirmed to us that Google is in the process of building stand-alone retail stores in the U.S.” to be opened in time for the 2013 holiday season. The Wall Street Journal’s Amir Efrati followed with confirmation from “people familiar with the matter,” though one of those people said it wouldn’t happen this year.

Across the board, analysts seem to think it’s a good idea. Alyson Shontell at Business Insider noted that as Google becomes more of a hardware company — with its Android devices, Google Glass, and self-driving cars — analysts say it’s time for Google to work on its brand image, which will require consumer interaction, something the company hasn’t done much of up to this point. Google executives seem to agree — Weintraub reported that retail store plans started to solidify along with plans to offer Google Glass to mainstream consumers. “The leadership thought consumers would need to try Google Glass first hand to make a purchase,” Weintraub wrote. “Without being able to use them first hand, few non-techies would be interested in buying Google’s glasses (which will retail from between $500 to $1,000).”

On the other end of the retail spectrum, brick-and-mortar big box retailer Best Buy is looking to strengthen its competitive edge against online retailers. The company announced this week that in its efforts to “end showrooming,” it will make its holiday price-matching policy permanent. Beginning March 3, the store will “price match all local retail competitors and 19 major online competitors in all product categories and on nearly all in-stock products, whenever asked by a customer,” according to a Best Buy press release. The release also stated that price matching will extend “post purchase” to include price reductions Best Buy makes within 15 days of a purchase. The company slipped in a change to its return and exchange policy as well — Kim Bhasin at Business Insider reported the new return/exchange period will drop to 15 days from 30, though Reward Zone Premier Silver members will retain their 60-day return eligibility.

A faberNovel study delves into the strategies behind Amazon’s success

This week, faberNovel released an update to its study “Amazon.com: The Hidden Empire.” John Geraci, faberNovel’s head of marketing, noted in a post at TechCrunch that since the first study was published in 2011, “a steady, ever-growing buzz has developed around Amazon as it becomes increasingly clear that they are really in for the kill with the retail industry, intending to spare no prisoners along the way.” Geraci outlined a few highlights from the study, including the fact that Amazon initially took aim at the B2B space with Amazon Supply, “but they clearly also want corporate-accounts domination — and they might succeed in getting it. He also noted Amazon’s continued willingness to experiment with disruptive business models, specifically highlighting textbook rentals for students.

The study, presented in a Slideshare (embedded below), offers a deep look into the paths behind the success of Amazon. Looking ahead, the study covers plans for the cloud, noting that “[e]ven though [Amazon Web Services] AWS is primarily a B2B offer, the Amazon cloud will ultimately be geared toward end-users.” It also looks at the company’s long-term goals to grow the Kindle ecosystem, achieve the same-day delivery holy grail, and lock itself in as a small and medium business supplier. You can view the complete study in the following Slideshare presentation:

Square further simplifies POS for merchants

In its continued efforts to democratize mobile payments for consumers and merchants, Square this week launched Business in a Box for Square Register. According to the press release, the package includes two Square Readers, an iPad stand, a cash drawer, and an optional receipt printer, all of which connect wirelessly to Square Register. The release noted the mobile payment obstacle Business in a Box aims to solve:

“Historically, business owners were forced to piece together multiple hardware components from various manufacturers, manage complicated contracts and pricing structures, and pay for expensive software licensing and service plans. Now, they can be up and running with Square Register in minutes.”

The price point is democratizing as well — the release stated that customizable hardware packages start at $299. Jordan Kahn at 9to5Mac did some digging into the customizations and associated costs. On top of the basic package, which Kahn noted includes a Heckler Design WindFall iPad Stand and an APG Vasario 1616 Cash Drawer, Square will provide a Star Micronics TSP143L Receipt Printer for an additional $300, for a total cost of $599. “We were able to find all the pieces of the package online (minus the free Square readers) for around $480,” Kahn wrote, “although that’s before any taxes or shipping costs.”

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February 14 2013

Commerce Weekly: You can now buy stuff with tweets

American Express turns Twitter into an ecommerce platform

American Express announced an enhancement this week to its Sync with Twitter feature — users can now buy things with a tweet. Tricia Duryee reports at All Things Digital that all users will need to register to participate, even previous users of the sync feature, in order to provide a delivery address for purchased items. Once registration is complete, Duryee says, the purchasing process is pretty straightforward:

“For instance, participants will be able to buy a $25 American Express Gift Card for $15 … by tweeting #BuyAmexGiftCard25. American Express will reply via Twitter, asking the user to confirm the purchase in a tweet. All products will be shipped via free two-day shipping.”

Duryee reports that more items have been added since the launch and deals will be offered for three-week periods.

American Express SVP of digital partnerships and development Leslie Berland told Duryee that Twitter is just the beginning — the service will eventually be offered on other platforms, such as Facebook.

While fun and novel for consumers, Forbes’ B. Bonin Bough notes the value of the ecommerce partnership for participating retailers: “Having customers promote brands while buying them is a win-win situation,” he said, “and could potentially lead to incredible results — that is, if AmEx and Twitter can get this new purchasing behavior to catch on with consumers.”

Purchasing behavior may not end up being the ultimate obstacle, however. Angel Djambazov at GeekWire took a look at the potential security issues of the program, noting that “security has never been Twitter’s strong point. The platform is rife with phishing.”

Could 3D printing bring down retail?

The ForeSee Mobile Satisfaction Index: Holiday Retail Edition was released this week. The survey of more than 6,200 shoppers reviewed the consumer experience during the 2012 holiday shopping season.

One of the highlights of the report addressed the trend of showrooming. Eric Feinberg, senior director of mobile at ForeSee and co-author of the report, said for the press release, “Customers are using their mobile phones as integrated parts of their shopping experience … Mobile is the ultimate companion channel, making showrooming as much of an opportunity as it is a threat.”

But it’s not as big an issue as some retailers may think. Commenting on the report, ForeSee president and CEO Larry Freed told Chantal Tode at Mobile Commerce Daily:

“The idea that everyone is going to be looking at Amazon’s app when they are in Target and Walmart is proving out not to be true, and I think retailers need to continue to focus on providing a great integrated experience between that phone and that retail environment so that there is a value add for a consumer when they are in Target to go to Target’s app or site instead of going to Amazon’s.”

Fretting over showrooming may be a bit shortsighted on the part of retailers, however — the real concern for the future of retail may have more to do with 3D printing. Dalton Caldwell took a look this week at a recent statement by Marc Andreessen that the chain retail model is “a fundamentally implausible economic structure,” arguing that few stores “can survive a decline of 20 to 30 percent in revenues.”

Caldwell says he isn’t sure he agrees with Andreessen’s prediction, but that “[i]f we accept Andreessen’s argument that most retail companies could be put out of business by a 20-30% decline in revenue, 3D printing could be plausibly be the vector by which this scenario is manifested.” He points to items such as toys and sports equipment, and home improvement items such as plastic drywall anchors.

Not everything can or will be replaced by 3D printing, Caldwell notes, but taking the things that can into consideration along with retail stores’ “revenue sensitivity caused by debt” might just lead the future Andreessen predicts. You can read Caldwell’s full piece on his personal blog.

Pay at the pump gets PayPal

PayPal announced this week that through its partnership with retail petroleum company Gilbarco Veeder-Root, it now will offer mobile payments at the gas pump.

“The initial effort will launch the PayPal payment capability to retailers with Passport point-of-sale (POS),” Lucy Sackett, director of outbound marketing for Gilbarco Veeder-Root wrote in a press release. “Future developments will bring PayPal solutions to Gilbarco’s growing suite of media and merchandising applications.”

Sarah Perez at TechCrunch notes the impact of the Gilbarco deal, reporting that “the 150-year old Gilbarco currently works with 19 of the top 20 convenience store operators in the U.S.” and that company “has installed over 30,000 POS systems across North America which will now see PayPal integrations.”

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February 07 2013

Commerce Weekly: Google targets Amazon’s shopping platform

Google acquires Channel Intelligence, pursues Amazon shoppers

GoogleLogoGoogleLogoIn a recent post at Wired, Marcus Wohlsen took a look at the success of Google’s switch last fall to all-paid product listings — such as the top result for a search for iPhone 5 — and how it fits in to Google’s plans to compete against Amazon on the shopping front.

Chris Lien, CEO of Lawson and Marin Software, noted to Wohlsen that shoppers either start their searches at Amazon or at Google and that Amazon has been encroaching on Google’s turf as it becomes more of a “commerce search engine.”

