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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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September 27 2012

Commerce Weekly: An early look at who’s who in Passbook

Here are the commerce stories that caught my attention this week.

Passbook’s early merchants

Apple’s iOS 6 launched last week, bringing the Passbook feature to iPhones, and merchants from all walks of industry have started jumping on board. Target was among the first to push its app update, and Sarah Perez at TechCrunch argues it will be one of the most influential merchants in making mobile wallets mainstream. Perez notes the practical nature of Target’s app, as it focuses on saving and storing mobile coupons. Mobile coupons are nothing new, of course, but Perez argues, “becoming part of a more comprehensive system — one that even pushes you reminder notifications as you walk into a store — it has the potential to actually change user behavior” (e.g. make consumers more comfortable and intimate with their phones as part of the shopping experience).

Perez also looks at startup gift card company Gyft’s new Passbook integration in a separate post. The company sells cards from more than 200 retailers, and for those with which it has a relationship, the app will allow users to check gift card balances, too. The integration also is on a per-card basis, so each card must be transferred into Gyft individually, but Perez says it’s worth the trouble: “instead of having a generic ‘Gyft’ card stored in the Passbook app, you’ll have what appears to be the individual store gift cards there, powered by Gyft.” Perez also looks at a few other startups that were agile enough to jump on board early, ahead of many major brands, including Belly and SnipSnap.

One of the more surprising of the major brands to be slow off the mark is Starbucks. Alex Heath at Cult of Mac reports that the Starbucks app will be updated by the end of the month and points out why it’s such a surprise the coffee mogul is late to the game. Not only is Starbucks mobile savvy with its Square payment integration, but “Apple originally routed Passbook in the iOS 6 developer betas to the Starbucks app in the App Store,” Heath writes.

A few of the other major brands already on board with Passbook include Walgreens, Ticketmaster, Fandango, Sephora and several Major League Baseball teams. To give Passbook a whirl in the real world, Josh Lowensohn at CNET took it to a Major League game. He writes that he was able to get into the game by having his ticket scanned off his phone but that the experience wasn’t completely paperless: “In order to give Passbook users some sort of proof of purchase, the stadium prints out a paper receipt that you need to hold on to. … The stadium also requires those with higher level tickets, to somewhere like the suite levels, to carry an extra paper ticket.”

A little rough, but it’s a start. If you want to peruse all Passbook-updated apps, AppShopper has a running list.

X.commerce harnesses the technologies of eBay, PayPal and Magento to create the first end-to-end multi-channel commerce technology platform. Our vision is to enable merchants of every size, service providers and developers to thrive in a marketplace where in-store, online, mobile and social selling are all mission critical to business success. Learn more at x.com.

The chaos in the payment space

Carol Coye Benson took a thorough look at the state of the payment industry over at Payments Views this week. She describes the landscape as being in chaos:

“When we look at the payments industry today, we see a rapidly fragmenting world, with multiple models, many using various decoupled or layered approaches, with many new solutions for both consumers and merchants. Choice and innovation, of course, may bring potential benefits, but will create equally obvious challenges — including a more confusing environment, for consumers and merchants alike. Regulators, too, will find this a more difficult environment to manage, as will investors, given that many of the new solutions do not have clear or established business models.”

Benson delves deep into each area, looking at the various fronts: wallets versus cards, merchants versus payments industry incumbents, secure element (SE) data storage versus cloud, etc. She also stresses that mobile commerce encompasses far more than mobile payments, including online ordering, self-checkout, mobile ticketing and mobile-enabled digital content purchases. You can read Benson’s complete analysis here.

For a hands-on look specifically at the state of mobile payments, CNN reporter Laurie Segall spent a day shopping in New York City sans physical wallet, using only her smartphone to pay. Throughout the day, she visits a variety of merchants and tests Google Wallet, LevelUp, Square and PayPal. You can see how each works out in the following video:

Studies show importance of the mobile shopping experience

A report released by NetSuite, Inc., this week spells out some good news for mobile payments on UK’s high streets. A press release at CNN Money highlights a few key findings from the report:

  • 67% of high street retailers already offer a mobile app, and that percentage jumps to 80% when you include retailers planning to launch a mobile app in the coming year.
  • Retailers expect mobile commerce to grow at a rate of 23%, an increase of £11bn in 2012.
  • 38% of retailers report their biggest challenge is integration with other ecommerce systems, 37% report budget as the problem, and 15% say they just don’t know how best to create a compelling experience.

A new study released by Google this month stresses the importance not only of having a mobile site or app, but of offering a mobile-friendly experience. A few highlights from the study include:

  • 61% of consumers say they’ll leave a site and move on to a competitor if they can’t easily and quickly find what they’re looking for.
  • 74% are more likely to become return customers if a site is mobile-friendly.
  • 67% say they’re more likely to buy a product or service from a mobile-friendly site.

You can download the NetSuite report here and the Google Study report here.

Tip us off

News tips and suggestions are always welcome, so please send them along.

Commerce Weekly is produced as part of a partnership between O’Reilly and PayPal.

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