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April 05 2012

Commerce Weekly: The do's and don'ts of geo marketing

Here's what caught my eye in the commerce space this week.

Placecast's CEO on the secret to successful targeted offers

PlacecastLast August, I wrote about Placecast, which has been working to deliver coupons and offers on behalf of its retail clients to opted-in customers when they hit geofenced areas. Placecast's platform allows merchants to set up a ring around their locations (or other locations, as described below) and then trigger an SMS to customers who have opted in to receive them. Placecast works with mobile carriers to deliver large tranches of opted-in customers to its merchant clients. This week at O'Reilly's Where Conference, Placecast CEO Alistair Goodman talked about the right and wrong way to deliver ads to a geofenced audience, based on the learning curve they have climbed over the past few years.

Some of these are obvious, like the need to link data about the customers' preferences with the location — the richer the data, the more relevant the message, and the more likely it is to hit home. Goodman explained this as a sort of stack, with positioning data (mostly from GPS, but supplemented with Wi-Fi and other data) at the lowest level. Just above that, a layer on context: What type of place is the user at (mall? stadium? park?) and what's the weather like? Atop that level, demographics and psychographics — who are the users and what do users in their consumer categories tend to go for? Atop that layer, the users' preferences: What do they want to be notified about, when, and how often? And finally, at the top of the stack, the offer itself: What is it the retailer is promoting?

A second key point is the need to find relevant locations — not just the retailer's store, which is obvious, but other places where the customer is likely to be receptive to the offers. For example, you might promote dog food or pet stores at a dog park, or a promo for a sports drink around a gym, or the sponsor of a concert around an arena. Interestingly, Goodman said that while merchants often ask Placecast to geofence around a competitor's store, he advises them that isn't a particularly effective marketing strategy: "If a customer is already headed into a certain store, a message urging them to visit a different location isn't likely to be very effective. A more effective way is to promote the message from a relevant public space." (I noticed the audience received this wisdom in total silence; you could almost hear the wheels of doubt spinning.)

Finally, Goodman said customers react better to offers when they believe it comes to them through this channel with some level of exclusivity. "Customers like it when they feel they're getting an offer that others aren't getting." So the coupons or other offers can't be the same as what's posted on the window of the store.

Goodman said the platform can deliver offers through a variety of channels, but most are delivered as SMS text messages, which remain tremendously effective. And they seem to be working: Goodman said that their research finds that 49% of store visits that occurred after receiving a Placecast ShopAlert were unplanned before the alert, while another 19% served as reminders to visit the store. In these cases, you might say those texts delivered twice.

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.

Jumping ship at Google Wallet?

Google WalletThe departure of Google Wallet co-founding engineer Rob von Behren to join payments startup Square aroused suspicion that Square might be looking to incorporate NFC in its system. Dan Balaban's article in NFC Times puts von Behren's departure in the context of a swath of high profile talent exits from a project that appears to be struggling to find partners and users. Balaban quotes a mobile commerce analyst who believes von Behren's joining Square almost certainly means a move by Square to support NFC. "Else, it would be like hiring Michael Jordan to get advice on golf," the analyst said.

In the past, Square's COO Keith Rabois has questioned the value of NFC, calling it, at last September's GigaOM Mobile Conference, "a technology in search of a value proposition." But as more mobile phones ship this year with the short-range wireless technology, it seems natural that Square would want to tap into it to facilitate its "Pay with Square" (formerly Card Case) system that allows customers to pay at merchants with their Square accounts.

Meanwhile, Balaban's article raises questions about the viability of the Google Wallet project. In addition to von Behren, fellow founding engineer Jonathan Wall and product lead Marc Freed-Finnegan left to start their own mobile-commerce startup, Tappmo, in March. Andrew Zaeske, former director of engineering for Wallet, is also said to have left the project. Speculation centers around disagreements between Wallet chief Osama Bedier (who joined Google from PayPal in February 2011) and other leaders of the team over the project's direction. It can't help that the refusal last autumn of Verizon to allow Google Wallet into its phones, and Verizon, AT&T, and T-Mobile's plans to launch their own mobile wallet under the Isis brand, cast into doubt whether Wallet will ever be able to expand beyond the Sprint network.

Will carriers like Facebook's post-IPO status?

Mobile carriers run the risk of losing text revenue from Facebook, as more of the service's users access it from mobile devices and use it as their primary communication channel. That's the view of Victor Basta, managing director of London-based Magister Advisors, which advises companies on acquisitions and public offerings. Basta told Bloomberg BusinessWeek that "Facebook's IPO is about the worst thing that could happen to network operators" since the pressure to demonstrate strong earnings to investors will make it harder for Facebook to share revenue with the carriers. Facebook's "over-the-top" service rides on the mobile networks, failing to share any of the revenue from advertising delivered over it and increasingly taking away from the carriers' SMS text earnings, as users send free Facebook messages instead.