In order to compete, Wohlsen writes, Google is establishing itself as a place not only to research products, but also to buy them. Lien says Google likely doesn’t intend to start its own warehouses, but rather to “package the sale from search to checkout” and let merchants take it from there. Marin marketing VP Matt Lawson told Wohlsen, “What you’re going to see [Google] do is do everything they can to enable marketers to sell through their platform.”

This week, Google took a major step in that direction with its acquisition of Channel Intelligence (CI) for $125 million. In a post at Forbes, TJ McCue describes CI as specializing in product ecommerce, offering data-driven services aimed at increasing online sales, and he highlights one of the company’s most successful products — the CI Where-to-Buy button.

Engadget’s Donald Melanson updated his report on the acquisition with a statement Google released regarding the purchase:

“We want to help consumers save time and money by improving the online shopping experience. We think Channel Intelligence will help create a better shopping experience for users and help merchants increase sales across the web.”

Digital wallet? What’s that?

A new study from comScore showed that the slow adoption rate of digital wallets may have something to do with a lack of awareness — only 51% of consumers in the U.S. were aware of digital wallets, aside from PayPal, which had a 72% awareness rate, according to the study.

Andrea Jacobs, comScore Payments Practice Leader, said for the press release that the low adoption rates could be attributed to multiple factors, such as low awareness and a lack of understanding of the benefits, from the consumer as well as the retailer side. She also noted that this isn’t the first time we’ve experienced steep barriers to adoption in the financial services industry: “There was a time when consumers were reluctant to use ATMs for similar reasons, and, today, look at how far we’ve come since the 1970s and 1980s.”

There are some indications of a bright future for digital wallets, however, when all aspects of the ecosystem are in place. Kevin Fitchard reports at GigaOm that Isis chief sales officer Jim Stapleton says their wallet trial in Salt Lake City “is producing positive results from both consumers and merchants,” with users paying with the wallet five or more times per week.

Stapleton wouldn’t specify the number of users Isis has at this point, Fitchard reports, but he said “the typical Utah Isis customer follows five different merchants using the wallet’s loyalty card and coupon features, and a customer who signs up for a business’s loyalty program tends to visit that business twice as often as a regular customer.”

“Social commerce” is driving growth in US ecommerce market

Reports this week showed global ecommerce sales topping the $1 trillion mark. Though the U.S. leads the world in ecommerce sales, ecommerce represents a “scant 4% of American retail sales,” according to Business Insider’s Alex Cocotas’ research. He notes, though, that the channel is “growing faster than its offline counterparts” and highlights the major drivers: mobile commerce and social media. Cocotas points to such success stories as “social commerce” sites ShoeDazzle and Fab.

According to Jim Edwards at Business Insider, Facebook advertisers can attest to the power of “social commerce.” Edwards looks at Facebook’s mobile app install ads, which on first blush appeared to be geared at mobile game and app developers. “But several of Facebook’s big advertising clients who have used the ads in Q4 indicated that the ads can be used to develop e-commerce on Facebook,” Edwards writes, “turning the social network into a mobile shopping and sales device.”

Edwards explains that the apps are more valuable to advertisers than ad impressions because a consumer with an app is likely to use it more than once, resulting in a “‘lifetime’ of revenue” as opposed to a one-off sale. After testing the ad unit, Edwards reports, Fab.com CEO Jason Goldberg said Fab’s shopping app was “[f]ive times more effective than any other mobile download channel that we’ve used.”

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January 31 2013

Commerce Weekly: Goodbye traditional retail, hello ecommerce

Here are a few stories that caught my attention in the commerce space this week.

Death bells toll for brick-and-mortar retail

A recent report from mobile analytics startup Flurry looked at the growth in consumer use of shopping apps and concluded the “App & Mortar economy has arrived.” Flurry president and CEO Simon Khalaf reviewed their research results in a blog post on the company website, noting that “consumer time spent in Retailer Apps has skyrocketed by 525% from December 2011 to December 2012,” exceeding the shopping app growth of 274% as well as overall app growth of 132%.

Khalaf points out that it’s “mission critical” for retailers to start extending their reach to consumers beyond the brick-and-mortar walls and into connected devices such as smartphones and tablets. “In the App & Mortar economy, the battle for deeper consumer relationships is beginning,” he writes, “and there are already thousands of apps for that.”

Flurry’s research may be coming up short of the long-term big picture if well-known entrepreneur and investor Marc Andreessen is correct. Andreessen told PandoDaily’s Sarah Lacy that traditional retail is on its death bed:

“Retail guys are going to go out of business and ecommerce will become the place everyone buys. You are not going to have a choice. We’re still pre-death of retail, and we’re already seeing a huge wave of growth. … Retail chains are a fundamentally implausible economic structure if there’s a viable alternative. … Malls are going under, and there’s more to come. These chains are much closer to going under than you think.”

Andreessen noted to Lacy that it’s not only the implausible economic structure of physical stores that will bring down traditional retail, but that online retailers like ShoeDazzle and Fab are finally starting to compete on the shopping experience front, providing the entertainment and social aspects of shopping that have been keeping traditional retail afloat.

On his Launch.co platform, entrepreneur and blogger Jason Calacanis agreed with Andreessen’s assessments, with the exception of “considered purchases and ‘social shopping.” “I mean, I could order Disney toys online, but visiting the store is a blast with my daughter,” he writes. “Clearly we don’t need to visit a store for toothpaste, underwear or even shoes when you have Zappos, Everlane and Amazon in the mix.”

Starbucks hints at CPG customer rewards, Intuit buys Payvment

In an earnings call with analysts this week, Starbucks CEO Howard Schultz discussed the company’s fiscal first quarter success in its digital and mobile platforms and touched on plans for expansion. Mobile Commerce Daily’s Chantal Tode quotes Schultz’s comments during the call:

“Over the next few months or so, we’ll be coming back to you and sharing with you the plans that we have to take advantage of Starbucks products within CPG, and specifically grocery, and leveraging the technology and the advancement of providing value to our customers that are buying Starbucks products in grocery, and leveraging the card.”

You can find a full transcript of the earnings call at Seeking Alpha.

In other expansion news, financial software company Intuit purchased ecommerce platform Payvment this week and revealed further expansion plans. Ingrid Lunden reports at TechCrunch that the company plans to roll out more than 20 new products this year in such areas as “payments technologies using NFC and Apple’s Passbook, consumer-focused big data apps, and new products for its Mint financial-management range.”

Lunden provides a rundown of several of the planned products, along with product comments from Intuit CEO Brad Smith, in her report at TechCrunch.

Newegg defeats “shopping cart” patent troll

The courts have put one patent troll in its place. Joe Mullin reports at ArsTechnica that Soverain Software’s long-running “shopping cart” patent lawsuits were brought to an end January 22 when Newegg “won an appeal ruling [PDF] that invalidates the three patents Soverain used to spark a vast patent war.”

The ruling not only affects Newegg’s lawsuit, but also shuts down Soverain’s lawsuits against many other companies, including Nordstrom’s, Macy’s, Home Depot, RadioShack, and Kohl’s. Mullin reports that Soverain also will lose the $18 million verdict it had won against Victoria’s Secret and Avon. “The ruling in the Newegg case is a total wipeout for a patent troll that had squeezed many millions from online retailers, was backed by big-firm lawyers, and was determined to collect hundreds of millions more,” writes Mullin.

Newegg’s Chief Legal Officer Lee Cheng told Mullin, “We basically took a look at this situation and said, ‘This is bullshit’ … now, nobody has to pay Soverain jack squat for these patents.”

You can read Mullin’s in-depth report on the ruling and the history of the long-running case at ArsTechnica.

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January 24 2013

Commerce Weekly: Analytics for people, the next big thing in retail

Here are a few stories that caught my attention in the commerce space this week.

New trend in retail customer tracking: Smartphone Wi-Fi

my wifi hotspot is cooler than yours, on Flickrmy wifi hotspot is cooler than yours, on FlickrDan Tynan posted a two-part series (here and here) on IT World this week looking at growing trend of retail Wi-Fi tracking — retailers keeping track of you via your smartphone as you shop, much like online retailers keep track of your movements across the Internet. Tynan explains how they’ll do it:

“When you come within range of a properly configured Wi-Fi access point, it can record the wireless MAC address of your phone — a unique 12-digit number. Every time you pass by, that AP can log that number. … Think of it as Google Analytics for people; instead of measuring Web traffic, they’re measuring foot traffic.”

