ENTRIES TAGGED "mobile payment"

Upward Mobility: The Mobile Payment Problem

Mobile Payment is going to take a lot of cooperation by a lot of competing interests, or a clever end-run

There was a time when the two big unsolved puzzles of online finance were micropayments and mobile payments. Micropayments were a problem because no one seemed willing to make sub-dollar transfers economically viable, while mobile payments had a chicken-and-egg solution / vendor paradox. Sites like PayPal and Square seem to have finally resolved the micropayment issue, as are more out-of-left-field ideas like Bitcoins. Mobile payment is still a morass of competing solutions, however.

For a while, Near Field seemed to be the sword that would slay the dragon, but Apple’s continual refusal to adopt the technology would leave a big segment of the mobile market out of the play. Even if someone comes up with a new point of sale (POS) terminal leveraging the more universal Bluetooth Low Energy, the real challenge isn’t the hardware. The problem is getting dozens of POS vendors and all the banks that issue cards to sign onto a new standard, and getting enough stores and retail venues to adopt it. Chicken and the egg once again.

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Commerce Weekly: The lucrative art of tracking shopper behavior

Revealing shopper behavior, retail battles web with experience and service, and Starbucks' struggles with Square.

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.

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Commerce Weekly: You can now buy stuff with tweets

AmEx now lets you buy with hashtags, 3D printing threats to retail, and PayPal comes to the gas pump.

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.”

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Commerce Weekly: Targeting Amazon

Strategic brick-and-mortar retail campaigns to battle Amazon, Square ends NYC taxi pilot, and Isis prepares for launch.

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

Strategic maneuvers aimed at Amazon

Best 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.

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Commerce Weekly: Big data in retail

Big data and mobile are changing retail. NFC? Not so much.

Here are a few stories from the commerce space that caught my attention this week:

Mom and pops sidelined by big data?

Gary Hawkins at the Harvard Business Review took a look this week at marketing and research in the commerce space and argued that the costs associated with big data advantages may be wiping out the little guy. Hawkins writes:

“In this war for customers, the ammunition is data — and lots of it. It began with transaction data and shopper data, which remain central. Now, however, they are being augmented by demographic data, in-store video monitoring, mobile-based location data from inside and outside the store, real-time social media feeds, third-party data appends, weather, and more. Retail has entered the era of Big Data.”

Hawkins points out that this level of consumer intelligence is highly advantageous and even more expensive, thus only retailers with adequate resources (read: deep, deep pockets) can compete. Citing a study (PDF) by the Grocery Manufacturers Association, he notes that “annual industry spending on shopper marketing at over $50 billion, and growing.”

In addition to sidelining smaller retailers, the shopper marketing trend is having a more pervasive effect on the industry as a whole by changing the distribution of budgeted marketing expenditures. “Trade promotion accounted for 44% of total marketing expenditures by manufacturers in 2011, lower than any other year in the past decade,” Hawkins notes. The reason for the shift is all about the ROI — quoting Matthew Boyle of CNN Money, Hawkins writes that “the partnership of Kroger and dunnhumby ‘is generating millions in revenue by selling Kroger’s shopper data to consumer goods giants’ … It is widely understood that Kroger is realizing over $100 million annually in incremental revenue from these efforts.”

This model not only caters to large retailers over smaller retailers because of the size of their wallets, but because it’s easier for brands to interact with the corporate headquarters of a major retailer with 1,000 stores than to interact with 1,000 owners of independent stores, Hawkins writes. He goes into detail about how this business model will affect the industry on several fronts — you can read his piece in its entirety here.

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Commerce Weekly: Starbucks gives Square’s mobile payment a big push

Square and Starbucks unite, same-day delivery from eBay and checking in on the mobile wallet wars.

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

Square gets Starbucks, cash and Howard Schultz

SquareSquare announced a new partnership with Starbucks this week. Peter Ha at TechCrunch reports:

“Beginning this fall, Square will begin processing all U.S. credit and debit card transactions at participating Starbucks stores across their 7,000 locations. Pay with Square users will be able to find a nearby Starbucks in the Square Directory from their iPhone or Android smartphone.”

Ha notes in his post that as part of the partnership, Starbucks also is ponying up $25 million in series D funding for Square and offering up its CEO, Howard Schultz, to serve on Square’s board of directors.

Harry McCracken points out in a post at Time Techland the partnership will put Square in a much better position to compete on the mobile payment front. McCracken writes:

“At the moment, Pay with Square is accepted at around 40,000 locations — mostly neighborhood businesses such as independent coffee shops, restaurants and beauty salons. The agreement with Starbucks will put it in a major nationwide chain for the first time, and therefore puts it in closer competition with Google Wallet, which is already accepted at Home Depot, Office Depot, Starbucks rival Peet’s, Macy’s, RadioShack, 7-Eleven and other major merchants.”

Another important aspect of the agreement is that Starbucks will promote other local Pay with Square merchants “from within a variety of Starbucks digital platforms, including the Starbucks Digital Network and eventually the Starbucks mobile payment application.” As Ha notes in his post, “this catapults Square into the mainstream consciousness for the millions of drones who drop by their local Starbucks on the way to work.”

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Commerce Weekly: Square disrupts, PayPal shrugs

Square's frictionless payment doesn't worry PayPal, NFC gets hacked, and mobile payments head to the Olympics.

A look at Square’s new payment app and why PayPal isn’t concerned, an NFC security hack is demoed at Black Hat, and Visa takes mobile payments to the 2012 Summer Olympics. (Commerce Weekly is produced as part of a partnership between O’Reilly and PayPal.)

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Commerce Weekly: NFC delays give Bluetooth an opening

Commerce Weekly: NFC delays give Bluetooth an opening

Why Apple and others could choose Bluetooth over NFC, NFC is too slow for the Tube, and PayPal expands its point of sale.

An analyst says Bluetooth may be a better option than NFC for Apple, NFC isn't quite working for the London Tube, and PayPal gets more partners and a new payment app. (Commerce Weekly is produced as part of a partnership between O'Reilly and PayPal.)

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Commerce Weekly: The return of iPhone NFC rumors

Commerce Weekly: The return of iPhone NFC rumors

Can Apple mainstream NFC? Also, PayPal studies the POS and Square gets into politics.

When will Apple bring mobile commerce to the iOS masses? Also, PayPal studies consumer behavior at the cash register and Square collects for candidates. (Commerce Weekly is produced as part of a partnership between O'Reilly and PayPal.)

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Commerce Weekly: Bring your mobile to Black Friday

Commerce Weekly: Bring your mobile to Black Friday

Retailers accept mobile's in-store presence, Android developers are keen on Kindle Fire, and Square rewards loyalty.

Brick-and-mortar retailers adopt the "if you can't beat 'em …" attitude toward mobile devices. Elsewhere, Android developers are intrigued by the Kindle Fire, and Square wants to put loyalty program punch cards out to pasture. (Commerce Weekly is produced as part of a partnership between O'Reilly and PayPal.)

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