Posts Tagged ‘retailers’

360-Degree View of the Consumer Is Going To Require Retailers to Do a 180 by using Mobile

By , Sep 28, 2012

In July, Oracle published a 40-page industry scorecard, answering the question, “When it comes to better data management, how are industries doing?”

Answer: Worse than bad.

Big Data is exploding, no surprise there. And businesses are not prepared to manage the data deluge in a way that is costing them real revenues.

For retailers, failure to properly process their customers’ data means that their already slim margins are even smaller. According to survey results, retailers estimate they are losing big bucks – to the tune of 10% of annual revenues – because they can’t leverage the information they collect across channels. The Oracle study found that only 17% of retailers rated themselves as having a 360-degree insight into their customers through data gathered across multiple channels.

Is this problem? We say it’s an opportunity. The Oracle report found that there is a silver lining within all the data to help retailers do a 180 degree turn to process the data and act on those insights.

Mobile.

How can mobile help? Here are 3 key areas which mobile can help retailers.

Mobility Element: For retailers, giving their sales teams access to mobile is key: 40% percent of retailers in the Oracle study said that providing store associates with mobile access to customer, product, inventory and other information is critical to combat “showrooming”. Mobile allows retailers to provide customized information to their customers using micro-location (in-aisle) technology. Mobile when combined with other CRM information (both offline and online) can provide the entire organization with a real-time, consistent and complete view of the customer.

Permission Element: A 360-degree solution is part technology and part human. You can have the greatest CRM system in the world and tie a mobile solution into it, but if you are missing the human element – it’s not going to work. We call this Thinking Human – which means asking the consumer what he wants and then actually listening and responding to the stated needs.

Engagement Element: For consumers, the ability to opt-in and share information with retailers allows them to share the products they like. Retailers can then target relevant offers to consumers. This concept was summed up very well over at the Mobile Demystified Blog in post entitled “How Mobile Solves The Retail Marketing Data Challenge.” Retailers, according to the author Kane, need to “look not for mobile marketing solutions, but mobile personalized engagement solutions.” A great example of personalized engagement is how Starbucks is using permission and mobile to connect all of its marketing channels.

Recently, I experienced two examples of how retailers were not using my data correctly.

  1. I purchased a chair from JCPenney for my daughter’s bedroom and received a thank you email– with a $10 coupon. Cool. But the next email I received (and the several hundred I’ve received since then) told me all the things on sale in the store and online. Guess what? I’m not interested in the plethora of stuff they offered, from shoes to jewelry and baby gear. But I did recently buy bedding for my daughter at the store. Wouldn’t it be so cool if they referred to THAT and maybe even offered me new accessories that might go with the chair and bedding (throws, pillows, curtains)?
  2. Earlier this month, I got email from my favorite restaurant wishing me “Happy Birthday”. Too bad my birthday is in August.

The Oracle study lays out the reasons why businesses and retailers should focus on using mobile to deliver “engaging and rewarding experiences to consumers”. All the elements are there for retailers to deliver a 360 degree experience; technology, mobile, permission and creativity. Retailers just need to get educated on the possibilities and really want to provide added value to their customers.

Can we get rid of payment terminals?

By , Aug 31, 2012

Note: This blog post was originally published on Mobile Payments Today.

Some might call it the nerdy behavior of a passionate m-commerce professional, but each time I check out at the grocery store I am intrigued by these small, strangely designed payment terminal devices on the counter. They're a mix of metal, plastic and unhandy wires, key paths with flashy color combinations, and a display that seems to date from the eighties. In various countries, such as Turkey, you even see several of these devices on a single counter – resulting in even more unhandy wiring.

On the one hand, shop owners spend so much money to create an attractive shopping experience, just to ruin it all by the forcing their customers to put a card in the sleeve of an appalling payment machine. It's a machine, by the way, that shop owners have to buy or rent, a machine that comes at a cost.

So each time before I swipe my card, I not only wonder why they can’t seem to make these devices more appealing, but also why they are still there in the first place!

My smartphone is a mixture of plastic and metal coating as well, but it has a fancy touch screen and touch path, powerful silicon inside, and a range of wireless communication options. Is it too much to ask to leverage these nice, 21st century features, and change the way we make payments for brick-and-mortar shopping?

Innovation is happening, but have you ever been at a check-out without a payment terminal? Not too often, right? Especially if you’re living in Europe. Indeed, even most of the ongoing payments innovations are still leveraging the “payment terminal” model.

Take the “contactless” innovation wave: contactless cards (or any virtualized versions on NFC-enabled mobile handsets) are simply trying to create more convenience (no PIN for micropayments) and speed (wave vs. swipe). But these cards don’t disrupt the payment flow. We still have the payment terminal, this time upgrading the sleeve with an antenna.

And the rise of mobile wallets, with Google Wallet as a leading example, are only reconfirming the status of the payment terminal. The current NFC version of Google Wallet, for instance, extends benefits of contactless payments, using your virtualized card on the handset, with advertising services. While valuable for merchants seeking to attract customers with personalized discounts/vouchers, and providing more value to consumers, it is still leveraging payment terminals.

For sure, there is the successful adoption of Square or iZettle (often by merchants who didn’t have a payment terminal yet) turning a mobile smartphone into a payment terminal by plugging a card reader dongle into the headset slot. It's very innovative and already shifting payment terminal features to phones by means of dedicated hardware extensions. But still it's enforcing the concept of a payment terminal (be it completely portable this time).