Tynan takes a look at Euclid Analytics’ software, which works with tracking device systems to help stores gather data on customers, from which aisles they spend time in to how many times they’ve visited the store to which locations they frequent. “[T]hey can even track people who walk by the store every day but never go in,” Tynan writes, “or [know] if more people enter after a window display is changed.” He notes that Euclid gathers data anonymously and in aggregate, storing the MAC address “in a one-way hash, so nobody can go backwards and figure out your actual MAC address,” but that the minute a shopper swipes a credit card, all anonymity is lost, at least as far as connecting a particular phone to a particular purchase.

Once an identity is linked to a MAC address, “all kinds of fun things can happen,” Tynan reports — retailers could text you as you walk by their stores in the mall and offer discounts or coupons to lure you inside, connect your in-store data to your online data for even deeper analysis, or even sell your data to someone else. He explores some of the privacy concerns and scenarios in his first piece and talks with Euclid Analytics director of marketing John Fu for some context in his second piece. Fu says their technology is — purposefully — not as Big Brother as it sounds:

“There are some powerful and potentially scary things you could do with this data if you wanted to, but I want to clarify that we are not doing any of those things. We anticipated these scenarios and came up with ways to prevent them from happening.”

In addition to creating a one-way hash for a customer’s MAC address, Euclid requires retailers to contractually agree “to not combine the behavioral data they collect with information they have about an individual’s identity,” and the company also “salts its data with a ‘statistically insignificant’ number of fictional customers” to further prevent customer identification, Tynan reports. He takes an in-depth look at some real world examples of Euclid’s use in retail locations and their efforts to protect consumer privacy, but also notes that “Euclid is only one of a half dozen companies using different techniques to help retailers track shoppers, most of which don’t bother to tell you.” You can read his complete report at IT World — part one, part two.

Payleven gets investment boost in pursuit of Square-like success

Europe’s Square-like mobile payments platform Payleven announced a new funding round — and a new mystery investor — this week. Ingrid Lunden reports at TechCrunch that “neither the exact funding figure, nor the investor, have been disclosed — except to note that the value is in the ‘high single-digit millions’ of dollars, and that it is ‘largely’ from the new backer.” Along with the funding round announcement, Lunden reports, Payleven also confirmed reports of a group of backers who invested “double-digit millions” last year: New Enterprise Associates, Holtzbrinck Ventures, ru-Net and Rocket Internet.

Lunden says Payleven, which has launched in Germany, the Netherlands, Italy, the UK, Poland and Brazil, still hasn’t disclosed its number of users, but a company spokesperson told her the new funding will be used to build out current markets and to continue Payleven’s international push.

Back stateside, Fast Company’s Austin Carr took a look at what’s making Square successful in the U.S. — and now Canada. Carr writes that part of Square’s success stems from an atmosphere of collaboration geared toward problem solving and a blurring of the lines between engineering and design teams. Square CTO Bob Lee told Carr:

“We’re not just a design company; we’re not just an engineering company. We’re strong in both areas — we need to be. … From an engineering perspective, design is not just about how something looks, but about how something works. We look at reliability, robustness, and performance as features of the design.”

Carr takes an in-depth look at how the company’s teams foster a high level of collaboration through weekly town square meetings, “where everyone from engineers to PR workers can show off their latest projects;” through the design team’s weekly creative reviews, where all work is pinned up and presented gallery-style for all designers to peruse and comment; and through internal education. He also looks at Jack Dorsey’s leadership style and how he manages to make credit card processing, receipts and point-of-sale systems “whimsical and interesting.” You can read Carr’s full report at Fast Company.

NFC’s real role in mobile commerce: Consumer engagement

Mark Bonchek argued this week at Harvard Business Review that the potential for NFC technology in mobile phones goes way beyond payments. “It has the potential to, as no technology before, bridge the gap between virtual and real,” he writes. Bonchek offered up the example of Kraft Foods’ pilot program, which tested consumer responses to an NFC marketing campaign:

“In select grocery stores, small signs were placed on shelves in front of Kraft cheese and Nabisco cookie brands. The signs invited consumers to get recipes, download a mobile app, or share with friends. Consumers could either tap with an NFC-enabled device or snap a QR code — up to now the main technology for linking mobile devices to physical displays. The results were quite remarkable. People were 12 times more likely to tap than snap. Considering that the ratio of QR to NFC-enabled phones is currently about 10 to 1, this means tapping was 120 times more engaging than snapping.”

The level of engagement wasn’t simply the result of novelty, Boncheck reports. Data from the pilot showed that 36% of the people who tapped the sign “converted it into action, whether saving a recipe, downloading the Kraft app or sharing with friends, etc.” Boncheck also notes that consumers who tapped the sign spent 48 seconds engaged in the experience, as opposed to the standard five to 10 seconds of normal brand engagement at the shelf.

Boncheck looks at several advantages NFC wields over current technology and notes that though it won’t happen overnight, “the ability to make the real world clickable holds great promise. … Taps are the new clicks.” You can read his full report at Harvard Business Review.

Photo: my wifi hotspot is cooler than yours by woodleywonderworks, on Flickr

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January 17 2013

Commerce Weekly: PayPal marches toward ubiquity

Here are a few stories that caught my attention in the commerce space this week.

PayPal expands its footprint with new partners

PayPal JambaJuice AppPayPal JambaJuice AppPayPal announced this week it has expanded its U.S. footprint to include 23 new partners for its PayPal in-store payments service, in addition to the 15 national partners announced last May, making its service available in 18,000 physical store locations across the country.

According to a post on the PayPal blog, new retail partners include Barnes & Noble, Office Depot, Foot Locker and Jamba Juice, and “two additional partners that [they] will share publicly soon.”

The deal PayPal struck with Jamba Juice goes beyond the in-store payments service that allows customers to pay with their phone number and a pin, or by using their PayPal payment card. Chloe Albanesius reports at PCMag that PayPal is testing its PayPal App in one Jamba Juice location to allow customers to place and pay for their orders, so when they arrive at the location, they just have to pick up their smoothie.

Global product VP Hill Ferguson notes in a post at the PayPal blog, that the feature is available only for iPhone users at this point and that there are plans to expand to more Jamba Juice locations this year.

In addition to its announcement of new retail partners, PayPal also announced a new hardware partner. Sarah Perez reports at TechCrunch that PayPal is “also partnering with point-of-sale and hardware maker NCR to expand into restaurants, as well as into other businesses, including gas stations and convenience stores.”

PayPal retail services VP Don Kingsborough explains on the PayPal blog that in the first phase of the agreement, PayPal mobile payments options will be integrated into the NCR Mobile Pay app and NCR Aloha Online Ordering. “PayPal will be a payment option and allow consumers greater choice for simple, fast and secure purchases, alongside credit or debit cards.,” Kingsborough writes. “Consumers will also be able to use the PayPal mobile application to locate, order-ahead and “check-in” at participating NCR Mobile Pay merchants to access the same functionality.”

According to Kingsborough’s post, the agreement also will involve integrating PayPal mobile payments into NCR’s Convenience-Go (C-Go) app for gas stations and convenience stores and an enhancement to NCR’s Netkey Endless Aisle app “to enable in-store payments with PayPal to either buy-in-store or provide shipping capability for out of stock items.”

Mobile wallets aren’t trumping credit cards, but perhaps Apple’s can

Mobile Commerce managing editor Bill Siwicki argued this week in a post at Internet Retailer that mobile wallets are not going to catch on anytime soon “due to a variety of hurdles, credit cards being perhaps the biggest.” Quoting an email exchange with Ben Saren, vice president of marketing at payment processor Litle & Co., Siwicki writes:

“‘People are never going to switch to mobile wallets as long as it’s just as easy to pull out a credit card as it is to pull out your phone. There’s no incentive to change the channel,’ Saren says. … ‘Love or hate the card networks, they have paved all of the highways and largely made them traffic-free. When you go to a retail location and buy something with a piece of plastic, the authorization happens in less than a second. … So somebody needs to tell me how the system is broken today and why we need something else.’”

Siwicki does note, however, that though “mobile wallets today are not a better mousetrap,” they do connect with the Internet in ways that credit cards can’t, which opens new avenues for merchants to offer coupons and loyalty programs. “Somewhere down the line, way down the line,” Siwicki writes, “I think making payments via smartphones will catch on, simply because of the central role smartphones are coming to have in people’s lives.”

