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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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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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October 18 2012

Commerce Weekly: Targeting Amazon

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

Strategic maneuvers aimed at Amazon

Best Buy LogoBest Buy LogoRetail competition against Amazon is starting to heat up coming into the holiday shopping season. On the heels of Wal-Mart’s recent moves to square off against Amazon, two other big box brick-and-mortar retailers have announced strategies targeting the Internet retail giant.

Ann Zimmerman reports at The Wall Street Journal that Best Buy not only will price match with Amazon this holiday season, but will also offer free delivery for products that are out of stock. Target has its sights set against Amazon as well. In a report on Target’s planned holiday strategy, Natalie Zmuda at AgeAge notes that tactics include “a price-match guarantee against a group of competitors that includes popular online retailers such as Amazon.” Target also is using QR codes in its holiday campaign to combat “showrooming” on the top 20 selling toys.

In somewhat related news, the US Post Office also is making moves into the e-commerce market. Victoria Stilwell reports at Bloomberg that starting in November, the US Post Office will begin testing its same-day delivery program, called Metro Post, in the San Francisco market. The service is aimed at local physical retailers, which could in turn give them a leg up against Internet retailers like Amazon. Stilwell reports that to participate in the Metro Post test, retailers need 10 or more physical locations throughout the US, with one or more within the test market boundaries.

Square exits taxis

New York City’s Taxi & Limousine Commission (TLC) spokesman Allan Fromberg this week unequivocally dismissed rumors from last week that Square was negotiating an official partnership with TLC, alongside news that Square has ended its pilot payment program with the TLC.

Garett Sloane at The New York Post reports that a letter (PDF) sent by Square’s general counsel Dana Wagner to the TLC on Friday “indicated that [Square] needed to overhaul its payment system in light of new rules the commission is drafting to govern credit-card payments in cabs.” Wagner writes in the letter:

“Square has determined, in light of developments in prospective taxicab regulations in New York and other markets, and based on what we have learned conducting the Pilot Program to date, that we wish to pursue a different hardware and software solution for our TPEP [taxicab passenger enhancement project] offering. It would be commercially unreasonable for Square to pursue a new hardware and software solution for a future TPEP offering while at the same time continue to support the software and hardware solution we rolled out in the Pilot Program.”

Ryan Kim at GigaOm says it’s likely that Square will continue working on a taxi-payment product, quoting Wagner’s letter: “… Square looks forward to further improving our product and making commerce and transportation easier for millions of riders and drives in New York and around the country.”

In other Square news, company CEO Jack Dorsey announced that Square would no longer refer to its customers as “users” and appealed to others in the technology industry to follow suit. He writes in a blog post: “The word customer, given its history, immediately sets a high bar on the level of service we must provide, or risk losing their attention or business.” His post includes a letter he sent to his team that explained: “We don’t have users, we have customers we earn. They deserve our utmost respect, focus, and service.”

Isis is gearing up for launch

Google Wallet competitor Isis is finally gearing up to launch its wallet, after a series of delays this summer. The company confirmed it would officially launch in the Austin, Texas and Salt Lake City, Utah markets October 22.

Nathan Olivarez-Giles reports at Wired that the Isis mobile app has shown up in Google Play, but notes that the Wired team had yet to find a compatible phone. Isis head of marketing Jaymee Johnson told Olivarez-Giles, “By year end, as many as 20 Isis-ready handsets are expected to be in market …We look forward to sharing more details on Oct. 22.” Those details likely will include partnering retailers as well. Isis announced partners in May, but as Olivarez-Giles notes, it’s not yet clear which ones will be part of the initial launch.

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September 13 2012

Commerce Weekly: Apple excludes NFC, leaves payment pioneering to others

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

So that’s that: No NFC for the iPhone 5

Leading up to yesterday’s Apple event, there was much rumor mongering over whether or not the iPhone 5 would include NFC technology. The rumors have now been resolved: Apple did not include NFC in the iPhone 5. All Things Digital’s Ina Fried talked with Apple’s Phil Schiller about the lacking technology:

“Apple Senior VP Phil Schiller said that Passbook alone does what most customers want and works without existing merchant payment systems. It’s not clear that NFC is the solution to any current problem, Schiller said. ‘Passbook does the kinds of things customers need today’.”