So why can’t we get rid of the terminal concept completely, through a simple “check-out button” on a smartphone, for instance?

Let’s call it the “cloudification” of the payment terminal. The cash register, rather than contacting the payment terminal,  could call a virtual terminal in the cloud, which then pushes a kind of check-out button to people’s smartphones to debit their cards and accommodate the payment. Consumers just have to register their card details once, which are then securely stored in the cloud (so not on the phone) and payment at brick-and-mortar shops become as simple as the check-out at Amazon or iTunes.

Feasible? Yes. It is happening already. Cash registers have become increasingly “open” and cloudified, connecting them to a physical payment terminal or a virtualized one should be equally easy.

Just look at the recent announcements of PayPal with high street brands such as Oasis, Coast, Warehouse or Karen Millen in the U.K . And the latest services from Square, its Pay with Square product, allow shoppers to leave their leather wallet with plastic cards at home.

Additionally, cloud-based services can easily be combined and glued together to build new consumer experiences, hence cloud-based payments could be perfectly extended with other cloud-based marketing services such as targeted offers or coupons. Consumers can benefit from a single check-out for both paying and redeeming a coupon, while the merchants get sales activation services on top of just a new way of paying.

The remaining barrier might be the discrimination of e- and m-commerce transactions from card payments.  As long as merchants have to pay payment scheme providers more for a check-out button on your smartphone compared to paying with your card directly, the business model might be challenging.

Of course, this fee structure dates from the time where “card not present” types of transactions like remote mail-ordering or online commerce were subject to higher fraud risks. But cloud-based payments don’t require card details of (unprotected)  handsets, and today’s smartphones capture relevant context to spot fraud patterns at location. So wouldn’t it be great if the payment schemes could take a fresh look at declining risk levels, and thus the rates for m-commerce transactions.

Anthony Belpaire is managing alliances for the Alcatel-Lucent mCommerce Business Unit. Alcatel-Lucent mCommerce supplies digital media, mobile advertising and payment solutions to telecom operators to enhance the monetization of their subscriber assets. Mobile commerce solutions typically glue an eco-system together of payment issuers, advertisers, merchant acquirers, telcos.

 

LevelUp Upends the Mobile Payments Paradigm

By , Jul 20, 2012

LevelUp, the mobile payments division of SCVNGR, sent a cannonball shot last week across the bow of mobile payments and credit card companies by waiving credit card processing fees for retailers during mobile payment transactions. This could be a highly disruptive moment for the traditional payments industry by potentially reducing the $50 billion dollars that credit card companies currently charge retailers and providing retailers new opportunities via mobile payments to deliver added value to consumers. So far, other mobile payments players like Google Wallet, Square, PayPal, ISIS, Inuit, VeriFone and Dwolla have not followed LevelUp’s lead.

How Does LevelUp Work?

LevelUp's mobile payment app for the iPhone and Android has already been downloaded by 200,000 users. Once consumers download the app, they register, add their credit card information and choose their target city. The company has a roster of 3,000+ retailers in 30 US Markets (New York, Boston, Chicago, etc.) and is hinting at an overseas expansion. LevelUp charges 35 cents for each dollar discount the retailer provides consumers in the marketing campaign. A consumer purchases goods and services, paying for them by flashing a QR code from the LevelUp mobile app. The consumer can also add a tip to the mobile payment.

For example, a pizza parlor can offer a consumer a $2 discount, so the $10 pizza can be purchased for $8. The campaign cost the pizza parlor $2.70 ($2.00 + (2.00 x 35%)) and LevelUp gets 70 cents. This is similar to a Groupon for the retailer, but the cost is much less and is highly targeted. LevelUp also offers customer loyalty campaigns for the same cost, where existing customers receive a discount once one spends a certain amount of money, i.e. 10% off after you spend $50.

How Does LevelUp Do This?

Interchange is the service that payment companies provide to retailers to process payment transactions. The service typically costs between 1.5% and 3% per transaction. Seth Priebatsch, CEO of SCVNGR calls LevelUp's new feature, “Interchange Zero”, which eliminates the interchange fee. Until last week, LevelUp was charging retailers 2% per transaction. Mr. Priebatsch said LevelUp was able do this because the interchange rates his company pays are “astonishingly low” and because his technology uses algorithms that move money through networks more efficiently. In addition, LevelUp has special relationships with many banking institutions. Mr. Priebatsch hopes that other mobile payment companies will follow suit and 0% interchange becomes the norm not the exception. He says, “The long-term effect is that people will do what we’ve done — find a way to make money in this space that offers value beyond moving money,” he said. “We need to give the business something above and beyond just the ability to accept payments.”

Conclusion

For retailers, LevelUp allows them to run highly targeted marketing campaigns based on location and preferences. LevelUp analyzes the activity of consumers which will allow it to provide retailers with consumers who are more likely to accept the campaign. While LevelUp does not ask for preferences during sign-up, one would expect more opt-in options which would allow LevelUp to direct even more targeted campaigns for retailers. For consumers, they will get lower prices as the transactions fees are reduced and retailers could potentially pass the savings along. We applaud LevelUp for changing the paradigm and focusing on providing value to consumers.

« Older Entries