In that same vein, SAS Institute’s Lori Schafer argued this week at the NRF 102nd Annual Convention & Expo that Apple is in a better position to disrupt mobile payments than current competitors. Quoting Schafer from her session, The Tech Titans’ War for Mobile Dominance – How Amazon, Apple, eBay, Facebook and Google are Shaping Our Mobile World, Lauren Johnson reports at Mobile Commerce Daily:

“‘When Apple adds in NFC, it will have two advantages over everyone else,’ [Johnson] said. ‘First, the iTunes database is huge, with over 400 million people already signed up. Second, the iPod touch and iPads are fast gaining traction as the next generation of cash registers, and a number of retailers are now starting to roll them out to their associates in-store instead of using the traditional cash register. This sets up Apple to potentially own both sides of millions of transactions.’”

Mobile commerce strategies shouldn’t hinge on transaction data

Amy Martinez observed at The Seattle Times this week that retailers are “lukewarm” about integrating mobile commerce into their sales strategies. Citing a new report from Forrester Research, Martinez notes that smartphones only generated $5 billion of the $226 billion e-commerce market in 2012, and because of that, “[r]etailers will continue to invest in mobile strategies, but the bulk of their technology spending in 2013 will be on the basics, such as improving online checkout, product descriptions and the overall user experience, according to the report.”

In a presentation at the National Retail Federation’s annual convention this week in Manhattan, Martinez reports, Forrester analyst Sucharita Mulpuru said that “[r]etailers have been burned getting very, very hyped up over mobile … Even though consumers have these phones, the number of transactions on those phones is still small.”

Responding to Martinez’s piece, Colin Gibbs at GigaOm Pro writes that he doesn’t doubt Forrester’s data, but argues that mobile commerce is more than transactions. Gibbs says the very fact that smartphones are an inferior platform for browsing, price checking and entering or linking to credit card information is the reason retailers need to step up their mobile strategies. He writes:

“That’s why the top priorities for retailers in the mobile world should be building solid mobile websites, establishing relationships with their customers, delivering targeted ads and discounts, and encouraging them to come in to the store or to visit online stores on their PCs.”

Gibbs argues that even though closing mobile transactions remains difficult, “ignoring every mobile commerce strategy is short-sighted and dangerous.”

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January 10 2013

Commerce Weekly: Isis Wallet/NFC payments struggle for a foothold

Here are a few stories that caught my attention in the commerce space this week.

NFC-enabled Cashwrap case equips iPhone with Isis

At the 2013 International CES this week, Incipio and AT&T announced the launch of Cashwrap, an NFC-enabled iPhone case that equips iPhones with the Isis Wallet, currently only available for NFC-compatible Android phones. According to a post at 9to5Mac, the case will be available in March and will cost $59.99 to $69.99.

9to5Mac shot a short video of the product from the CES show floor (the Cashwrap representative mistakenly indicates the case will support iPhone 5 — at launch, it will support iPhone 4 and 4S):

When Isis launched in October, some questioned the viability of the payment platform and whether or not it was addressing a real problem. In a report at Consumer Reports, Jeff Blyskal concluded: “Isis, like Google Wallet, still seems to require a lot of work and needless complexity for the questionable convenience of paying by cell phone.” Now, on top of the complexity and questionable convenience of NFC payment, iPhone users must not only attach an appendage to the phone, but fork over a not-so-insignificant amount of cash — all for a payment platform that’s only available in Salt Lake City and Austin, and only at select retailers.

At Telecoms.com, Elliott Holley covered a recent report by financial research firm Celent that says the issues NFC payment technology has faced thus far are only going to be compounded in 2013 and that NFC payment solutions will be overshadowed — perhaps ultimately replaced — by cloud-based wallets. Celent senior analyst and author of the report Zilvanas Bareisis told Holley that not only is using the technology still much more difficult than swiping a credit card, but in markets such as the U.S., “the infrastructure bill is huge and convincing retailers and merchants is difficult.”

Holley highlights a key insight from the Celent report:

“Part of the problem for NFC digital wallets is that while the physical POS world is dominated by cards and the mobile equivalent is to have payment credentials inside the phone and sent to the POS via NFC, the online world is dominated by cloud-based wallets such as PayPal. That makes it difficult to bridge the online-offline convergence of customers who use their mobiles while shopping to read product reviews, compare prices and order online, or pick up an item from a local store, according to Celent.”

Target goes all-in with its price match strategy

Target announced this week that it would bring its holiday strategy against Amazon to the overall retail battle — the big-box retailer will now price match online retailers year-round. According to the press release, in addition to Amazon, Target will price match its own online site, Walmart.com, Bestbuy.com and Toysrus.com.

Best Buy implemented the same strategy against Amazon during the holiday season. There’s no news yet on whether Best Buy’s policy also will be continued year-round, but on a visit to Best Buy January 5, the retailer price matched a Bluetooth wireless speaker for me, using a product search of Amazon from my iPhone. Some are calling this tactic an all-in bet that can’t be won, but in the short-term anyway, consumers sure are winning.

App aims to make products the new point of sale

Bridging the gap between print advertising and online/mobile retail is something of a holy grail in the commerce space — being able to buy a product straight from a traditional print ad, for instance. PayPal recently experimented with such an endeavor, partnering with The West Australian daily newspaper to incorporate QR codes into print ads, allowing readers to purchase items on the spot by scanning the code. But what if you could skip the added complexity layer of a QR code? That’s what German startup Shopgate is aiming to offer. The app, profiled by Will M at SocialTimes this week, allows consumers to simply scan the product in the ad and, according to the product website, buy it in two clicks. Will M describes how it works:

“Shopgate enables consumers [to] take pictures of print ads and then purchase products within them using their phone. Product tagging works without QR codes — similar to how Facebook identifies your friends in pictures and suggests them for tags. People touch the product tags, put the items into shopping carts and then purchase products via a mobile storefront.”

Will M reports that the company’s vision is to provide “everywhere commerce,” and says “Shopgate executives say ‘Products as POS’ (Point of Sale) is the future of mobile commerce.” According to his report, the app works with product companies and retailers alike, and so far has 800 merchant partners. In addition to product tagging from print ads, the app also works with QR codes and UPC codes.

The German company plans to expand to the U.S. market early this year. You can watch a demo of the app in the following video.

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Commerce Weekly: Isis Wallet/NFC payments struggle for a foothold

Here are a few stories that caught my attention in the commerce space this week.

NFC-enabled Cashwrap case equips iPhone with Isis

At the 2013 International CES this week, Incipio and AT&T announced the launch of Cashwrap, an NFC-enabled iPhone case that equips iPhones with the Isis Wallet, currently only available for NFC-compatible Android phones. According to a post at 9to5Mac, the case will be available in March and will cost $59.99 to $69.99.

9to5Mac shot a short video of the product from the CES show floor (the Cashwrap representative mistakenly indicates the case will support iPhone 5 — at launch, it will support iPhone 4 and 4S):

When Isis launched in October, some questioned the viability of the payment platform and whether or not it was addressing a real problem. In a report at Consumer Reports, Jeff Blyskal concluded: “Isis, like Google Wallet, still seems to require a lot of work and needless complexity for the questionable convenience of paying by cell phone.” Now, on top of the complexity and questionable convenience of NFC payment, iPhone users must not only attach an appendage to the phone, but fork over a not-so-insignificant amount of cash — all for a payment platform that’s only available in Salt Lake City and Austin, and only at select retailers.

At Telecoms.com, Elliott Holley covered a recent report by financial research firm Celent that says the issues NFC payment technology has faced thus far are only going to be compounded in 2013 and that NFC payment solutions will be overshadowed — perhaps ultimately replaced — by cloud-based wallets. Celent senior analyst and author of the report Zilvanas Bareisis told Holley that not only is using the technology still much more difficult than swiping a credit card, but in markets such as the U.S., “the infrastructure bill is huge and convincing retailers and merchants is difficult.”

Holley highlights a key insight from the Celent report:

“Part of the problem for NFC digital wallets is that while the physical POS world is dominated by cards and the mobile equivalent is to have payment credentials inside the phone and sent to the POS via NFC, the online world is dominated by cloud-based wallets such as PayPal. That makes it difficult to bridge the online-offline convergence of customers who use their mobiles while shopping to read product reviews, compare prices and order online, or pick up an item from a local store, according to Celent.”