Schiller’s sentiments echoed those made by Square COO Keith Rabois last year, that NFC is “a technology in search of a value proposition.” Cotton Delo at AdAge reported on Apple’s decision to forego NFC and side step the mobile wallet arena and noted that it’s not likely to have any ill effects on the mobile shopping ecosystem, as there is plenty of competition in the space to advance mobile wallet technology.

All the same, advancement in technology doesn’t necessarily translate into ubiquitous adoption, and the decision not to include the technology could have ramifications beyond mobile payments. Ryan Kim at GigaOm argues that Apple’s “snub” was a big detriment for NFC, that including it on “the most popular phone” would have educated consumers and brought a level of validation the technology hasn’t yet experienced. Kim also highlights the bigger issue:

“NFC is much more than just payments and can facilitate personal media and information sharing, building access, marketing and easy Bluetooth pairing. Google, BlackBerry, Nokia and Samsung have all shown different ways in which NFC can be used. But without many common applications that can work between those devices, there’s fewer chances for people to really adopt the technology. With a new iPhone likely to be a best seller, there would have been a lot of ways for people to get acquainted with NFC-actions. Now, the promise of NFC will still struggle to be fulfilled for at least another year.”

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.

There may be light in the tunnel for NFC yet

NFC might have taken a hit this week on the smartphone front, but the technology may have found a problem to solve in an (arguably more) unlikely place: the desktop computer. Adrian Covert at Gizmodo reports that MasterCard and Intel announced a partnership at the Intel Developer Forum this week that will “give merchants and laptop makers the necessary technology they need to act as credit card terminals.”

What this means for online shoppers, Covert says, is no more entering credit card numbers or storing them online — “you just tap your card or phone to your computer and get on with your day.” What this means for NFC could be a helpful nudge toward becoming a mainstream technology. Covert writes, “… with more and more phones and PCs coming equipped with NFC, the technology will be there en masse (meaning merchants can spend time and money integrating the feature knowing more than 10 people will use it).”

The growing “fustercluck” of services could hold back mobile payments

Leena Rao at TechCrunch took a look this week at what she calls “fustercluck” in the mobile payments arena. Noting the pace at which companies are launching mobile-payment-related platforms, she asks “how many more ways do we need to pay for a physical or digital product via a mobile device?”

Rao lays out the ecosystem landscape, including the major players like Google, Isis and PayPal, but notes that companies like Groupon, LevelUp and Shopkick are dabbling in mobile payments in various ways, and even major retailers have jumped in. The field is going to need to thin out, she argues, before mobile payments can achieve any kind of ubiquity:

“I think it’s safe to assume that there will be more than one clear-cut winner in the mobile payments/digital wallet race, but we will see consolidation. From the user point of view, a consumer is going to get frustrated very quickly if he or she has to use 10 different apps to pay for items.”

The deciding factor in which companies and platforms will come out on top goes beyond scale and the number of customers a platform can secure, Rao says. “I believe that the company or startup that commands the best value for both consumers and merchants will become the clear-cut leader,” she writes. Rao’s piece is well worth the read.

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September 06 2012

Commerce Weekly: Mainstream mobile payment a decade out?

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

Gimmick to mainstream — the difference a decade can make

With Square teaming up with Starbucks, PayPal partnering with major chains like Home Depot and McDonald’s, and all the hype and speculation around the new iPhone having or not having NFC to facilitate payments for Passbook, mobile payments are getting a lot of ink. But when will mobile payments be fully mainstream? Not for at least 10 years, writes Christina Bonnington this week at Wired. Bonnington points to slow adoption and infrastructure holdups as the major bottlenecks:

“Forrester Research estimates only one-fourth of U.S. consumers will own an NFC-enabled phone by 2016, with 100 million shipping in 2012. Until a solid majority of consumers own such devices, merchants have little incentive to create an infrastructure as receptive to smartphone payments as it is to cash and credit cards.”

Bonnington notes that credit card companies are pushing for merchants to upgrade their systems to accept contactless payments, but as analyst Mark Hung told her, this alone could take up to a decade. Bonnington points out that even after that happens, mainstream mobile payments will still face obstacles similar to those that credit card payments face now: competing platforms that force consumers to carry multiple credit cards to accommodate merchants who accept MasterCard and Visa but not Discover, for instance. Imagine a merchant accepting PayPal and whatever Apple develops but not Google Wallet or Isis. Adding to the chaos, processing fee distribution between banks and hardware/software developers will need to be sorted out, she says, as will agreements on how data gathered via mobile payment will be handled.