"The fundamental challenge for network operators will be finding a way of becoming part of the Facebook ecosystem rather than simply external enablers," Basta said.

Tip us off

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


If you're interested in learning more about the commerce space, check out DevZone on x.com, a collaboration between O'Reilly and X.commerce.


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November 03 2011

Commerce Weekly: Square upgrades Card Case with geofences

Here's what caught my eye in the commerce space this week.

Card Case can reach out and touch someone

Square Card CaseIf you're among those who downloaded Square's Card Case digital wallet app back in May and haven't opened it since, there's something new in the latest upgrade that may inspire a return visit to the app: geofencing. Card Case's latest version takes advantage of new capabilities in iOS 5 to trigger alerts when a user enters a geofenced area. Users have to opt into the feature. Once they do, when they pass within 100 meters of a retailer who uses Square, the app will automatically load a card in Card Case. If you visit the shop and opt to buy something, you can complete the transaction by giving your name at the register and confirming the purchase through a text message that arrives on your mobile.

The process still sounds a little less convenient than paying for coffee with a five-dollar bill — and I must confess I wasn't able to demo this today, though I will follow up here once I do. But in theory, this makes Card Case a far more interesting app to parties on both sides of the transaction. Here's why:

  • First, for those of us who buy stuff — Card Case is an early form of the mobile wallet, one that isn't waiting for phones or merchants to adopt NFC wireless. Unfortunately, few merchants use it. It's no doubt more interesting downtown (isn't everything?). But I live in a medium-sized suburb where most of the nearby Square-enabled merchants offer services I don't use much: film editing, spa services, wine-country tours. It's not going to be much help in keeping track of my expenses unless Square makes some deal with a larger network of merchants.
  • Second, for those who sell things, the value is clearer — You can reach out and tap customers who may be close and ready to buy. As I noted this summer, Placecast is another player developing this service. Its ShopAlerts send out texts (for other merchants, not under its brand) when opted-in customers wander into a retailer's geofenced area. Groupon Now has also entered this game, giving merchants the ability to manage offers in real time. Undoubtedly, Square will want to offer similar capabilities to its merchants so they can clear the shelves or fill the tables in real time.

The back-end data and analysis that retailers get from these services is valuable, but the real-time customer management seems like the key feature of these apps. Placecast CEO Alistar Goodman offered a prediction about location and real-time at the recent Street Fight Summit:

Location and time are far more predictive of intent than any other past behavior ... We're fast approaching a time where you're going to be able to bid on a user on a street corner at a particular point in time in real time.

The age of virtual barkers is upon us.

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.

Survey: Mobile users say take my location but not my money

Oracle released results of a global survey of 3,000 mobile phone users, which highlights a few key trends:

  • Customers are becoming more comfortable sharing location data about themselves, but most still don't trust mobile security enough to buy stuff on them.
  • While tablet ownership remains fairly low, lots of people are planning to buy them and they want apps that work well on them.

It's no surprise that the survey found subscribers downloading more data and apps this year than last. But I was surprised at the timidity around mobile apps: still only 55% of users had downloaded a mobile app, and only one in four had paid for an app. (I'm guessing their iOS 5 upgrade went quicker than mine.)


Where consumers want to use popular types of apps (Source: Oracle Communications survey, "Opportunity Calling: The Future of Mobile Communications — Take Two.")

Shopping is obviously becoming more important, but for most the mobile shopping experience is still limited to pre-purchase research. Depending on the region, the survey found between a third and a quarter of survey respondents used their mobile phones for comparison shopping and reading customer reviews. But only one third believed their phone was secure enough to make a purchase on. In a related note, 84% bought their phone in a retail store, though most said they did their research online.

Smartphone ownership is rising quickly, but I wonder if the survey overstates it at 70% globally. According to Oracle's research, the U.S. and Europe have 56% and 57% smartphone ownership, respectively. That sounds in line with other reports. But the survey attributed 95% smartphone ownership in the Middle East. (The survey appears to have taken its entire Middle East sample in the United Arab Emirates, which may not be representative of the region as a whole.)

The survey also found that smartphones are outpacing owners' expectations of them.

  • In 2010, 52% thought their mobile phone would replace their digital camera; this year, 43% said it already has.
  • In 2010, 54% thought their mobile phone would replace their digital music player; this year, 34% said it already has.
  • In 2010, 54% thought their mobile phone would replace their GPS; this year, 24% said it already has.

Finally, the survey revealed rising enthusiasm for tablet usage. While only 16% said they have a tablet today, 41% plan to buy one over the next 12 months. Reading, watching television and movies, and banking ranked high on the list of things users wanted to use their tablets for, and in most cases they want these sorts of applications to work equally well on both tablets and their mobile phones.

You can download the report's executive summary here.

Got news?

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


If you're interested in learning more about the commerce space, check out PayPal DevZone on X.commerce, a collaboration between O'Reilly and PayPal.


Related:

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