Target goes all-in with its price match strategy

Target announced this week that it would bring its holiday strategy against Amazon to the overall retail battle — the big-box retailer will now price match online retailers year-round. According to the press release, in addition to Amazon, Target will price match its own online site, Walmart.com, Bestbuy.com and Toysrus.com.

Best Buy implemented the same strategy against Amazon during the holiday season. There’s no news yet on whether Best Buy’s policy also will be continued year-round, but on a visit to Best Buy January 5, the retailer price matched a Bluetooth wireless speaker for me, using a product search of Amazon from my iPhone. Some are calling this tactic an all-in bet that can’t be won, but in the short-term anyway, consumers sure are winning.

App aims to make products the new point of sale

Bridging the gap between print advertising and online/mobile retail is something of a holy grail in the commerce space — being able to buy a product straight from a traditional print ad, for instance. PayPal recently experimented with such an endeavor, partnering with The West Australian daily newspaper to incorporate QR codes into print ads, allowing readers to purchase items on the spot by scanning the code. But what if you could skip the added complexity layer of a QR code? That’s what German startup Shopgate is aiming to offer. The app, profiled by Will M at SocialTimes this week, allows consumers to simply scan the product in the ad and, according to the product website, buy it in two clicks. Will M describes how it works:

“Shopgate enables consumers [to] take pictures of print ads and then purchase products within them using their phone. Product tagging works without QR codes — similar to how Facebook identifies your friends in pictures and suggests them for tags. People touch the product tags, put the items into shopping carts and then purchase products via a mobile storefront.”

Will M reports that the company’s vision is to provide “everywhere commerce,” and says “Shopgate executives say ‘Products as POS’ (Point of Sale) is the future of mobile commerce.” According to his report, the app works with product companies and retailers alike, and so far has 800 merchant partners. In addition to product tagging from print ads, the app also works with QR codes and UPC codes.

The German company plans to expand to the U.S. market early this year. You can watch a demo of the app in the following video.

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January 03 2013

Commerce Weekly: iPhone NFC rumors return

Happy new year! Here are a few stories that caught my attention in the commerce space recently.

Apple NFC rumors revived

PassbookiPhonePassbookiPhoneWe’ve no sooner outfitted our shiny new iPhone 5s with cases and fancy accessories than rumors of the iPhone 6 have emerged. Matt Brian reports at The Next Web that “Apple has been testing hardware relating to a new ‘iPhone6,1′ identifier, powered by a device running iOS 7.”

There’s also renewed rumors of Apple’s intention to integrate NFC technology into the next iPhone. Mikey Campbell reports at Apple Insider that on December 20, 2012, the US Patent and Trademark Office published a patent application filed by Apple in 2011 “for an ‘Integrated coupon storage, discovery, and redemption system,’ a property covering the receipt, storage and use of digital coupons on mobile device” — basically, what Passbook became this past year. Campbell notes that NFC capabilities also are mentioned in connection with coupon redemption, indicating “that the company is at least thinking about including the protocol in future versions of the iPhone or iPod Touch.”

Joann Pan at Mashable notes the implications such integrated technology could have on retail shopping for consumers and merchants alike. She writes:

“With Apple’s proposed ‘integrated coupon storage,’ patrons will be able to walk into stores and receive notifications about items for which they have coupons. After the transaction is complete, the customer will receive a digital receipt wirelessly. Alerts will also be pushed for coupons with impending expiration dates. The patent also mentions a verification system for coupons and discounts.”

Holiday mobile commerce records are tip of the iceberg

Though the record-setting holiday season is behind us, this is no time for retailers to rest on their respective mobile commerce laurels, says Mobile Marketing Association’s Jack Philbin in a post at Fast Company. Philbin argues that this holiday season was just the “tip of the iceberg of what is sure to become a mobile-dominated shopping experience during the next few years” and that retailers need to think mobile 365 days of the year from here on out.

Philbin offers retailers several “actionable steps,” including expanding the holiday mobile strategy into a year-long strategy with the holiday season as one aspect, and integrating traditional marketing plans into mobile plans, creating one overall strategy. “The lines are blurring between marketing channels,” Philbin writes, “and now more than ever, retailers need to think about how to execute a seamless brand experience — integrating all of consumers’ favorite platforms and channels.”

It’s also time for retailers to “embrace mobile as the shopping companion,” Philbin says — and recent study results indicate he might be right. In separate posts at Internet Retailer (here and here), Bill Siwicki, managing editor at Mobile Commerce, took a look at a two such studies that show consumers are becoming comfortable with their smartphones and are yearning for more shopping integration.

The first, a study of smartphone owners conducted by ad agency Moosylvania, showed that 80% of respondents “want more mobile-optimized product information while they’re shopping in stores.” Researchers also found that 30.1% of respondents research products when away from home, and 12.4% of those do so in stores. They also found that 76% of respondents are comfortable with mobile coupons and that 44% would welcome mobile wallet capabilities. Siwicki also looked at a survey conducted by Perception Research Services International that showed 76% of respondents who own a smartphone use it while shopping; of those, 53% compare prices, 49% read customer reviews, and 48% hunt for coupons or sales.

Mobile wallets: now or never?

Michael Brush at MSN Money took a look at the mobile wallet battle and says if you don’t already have a mobile wallet, you probably will by the end of 2013 — and maybe more than one. Brush looks at the battleground from both consumer and investor perspectives, noting that for consumers, it will change how — and how much — they spend; for investors, the battle is “worth studying because there will be major winners and losers.” LevelUp CEO Seth Priebatsch told Brush, “I think 2013 is going to be the year where mobile payments will happen and there will be a winner, or mobile payments won’t ever happen at all.”

The battle boils down to two goals from the vendor/retailer perspective, says Brush: improved marketing efforts and potential savings in credit card fees. On the marketing front, the “Big Brother-ish” nature of the data collection efforts will likely force providers to tread lightly, Brush notes, but consumers stand to benefit big as wallet competitors fight for adoption. Industry analyst Aaron McPherson told Brush the mobile wallet battle “will be a bloodbath in 2013.”

Brush also outlines each of the current key players, who they are and how they measure up — you can read his full report here.

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December 20 2012

Commerce Weekly: Predicting 2013

Here are a few stories that caught my attention in the commerce space this week.

Predicting the 2013 commerce space

As 2012 wraps up, industry executives are looking ahead to what 2013 might bring. In a report at eCommerceBytes, executives at e-commerce and Internet service company Rakuten pulled together five trends to watch in 2013, including increased use of video on e-commerce sites; a market shift toward specialized retailers, both brick-and-mortar and online; and the advent of curated commerce, or “shopping for a lifestyle” as opposed to shopping for individual items.

Executives also highlighted mobile integrations, noting that they expect an increase in in-store integration via apps, QR codes and augmented reality. Predicted trends also included a change in the way consumers pay: “Services like PayPal and Apple’s iTunes have already begun to centralize payments on mobile, but the next step will be services such as Square that offer sellers the ability to receive card payments with their existing smartphone and a simple plug-in device,” the report says.

PayPal president David Marcus also took a look ahead. He sees cash registers going mobile, with customers able to pay from the store aisle or even the changing room, and predicts location-aware and context-relevent shopping and payments will be more disruptive than many now expect. In the payment space, he sees mobile wallets, consumer loyalty programs and coupon platforms merging into one efficient and convenient business. He also predicts NFC will die a slow death in 2013: “it’s not solving a real consumer problem,” he writes at the PayPal blog, “and it’s not providing additional value to encourage me (or anyone else, for that matter) to change my behavior.”

In related news, Square COO Keith Rabois pulled together some predictions for what consumers and retailers can expect from Square in 2013. In an interview with CNET’s Daniel Terdiman, Rabois said Starbucks’ customers haven’t seen anything yet, that they can “expect full Square Wallet functionality” in 2013 as well as new features and “major enhancements” — Rabois said Square’s partnership with Starbucks is in its “first inning.”

Rabois noted, however, that Square is just the beginning, that “anything new that’s developed in the coming months will also be rolled out for use at every single merchant that’s part of the Square Wallet program” and that additional retail partnership announcements can be expected in the coming year. Looking further ahead? “Rabois said that the company envisions Square Wallet working ‘everywhere,’” Terdiman reports, “from personal trainers to interactions between friends to contractors working people’s homes.”