In a similar vein, Chris Ziegler at The Verge also argued this week that mobile payments are not ripe for the mainstream and pointed to the ultimate hurdle: consumer frustration and distrust. Ziegler shares a personal experience that highlights the cumulative result of the issues Bonnington noted together with the unreliability of cellular networks: even mobile payments in stores that are set up to accept them don’t always work. Until mobile payments become as reliable and ubiquitous as cash and credit cards, he argues, they’ll remain a gimmick.

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.

Wal-Mart tests mobile checkout, cashes in with new search engine

Wal-Mart joined the likes of JC Penney the Stop & Shop grocery chain when it began testing a mobile checkout service this week. Chantal Tode at Mobile Commerce Daily reports:

“The new Scan and Go [iPhone app] service is being tested at a single store in Arkansas, according to published reports. While customers will be able to scan items with their iPhone, they will not be able to pay via mobile at this point. … The mobile checkout service is currently being tested by employees at the Arkansas store and has not been rolled out to shoppers yet. Users will be able to transfer a list of items they have scanned to a self-checkout kiosk and then pay in one step.”

The motivation behind the new service, Tode reports, is to shorten customer wait times in line and to reduce the checkout area footprint.

Wal-Mart also reported this week that Polaris, the search engine it custom built for its website, is now fully rolled out in the U.S. Nidhi Subbaraman at Fast Company took a close look at how the search engine works:

“One of the ways Polaris is designed to augment the search experience is by treating search terms as categories. So, a search for ‘garden furniture’ may not serve up results with the word ‘garden’ in it, but would offer up suggestions and options for hardy and rainproof, garden-friendly furniture.

Another interesting feature of the search engine is that a product’s popularity on social media sites plays a role in its resulting search display. Sri Subramaniam, VP at WalmartLabs, told Subbaraman “[t]his ‘product popularity score’ is essentially like a Google page rank.” Right now, Subbaraman reports, the search engine integrates with product placements and “Likes” on Facebook, but “[a] product’s popularity on other social sites like Twitter or Pinterest could also one day feed into Polaris’s radar.”

So far, the search engine has proven successful for Wal-Mart — according to a post at Reuters, Wal-Mart reports a 10-15% increase in search conversion (the number of customers who make a purchase after searching on the site) since the rollout of Polaris began a few months ago.

Project Oscar gets a thumbs up

The European Commission approved a mobile wallet scheme this week that it began investigating in April as a potential monopoly. The joint venture by Everything Everywhere, O2 and Vodafone, called Project Oscar, was called into question by UK mobile phone network Three when it was shut out of the venture and by wallet competitors Google and PayPal.

According to the BBC, the Project Oscar founders plan to “release a unified smartphone-based service offering an alternative to cash, credit cards and loyalty cards,” and intend to “create a new company and begin hiring staff ‘as quickly as possible,’” though no launch date for the new wallet has been set.

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August 16 2012

Commerce Weekly: U.S. merchants take on mobile payment

Merchants enter mobile payment arena

With mobile payments on the brink of booming, everyone is angling to get in the game, from payment companies like PayPal and Square to mobile carrier ventures like Isis and Vodaphone to Internet giants like Google. This week, a group of U.S. retailers announced they were taking payment matters into their own hands and planning a joint merchant mobile payments network called Merchant Customer Exchange (MCX). And there are some big players involved.

Robin Sidel at The Wall Street Journal reports that 14 merchants have signed on so far, including Wal-Mart, Target, Best Buy, 7-Eleven, and Lowe’s. Wal-Mart corporate VP and assistant treasurer told Sidel, “We’re open to all partners, but it has to be beneficial to member merchants in a way that improves the system and doesn’t layer on additional costs.”

Saving money appears to be one major motivator behind the new network. Ryan Kim at GigaOm asserts that member merchants are setting themselves up to save money in multiple ways. He writes:

By banding together, they may be able to get better interchange fees from the credit card networks. And in a mobile wallet, they may be able to steer consumers to use their own issued cards or prepaid gift cards. And if an issued card is pulling funds directly from a bank account, they can avoid card fees. You might see retailers offer deals on the spot for consumers who fund a purchase using their bank account through their mobile wallet.