Apple users dominate Android’s on the mobile shopping front

Bill Siwicki, managing editor at Mobile Commerce, tallied up the mobile shopping habits of Apple versus Android users and concluded that Apple users are more valuable “by a mile.”

Looking at data from a few retailers as examples, Siwicki reports that at e.l.f. cosmetics, “78.59% of mobile sales stemmed from an iOS device while only 20.74% came from an Android device” from Oct. 1 through Dec. 16. Of those sales, the iPhone accounted for 27.48% and the closest Android smartphone competitor chalked up a mere 0.78% of mobile sales. At web-only jeweler Ice, 22.5% of traffic is mobile and more than 70% of that is via an Apple device, and at Wine.com, more than 90% of mobile sales come from Apple devices, Siwicki reports.

Siwicki points out that when looking at these numbers, it’s important to note that Android’s market share far outpaces Apple’s in smartphones — 52.5% and 34.3% respectively, according to research firm eMarketer Inc. — and that Apple’s iPad owns 76.4% of the tablet market.

Shedding some light on the situation, Kevin Edwards, strategy director at Affiliate Window, noted to Siwicki that “Apple users are typical early adopters,” and that “[t]hey’re generally tech-savvy individuals who embrace new ways of interacting and transacting online.” HauteLook CMO Greg Bettinelli told Siwicki that of their mobile transactions, tablets trump iPhones by 50%. “If we make $2 for every person on an iPhone,” he said, “we make $2.50 for desktop users and $3 for iPad shoppers.”

You can read Siwicki’s full report here.

What mobile payment platforms can learn from the barcode

In the wake of barcode creator Norman Joseph Woodland’s death last week, Drake Bennett and Jim Aley put together a piece on the history of the barcode and how it has become “so prevalent that it is almost invisible.” Bennett and Aley note that at its inception, the barcode had its competitors, and that there’s a lesson to be gleaned from the barcode’s ultimate success — especially for mobile payments.

Bennett and Aley boil the success down to three overarching “essential ingredients”: the technology must be simple and its benefits must be obvious, there needs to be a governing body to keep everyone in line, and there must be “[a]n extravagant, surprising, and often expensive effort to ‘seed the market.’”

As for current mobile payment platforms that are measuring up, Bennett and Aley say Square is “one of the more interesting” and break down its performance against the “essential ingredients”:

“Simplicity? Check: It’s a small plastic square that plugs into an iPhone or iPad. A splashy move to dominate the market? Last month Square announced a deal to be in 7,000 Starbucks (SBUX) across the U.S. Strong consortium or governing body? A tangle of competing alliances is more like it. Two out of three, so far, for Square.”

Commerce Weekly will return January 3, 2013 — have a safe and happy holiday!

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December 13 2012

Commerce Weekly: Gift cards get Square

Here are a few stories that caught my attention in the commerce space this week.

Give a gift through Square

Mobile payment company Square got into the gift card business this week, launching a gift card service tied to its Square Wallet. Christina Chaey reports at Fast Company that Square Wallet users can buy gift cards in amounts from $10 to $1,000 from any of the 200,000-plus businesses that process payments with Square and give them to anyone — recipients do not need to be Square users.

Once a gift card is purchased, it is sent to a recipient’s email inbox. From there, the gift card can be redeemed in a number of ways: for Square users, the card will automatically appear in their Square Wallet; iO6 users can save the card to their Passbook; and for those who don’t use either Square or Passbook, a QR code can be printed out for a merchant to scan.

Given its recent partnership with Starbucks that catapulted Square into the mobile payment mainstream and its international expansion into Canada, gift cards might seem a bit of a departure from the platform’s mobile payment focus. Square CEO Jack Dorsey explained the move in an interview with The Wall Street Journal’s Matthew Lynley. Not only is Square aiming to make the gift card experience cheaper for merchants — Dorsey explained that traditional gift cards can cost merchants 10% to 15% to issue, where Square will charge only the 2.75% they do for credit cards — but it’s also using the cards as a discovery tool and to streamline the experience for consumers. Dorsey said to Lynley:

“The biggest problem merchants have is being remembered and being discovered, so it’s another tool for discovery. If I really like a place and I’m a good friend of yours, I can tell you, but if I give you a gift card, you’re really going to try it out. … It also starts getting into a concept of more remote commerce. People from their couch can send these experiences, can send these gifts, and they don’t need to pick out different things.”

You can read Lynley’s full interview with Dorsey here.

Mobile payments gets a new white label tool

Several members from the team that developed the very successful Starbuck’s mobile payment app have launched a new white label mobile payments tool called Cardfree, Ryan Kim reports this week at GigaOm.

The company, which is launching with $10 million in Series A funding, is looking to help businesses develop or expand their mobile payments and mobile platform strategies. Kim writes that the company’s payment component works with 90% of existing POS systems. Merchants can create digital pre-paid cards or mobile payments, and payments can be processed via barcode scanning, via the cloud, or (in the future) via NFC, Kim reports.

Cardfree CEO Jon Squire told Kim that the company stands out from its competition not only in its team’s depth of experience, but in that they’re not looking to use the merchants as means to another end. Kim reports:

“Squire also believes that merchants are wary of working with some third-party wallet services [that] want to share data and also build up awareness for their own brand instead of the merchant. With Cardfree, merchants can work with the tools they have in place and be assured they will control the experience and branding, Squire said.”

Smartphone-based commerce gets a personal assistant

Maluuba, Android’s personal assistant answer to Apple’s Siri, got an upgrade this week that could bring a whole new dimension to retail shopping. Ryan Kim reports at GigaOm that users now can shop with their phones by telling Maluuba what they want.

When a user makes a shopping-related request, Kim reports, Maluuba pulls data from Google, Best Buy and Wal-Mart, and shows results from local retailers as well — and results aren’t limited to online shopping; Maluuba also will return results for local stores that have the item in question in stock. Google’s results are displayed first, with tabs to Best Buy and Wal-Mart results.

Once you find an item to buy, you click through to an external check-out process, which Ryan reports is a bit slow and clunky, but he notes that the streamlined search experience Maluuba provides might balance that out and “help spur on more smartphone-based commerce.” After testing, Kim says deeper ecommerce integrations are needed, but that Maluuba is “off to a good start.”

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December 06 2012

Commerce Weekly: Same-day delivery war heats up

Here are a few stories that caught my attention in the commerce space this week.

The high price of instant gratification

The Wall Street Journal’s Greg Bensinger took a look this week at the e-commerce same-day delivery trend, a service eBay, Wal-Mart and Google have been experimenting with in order to better compete with Amazon, which has offered same-day service in select locations since 2009.

The obvious benefit for e-commerce retailers is being able to improve the customer experience — providing the convenience of online shopping with the instant gratification of brick-and-mortar shopping. The biggest obstacle is cost. EBay, for example, has hired couriers, paying $12.50 per hour and 55 cents per mile, Bensinger reports, but only charges $5 to deliver a minimum $25 order. Industry analyst Kerry Rice told Bensinger, “Retailers are clearly subsidizing this service to improve the customer experience. Amazon created this monster and everyone has had to jump on board to compete.”

Amazon operating at a loss to draw consumers into its ecosystem is pretty par for its business model, and its deep pockets mean companies are going to have to get creative to successfully compete. Wal-Mart is perhaps in the best position not only to compete with Amazon on this front, but perhaps even overtake and lead the same-day delivery field. Walmart.com chief executive Joel Anderson highlighted for Bensinger Wal-Mart’s advantage: “We have 4,000 Wal-Mart stores and local goods within five miles of most customers.” Each store basically serves as an online distribution center, a scale that Amazon could be challenged to meet, even taking into account its aggressive distribution center expansion plans.

In related news, Google reportedly shelled out more than $17 million to buy Canadian locker storage startup BufferBox this week. As many outlets reported, Google may be positioning itself to compete against Amazon’s Locker delivery service, which allows customers to have goods delivered to secure pick-up stations rather than home addresses.

NFC payment innovation charges ahead, despite obstacles

Despite recent research indicating Apple’s decision to exclude NFC technology from the iPhone 5 has set the NFC payments market back by two years, NFC payment innovation continues. This week, mobile wallet platform Isis teamed up with USA Technologies (USAT) to bring mobile payment technology to vending machines in Salt Lake City and Austin, Texas.

Nick Summers reports at The Next Web the technology will be installed in 7,500 machines that “will accept credit using USAT’s ePort Connect service, which already supports NFC-enabled devices, as well as payments from PayPal and Google Wallet.” As Summers notes, however, the Isis Mobile Wallet app is available only for Android platforms at the moment.

In other NFC news, The Next Web’s Jon Russell reports that digital security company Gemalto announced major partners this week for its UpTeq NFC payment system for mobile SIM cards: American Express, MasterCard and Visa. Russell writes that the payment system uses NFC technology already present in mobile SIM cards, so customers won’t need to worry about external hardware or plug-ins to make payments, redeem coupons, or participate in loyalty programs. The technology is being customized for KDDI in Japan, Rogers in Canada, and Orange in France, according to Russell’s report.

Google aims to be information destination for holiday shoppers

AdAge’s Natalie Zmuda took a look this week at Google’s various holiday retail strategies and how its angling to “become shoppers’ information destination.” Zmuda highlights several newly launched tools that aim to service emerging consumer shopping behaviors that merge online and offline environments. Tools include its 3-D holiday toy collection, indoor maps for select malls and retailers, and its new Shortlists tool. Zmuda notes that “[by] consolidating all of the tools a shopper might want to use in one place, Google is cultivating loyalty and, ultimately, increasing activity into its paid product listing ads.”

Google Shopping VP Sameer Samat told Zmuda that Google’s vision focuses on the big picture: “If we’re helping consumers be more effective in shopping and more activities, they will find Google more relevant and valuable as a company. That’s a good thing for Google, long term.”

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November 29 2012

Commerce Weekly: Holiday cyber spending breaks records

Here are a few stories that caught my attention in the commerce space this week.

Holiday weekend sees huge increases in online and mobile spending

The big news this week is the cyber spending that happened over the holiday weekend. Starting with Thanksgiving Day, online shoppers found time between football downs, turkey, stuffing, and pie to spend $633 million at online retailers, according to Internet analytics company comScore — a 32% increase over 2011. Black Friday, too, saw a sizeable increase in cyber shopping with $1.042 billion in online sales — 26% over 2011 and the heaviest online spending day for 2012, at that point. Cyber Monday stole the show, though, with consumer online spending ringing in at $1.46 billion, making it the biggest online spending day in U.S. history, according to comScore.

IBM Cyber Monday ReportIBM Cyber Monday Report
From IBM’s Cyber Monday Report — click here for the full report (PDF).

More holiday spending than ever occurred via mobile devices as well. Sarah Perez reports at TechCrunch that a report from mobile commerce startup Branding Brand showed a 221% increase year-over-year in smartphone spending (not including sales via tablets) on Thanksgiving and a year-over-year increase of 128% on Black Friday. According to IBM’s Holiday Benchmark data, mobile purchases as a whole exceeded 16% on Black Friday, up from 9.8% in 2011. And according to IBM’s Cyber Monday Report (PDF), more than 18% of consumers visited retail sites via mobile devices on Cyber Monday, a more than 70% increase over 2011, and mobile sales approached 13% — a year-over-year increase of more than 96%. Of these mobile shoppers, 58.1% used smartphones, compared to 41.9% who shopped via tablet, according to the report.

Luke Wroblewski has additional holiday mobile shopping highlights from Thanksgiving Day and Black Friday in his Data Monday blog. A few tidbits include:

  • PayPal saw a 164% increase in the number of its mobile global customers on Thanksgiving Day — 2.5 times the mobile payment volume it booked on Thanksgiving Day 2011.
  • Mobile traffic on Black Friday has grown from less than 1% in 2009 to 24% in 2012.
  • Black Friday online shopping via mobile devices was led by the iPad at 10%, the iPhone at 8.7%, and Android devices at 5.5%

Put away that wallet — pay with your fingertip

Forget pulling out your wallet for a credit card or your mobile wallet to pay with an app — Discover wants to simplify the entire payment process and enable you to pay with your fingerprint. Becky Yerak reports at the Chicago Tribune that the credit card company plans to begin a pilot program to allow 300 to 350 of its employees to pay for lunch in the headquarters’ cafeteria via fingerprint payment. The system isn’t completely equipment-free for the consumer, however. Yerak reports:

“Each [participating] employee will also receive a key fob with a chip that includes information about their individual credit-card account as well as their fingerprint. To complete a purchase, the user will place his or her finger on a fingerprint reader near checkout, with the key fob kept nearby, such as in a pocket or purse, for the transaction to go through.”

James F. Thompson notes at PRNewser that the public may be wary of connecting such a personal part of themselves to payments, but he says the public eventually will come around if Discover drives home the superior level of purchasing security the new technology will provide — after all, the actual human purchaser, not just a credit card, must be present to complete the transaction. This could spiral into a whole new dimension of crime beyond purse snatching and pickpocketing, but the potential is there to revolutionize payments beyond anything mobile wallets have been able to achieve thus far.

The store mannequins really are looking at you

One could argue that mannequins are inherently creepy, but Italian manufacturer Almax has taken the creepy factor to a whole new level. Liat Clark reports at Wired UK that the company is fitting mannequins with facial recognition software, allowing merchants to track their customers’ ages, sex and race. CEO Max Catanese explained to Clark how the EyeSee mannequin works:

“It’s a system that’s able to give demographics about the person passing in front of it. It’s based on an algorithm. The algorithm analysed three million faces before going to production and now the number, as well as the accuracy, is rising. Once [companies] read the data, they can implement strategies inside the stores to boost sales.”

According to Clark’s report, the mannequins already are in place in the stores of five global brands in Europe, the U.S. and Canada. Though merchants are finding the additional shopper data useful in arranging and staffing their stores, the technology raises the obvious question of privacy. Data protection and privacy law specialist Stewart Room told Clark “[t]he capturing and processing of images of people is right in the middle of the Data Protection Act” and that, at least in Europe, this type of marketing profiling will need to be consent-based.

Catanese argues that there are no real privacy concerns, noting that the stores have security cameras recording customers anyway and explaining that the mannequins don’t record or store images. Still, it will be interesting to see how this sort of data gathering and profiling will play out with consumers and lawmakers. After all, as Clark points out, the Irish Data Protection Commission forced Facebook to remove its facial recognition tagging system in European markets after an Austrian law student complained.

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November 15 2012

Commerce Weekly: As Square heats up, so too does its competition

Here are a few stories that caught my attention in the commerce space this week.

Square aims high, BofA enters mobile payment arena

Square’s partnership with Starbucks launched this month, catapulting the payment startup into a new tier of competition. Gerry Shih at Reuters writes that Square now is looking at processing $10 billion in payments per year and “has attracted a furious response from established or deep-pocketed rivals who are determined to crush the San Francisco-based upstart.” Rivals include PayPal, Groupon and Intuit, among many others.

Shih says Square needs to prove it can compete on this new level, moving beyond food trucks and taxis and into large retailers and big-box chains.

Square’s COO Keith Rabois told Shih that Square eventually plans to process payments for every business in the U.S. and argues that though it won’t happen today, the company is in a good position to make that a reality. Shih reports:

“Because Square acts like an aggregator for its thousands of merchants, Rabois added, Square will be able to negotiate better rates with banks and credit card companies and improve its margins. Square’s daily transaction volume already makes it the equivalent of the 20th largest retailer in the United States, larger than, say, Trader Joe’s or the Gap.”

Square’s competition heated up yet again this week as well, as Bank of America launched Mobile Pay on Demand, which will allow merchants to process payments on iPhones, iPads or Android devices. Tricia Duryee reports at All Things Digital that BofA’s service fees will run 2.7% per transaction (compared to Square’s 2.75%) and that the service will launch at the beginning of December.

In what may be a sign that competition in this space is only going to increase, Trevor Rubel, EVP of strategy and emerging products for Bank of America Merchant Services, told Duryee, “I hate to come out with a commodity product, but every bank should have one.”

Visa’s V.me exits beta

Another mobile wallet/payment service entered the payment fray this week — Visa brought its V.me service out of beta and officially announced signed partners. Tricia Duryee at All Things Digital reports that at launch, 23 retailers and 50 financial institutions are on board, noting consumers can sign up for the service regardless of whether or not their bank is participating.

Sarah Perez at TechCrunch reports that the wallet platform is designed for online and mobile commerce, but it may extend beyond cyberspace:

“‘In early 2013 — not necessarily in the U.S. — you’ll see physical implementations of V.me,’ says [Jennifer Schulz, Visa's global head of ecommerce], explaining that mobile has enabled new ways to shop beyond online checkout, but may also include things like mobile shopping combined with in-store pickup, for example. V.me’s mobile payments mechanism can take advantage of NFC, more popular overseas than here, but it can also support QR codes, barcode scanning or other methods.”