Kim also notes that by launching their own system, the retailers will retain control over their own data and keep it out of third-party hands, pointing out that “Google, for example, is trying to get at the purchase data through Google Wallet.”

No launch date has yet been set for MCX, and Sidel reports that the search for a CEO is underway.

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 future of shopping is all in the tech

Recent Nielsen reports show that not only are smartphones holding a majority in the U.S. (50.4% of mobile subscribers as of March own a smartphone), but that smartphone owners are using their phones to shop. The latest Nielsen report shows that 47% of smartphone owners (or 45 million users) used shopping apps in June, with eBay Mobile and Amazon Mobile apps in the lead.

There’s no question that mobile technology is beginning to change the retail landscape, but we’re just at the tip of the iceberg. Jon Swartz took a look at the future of shopping over at USA Today and writes that technology advances will change everything from physical appearances of stores to shifting the retail workforce focus to be more customer centric. Shopkick CEO Cyriac Roeding told Swartz, “The next five years will bring more change to retail than the last 100 years,” and a Gartner analyst told him that retail we know today will be a thing of the past in 10 years:

“Big-box stores such as Office Depot, Old Navy and Best Buy will shrink to become test centers for online purchases. Retail stores will be there for a ‘touch and feel’ experience only, with no actual sales. Stores won’t stock any merchandise; it’ll be shipped to you. This will help them stay competitive with online-only retailers, Sterneckert says.”

Some of the interesting tech Swartz examines includes digital dressing rooms that allow customers to see how clothing will look and fit simply by standing in front of an Intel Magic Mirror that simulates body type and fabric fit, with no need to actually try on the clothes, and 3-D printers that will allow consumers to print-on-demand many household necessities such as towels and utensils.

Swartz also looks at the coming brick-and-mortar retail revolution and notes that mobile technology will play a key role:

“By the time you walk into a store in the near future, the employees there will probably know what you want to buy, based on information on your trusty phone or tablet. Merchants will know your gender, age, race and income … imagine waving your smartphone over products and seeing what’s inside. Holding the phone over a DVD’s bar code might activate a movie trailer on the phone’s screen … All of this will be made possible with so much personal data on smartphones, and the ability of merchants to parse it to gauge who is just browsing and who’s on a mission to buy.

Swartz examines smartphone technology, the death of cash, augmented reality and harnessing social media as the driving forces behind the future of retail. His post is well worth the read.

East vs West Coast mobile shopping trends

Big data company Sense Networks released its first Mobile Advertising Pulse report, showing East and West Coast mobile shopping behaviors tend to align with lifestyle stereotypes of the two coasts. The company press release on the report identifies the East Coast as “a hub for education and the more practical consumer,” and the West Coast as “being known for residents that are focused on health and fitness.”

Looking at click-through rates (CTR) for mobile advertising deals, Sense Networks identified the top two ad deals for East Coast consumers as “optical and eye doctor deals,” whereas West Coast consumers leaned toward mani-pedi offers and Pilates classes. A few of the fun East Coast versus West Coast data points include:

  • “Consumers throughout the East also had a 60% higher CTR on education deals, including art and photography courses.”
  • “Overall West Coast consumers had a 24% higher CTR on health and fitness deals than east coast mobile users.”
  • “East Coast consumers had a 26% higher CTR on nightlife and an 18% higher CTR on restaurants.”
  • “West Coast consumers had a 136% higher CTR on travel and 33% higher CTR on food and drink (for example, wine tasting).”

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August 02 2012

Commerce Weekly: Apple buys into NFC security

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

Apple looking to secure NFC?

Further fueling the rumors the next gen iPhone will include NFC (there hardly seems to be much doubt at this point), Apple announced this week that it will shell out more than $350 million to buy AuthenTec, a technology company that, as Poornima Gupta and Sinead Carew at Reuters describe, “provides mobile security software licenses to companies like Samsung, and fingerprint sensor technology to computer makers such as Hewlett-Packard Co and Dell Inc.”

As with most things Apple, much speculation ensued as to what this pending purchase will mean for the next iPhone. As noted in the post at Reuters, AuthenTec’s fingerprint sensors are used in mobile phones in Japan to authenticate mobile payments. Erica Ogg at GigaOm runs through the evidence pointing to a pending “iWallet,” including: the launch of Passbook; the 400 million credit cards stored in iTunes; and the fact that “[o]ne of [AuthenTec's] key products is an NFC chip with on-chip encryption, which is designed specifically for mobile payments.” Ogg notes that it’s possible Apple purchased the company so its competitors couldn’t, but points out that “AuthenTec is considered a leader in the secure mobile payments field.”