Schultz also told Perez that though the initial rollout in the U.S. will focus on the service’s online application, the service will rollout internationally and on point-of-sale terminals starting in early 2013.

Plastic may facilitate transition to mobile payments

Ryan Kim over at GigaOm took a look this week at the mobile payment space and concluded that plastic cards — the very objects mobile payments are hoping to replace — aren’t going anywhere anytime soon. In fact, not only are the cards not being relegated to the sidelines, he writes, mobile payment companies are starting to incorporate traditional plastic into their payment platforms.

Kim looks at PayPal’s announced partnership with Discover and a rumored similar partnership with Google to create a Google Wallet card. He notes that the cards are offering more functions and services than credit and debit cards do now, but that the real benefit to incorporating the cards is that they can serve as a bridge while the fragmented mobile payment ecosystem matures. Kim writes:

“With so many systems available, but all with limited reach, there’s no tool available currently that promises ubiquitous acceptance. Increasingly, competitors are realizing that a payment system that works everywhere, not just for early adopters but for mainstream consumers, has the inside track on in-store payments.”

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November 01 2012

Commerce Weekly: Mobile wallets and NFC get a global partnership platform

Here are a few stories that caught my attention in the commerce space this week.

Vodafone partners up to launch a new mobile wallet platform

Yet another mobile wallet is gearing up to hit the market in 2013. Vodafone announced a partnership with m-commerce company CorFire and digital security company Gemalto to launch the platform in the first quarter of 2013 in Germany and Spain with plans to expand across Europe, according to a report at Bloomberg.

Natasha Lomas at TechCrunch reports that the initial rollout will focus on NFC-equipped Android devices and that the services “will be compatible with the standards chosen by Weve” (formerly known as Project Oscar). According to Lomas, Dr. Jae Chung, CorFire’s president and CEO, noted the platform’s potential in a released statement: “Vodafone’s customer base spans across more than 30 countries, which means our partnership may become one of the biggest, global implementations of NFC and mobile commerce.”

James Wester at Mobile Payments Today reports that Vodafone’s plan for its more than 400 million subscribers around the globe goes beyond the mobile wallet — plans include developing the platform so that third-party service providers can access the subscriber base.

Cashing in on why we buy

Mick Weinstein at PandoDaily took a look this week at a Tel Aviv startup called Commerce Sciences that is looking to cash in on behavioral economics, the science behind people’s shopping behaviors. The company wants to create interfaces for small- to mid-sized companies that provide insights from behavioral economics, predictive analytics and big data analytics to help them better connect with their customers, and in turn convert more sales.

The company already has launched its first product, Weinstein reports. The Personal Bar “is a free, self-service toolbar that sits on an ecommerce site’s footer and pops up coupons, a chat box, and other messages,” he writes. And he notes the first insights into consumer behavior already are emerging:

“… the bar already includes an Ariellian [ref: Dan Ariely] behavioral econ lesson: They’ve found that a little coupon graphic that a customer ‘tears off’ from the toolbar converts far better than a discount code that you need to Control-V at checkout.”

The bar isn’t the endgame, though — it’s a way to start relationships with merchants and collect data, Weinstein reports. He says company founders Aviv Revach and Eyal Brosh are more interested in creating “the brains behind optimizing the online buying experience.” He reports:

“‘This market lacks an entity that sees and analyzes all of the massive activity across thousands of ecommerce sites,’ Revach says. ‘We can integrate all that data and help merchants react to the changes and particularities of customer behavior. The bar is just the beginning — eventually we’ll integrate with the main elements of sites.’”

The timing for such a company to get off the ground may be approaching the tipping point — analysts predict ecommerce and m-commerce to boom in the next few years across the globe, and retailers will be looking for innovative ways to capture consumer attention.

NFC for the iPhone?

All the buzz leading up to the iPhone 5 release on whether or not Apple would bring NFC to the masses ended (for many) in a collective sigh when the phone launched without the anticipated technology. But iPhone fans who long for NFC capabilities might not have to wait for yet another version release of the phone — tech company Flomio has launched a Kickstarter campaign for FloJack, a pocket-sized NFC plug-in device for the iPhone, iPod Touch and iPad.

The campaign is set to run through November 26 and needs to meet or exceed a goal of $80,000. As of this writing, the campaign had raised $14,238. You can check it out here.

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October 25 2012

Commerce Weekly: Square’s big moves

Here are a few stories that caught my attention in the commerce space this week.

Square gets international, plans major growth; PayPal Here hits retail

Square made a couple of big move announcements this week. First, the company literally will move to a new office space in the Central Market area of San Francisco by mid-2013, according to a report by Leena Rao at TechCrunch. Rao notes that the company has grown to more than 400 employees and reports Square plans to expand its staff to almost 1,000 people before the end of 2013.

Square also announced this week that its service is now available in Canada, at the same 2.75% rate it charges in the U.S., according to a report by Ingrid Lunden at TechCrunch. Lunden reports one of the obstacles for Square in Canadian as well as European markets is that its dongle depends on the magnetic stripe on the backs of credit cards; many credit card processes in these markets use a chip-and-pin system instead.

The obstacle isn’t insurmountable, however, as Lunden notes, Square’s partnership with Starbucks to incorporate its Pay With Square app service as a mode of payment might pave the way forward with retailers in other markets, making the card processing format irrelevant.

Square competitor PayPal Here was on the move this week as well — into retail shopping. Rao reports in a separate post at TechCrunch that PayPal CEO John Donahoe announced a U.S. retail deal with AT&T during eBay’s earning call this week. PayPal Here previously had a retail presence only in Japan with Softbank. Rao reports that Here will retail for $15, with the purchaser receiving a $15 discount upon signing up; Square is sold in 20,000 outlets in the U.S. and sells for $10, with a $10 purchaser sign-up discount, Rao reports.

Let the mobile payment testing begin

The long-awaited Isis mobile wallet began testing this week in Austin and Salt Lake City markets. Stephanie Mlot reports at PC Magazine that compatible phones at launch include Samsung Galaxy S III, Galaxy S Relay 4G, and Galaxy S II on T-Mobile; the HTC Droid Incredible 4G LTE on Verizon, with Motorola Droid Razr HD and Droid Razr Maxx HD support coming yet this week; and the Samsung Galaxy S III, the HTC One X, the Samsung Exhilarate, the LG Escape, and the Samsung Galaxy Rugby Pro on AT&T.

Mlot also reports that T-Mobile customers can get $10 in Isis eCash if they visit a brick-and-mortar location and activate the application. At launch, Isis works with Chase, Capitol One, Barclaycard, American Express, Visa, Mastercard and Discover credit cards.

As to Isis’ success, a report at Consumer Reports says services like Isis are solving “a non-existent problem” and concludes: “Isis, like Google Wallet, still seems to require a lot of work and needless complexity for the questionable convenience of paying by cell phone.”

Apple also announced this week that it too soon would be testing a mobile payment solution in a limited market — its own retail stores. Mark Gurman reports at 9to5Mac that Apple is preparing to update its point of sale system to scan Apple Store payment card codes through Passbook. The payment system update could be ready as early as the end of this month. Jordan Golson writes at MacRumors that though it’s not confirmed, it’s possible in-store customers also will be able to pay for any merchandise using their iTunes account information; thus far, only select accessories have been available for purchase through Apple’s EasyPay self-checkout system.

Google Wallet on the iPhone?

Business Insider’s Owen Thomas was paying close attention this week, noting the “The next version of Google Wallet, coming soon” statement at the top of Google’s Wallet homepage, with an option for visitors to request an invite. Thomas reports that when he requested the invite, he was prompted to select the type of device he uses: iPhone, Android, or “other.”

Ryan Kim at GigaOm agrees with Thomas’ assertion that this likely suggests Google is looking to expand its purview beyond Android phones and into iPhones and “others,” but notes it really could mean anything. Kim writes:

“It could mean that Google may be pursuing a more cloud-based approach to payments that doesn’t require NFC for transactions. Or Google Wallet could integrate with Apple’s Passbook or evolve to support QR codes or 2D barcodes, which is how Starbucks and Dunkin Donuts handle mobile payments. Or it could just mean Google wants to know how many iPhone users are interested in Google Wallet.”

You can sign up for an invite here.

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