After the recent NFC hacking demonstration at Black Hat, Apple’s intended acquisition of AuthenTec has also fueled speculation that Apple is looking to provide a level of NFC security that nobody else has. Ian Paul at PCWorld points out that “AuthenTec’s expertise could help Apple bolster the security of any NFC feature it implements. This would also make the iPhone and iPad more appealing to security-conscious IT managers at large corporations.”

Mobile payment conjecture aside, Maribel Lopez at Forbes argues that, sure, Apple could use this company’s technology to help advance the “stalled” mobile payment market in the U.S., but the potential of the technology goes far beyond a mobile wallet. Lopez points out it can be used to manage and verify digital identities, a function that, she argues, will become an inherent part of daily life as services become “people-centric, but device and network agnostic”:

“The future is contextual identity that will be based on multiple factors, including location, device, username/password and possibly biometric authentication. … Fingerprinting recognition in Apple devices could unlock a new age of usability where each user’s preferences and customization could be retrieved by simply pressing a finger on a screen. This could also be combined with the next generation of Siri to enable seamless navigation with voice. The post-PC world needs a new set of navigation and identity tools. It’s clear that Apple is trying to build this via home grown products and strategic acquisitions.”

Lopez’s piece is this week’s recommended read — you can read it in its entirety here.

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.

PayPal teams with The West Australian daily to cross the digital divide

Embracing digital isn’t the same as assimilating digital — one of the most difficult obstacles in the era of the Internet is figuring out how to successfully integrate digital into traditional sales and business models. Many retailers and newspapers, for instance, have erected digital silos, creating digital products and websites as their own entities, often to the detriment of both the digital and traditional products.

In a post examining the current state and future potential of mobile commerce, Jay Henderson, global strategy program director at EMM, writes:

“Perhaps the biggest obstacle marketers face is the fact that 79 percent are running mobile campaigns in silos, discretely and on an ad hoc basis. In today’s cross-channel world, marketing channels cannot survive on islands where fragmented views of customers compromise the ability to measure overall performance and hinder the customer experience.”

Likewise, much of newspapers’ traditional marketing and advertising efforts have failed to cross the digital divide. PayPal and The West Australian daily newspaper, however, have launched an advertising sales campaign that looks to do just that by making the newspaper’s print product more mobile. A report at Mobile Payments Today describes the campaign:

“The West Australian is including QR codes in advertisements, turning a reader’s mobile device into a personal shopping assistant. … When the newspaper’s readers scan a code, they are taken to a mobile optimized shopping cart that lets them order and pay for the item from their PayPal account … [PayPal's mobile wallet tool] prepopulates relevant shipping information into order forms so shoppers don’t have to contend with entering information on a small mobile screen.”

You can see the mobile-print campaign in action in the following video:

Mobile wallets enter the cloud

Since its launch a little over a year ago, Google Wallet has seen its share of issues, not the least of which were concerns with security and the fact that it couldn’t seem to establish credit card partners, aside from MasterCard. Google took that bull by the horns this week — it put its wallet in the cloud and now supports all major credit and debit cards.

According to the press release, the cloud-based wallet stores users’ card numbers on Google servers rather than on individual phones, and “[a] wallet ID (virtual card number) is stored in the secure storage area of the phone, and this is used to facilitate transactions at the point of sale.” This change allows for the added credit and debit card support.

The move to the cloud also allows Google to enhance security beyond the Google Wallet PIN. The release states:

“[W]e’re adding a Google Wallet security feature that makes it possible for you to remotely disable your mobile wallet on a lost phone. … When you successfully disable your wallet on a device, Google Wallet will not authorize any transactions attempted with that device*. If the Google Wallet online service can establish a connection to your device, it will remotely reset your mobile wallet, clearing it of card and transaction data.” … [* For now, Google Prepaid Cards and some Citi MasterCard cards will remain active until Google Wallet can remotely connect and reset your mobile wallet.]

The new cloud-based wallet is available now on Google Play. Users will need an NFC-enabled device as well as an Internet connection to register cards, view transactions and to select a card to pay with. Actually paying at the cash register, however, doesn’t require an Internet connection.

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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