Sources close to Google are reporting that the company will announce the release of a Virtual Wallet with NFC (Near-Field Communication) functionality, available on Sprint’s Nexus S smartphones using the Android operating system. The primary functionality will include the ability to pay for goods with a simple swipe of the phone, as well as redeem coupons and rack up points in a loyalty program; working with Google to make this technology possible are VeriFone and ViVO Tech. The news is expected to be broken tomorrow, May 26th, at a press event in New York City. The list of retailers who will be participating in the early stages of this release includes Subway, Macy’s and American Eagle Outfitters, which should bode well for the generally younger, more tech-savvy user base of Droid smartphones.
This release should also serve as a wake-up call for retailers and grocers, and underscore the need for mobile device functionality at their stores. Smartphone and financial payment technologies are clearly converging and will certainly be tied to social media and location based services like Foursquare and Gowalla in the very near future. One example of a retailer with good intentions in the area of customer engagement is Target, which has been making great efforts to meet their customers on their smartphones. Interestingly they are holding off on mobile payments for the near-term, citing uncertainty in the smartphone mobile payments landscape and somewhat slow user adoption to this point. With Google entering the space on one of its most popular Droid devices, the issue of user adoption could be solved very quickly, and retailers who grasp this reality and are able to get a head-start over their competition (for example by using software like ours!) will be in a great position to win more business and delight their customer bases.
In a not-so-surprising report from comScore, it was revealed that the Google Android OS now enjoys a 7.6% lead in market share over its nearest competitor, Research in Motion. In 3rd place is Apple, which achieved a .5% boost from Q4 2010 and now commands 25.5% of the market. More disappointing news for Microsoft and their Windows Phone 7 efforts as they lost nearly another full percentage point of the market and now stand at 7.5%. It stands to reason that their recent acquisition of Skype, valued at $8.5b, will likely play a role in Redmond’s attempts to somehow keep this sinking ship afloat. Many Skype users are already voicing fears that with the buyout, Skype will no longer be fully supported on competing devices, as was the case with Internet Explorer when Microsoft discontinued new software releases for the Mac in 2003 and ceased all support of the platform in early 2006. It seems very unlikely that a similar strategy will prevail with Skype, largely due to the increasing popularity of Google Voice, and everything seems to be pointing toward more sustained growth for the Droid and iPhone in the near future. Developers/retailers/consumers stay tuned!
Expected to be released later this year, Google has teamed with Mastercard and Citigroup to build a near field communication (NFC) mobile system on their Android OS that will allow consumers to use their smartphones as credit cards. People with Citigroup credit or debit cards would simply need to download an app on their Android phones and authorize their smartphone to communicate with their bank. Google’s position in the ecosystem appears to be centered around enabling retailers to target their customers more effectively by selling ad space and the opportunity to pitch discounted offers to people near their stores.
This move by Google and co. is an extension of the recent success that Starbucks has enjoyed with their NFC-enabled payment application, and with the proper privacy considerations should be a big hit with retailers and consumers, alike. The biggest question on the table is with the notion of “targeting” offers. What are the criteria available to assure the offers are relevant? Will it be made up of purchase history, internet browsing history, surveys, or all of the above? What’s your take on all of this? Would you use this technology or does it seem too invasive? Send us your comments and reactions!
The location based services leader Foursquare has teamed up with American Express to offer Groupon-like discounts to users who check-in at participating retailers, such as $10 for the price of $5. In effect, the hope is that this type of real-life connectivity will draw more interest from retailers looking to increase customer engagement and encourage trips to their locations by leveraging LBS.
Early feedback on the benefits and functionality appears very positive, particularly from consumers. The potential applications for this type of LBS-payment duality are virtually limitless, and could be particularly interesting for grocery retailers looking to drive increases in customer traffic and encourage consumers to explore new areas of their store. Imagine a grocer who offered a similar promotion where shoppers could earn $5 in their personalized digital wallet, to be spent anytime they chose, for checking in at their location and then scanning the barcode of a certain product or group of products. With Accelitec software much of this is possible today, and could be a very powerful way for brands and retailers to cooperate in the launches of new products, while simultaneously rewarding their customers and driving loyalty to the brands and retailers alike.
Nielsen reported today that the Google Android operating system is now controlling 29% of the US Market, with Apple and Research in Motion (RIM) sharing second place with 27% apiece. For many analysts, this news comes as no surprise given that unlike the iPhone, the Droid is available on myriad devices and networks, and consumers have been moving away from RIM’s Blackberry for several quarters running.
The piece of news that does qualify as somewhat unexpected is Microsoft’s Windows Mobile and Windows Phone 7 falling to 10% of the US Market. This result comes on the heels of their $400m investment in the launch of their new mobile efforts. Their market share in the previous three quarters stood at 18%, 15%, and 14% respectively, and this figure raises some serious questions about their ability to compete in the smartphone space. The folks in Redmond also recently announced a partnership with Nokia, as well as the launch of Bing mobile, now with the ability to aggregate location-specific deals for users. The question is will these recent efforts from Microsoft deliver any meaningful results in the way of smartphone market traction? Or is this quickly becoming a classic case of throwing good money after bad?
Something interesting happened on the way to Fashion Week in New York City; Kmart is now allowing certain participants at this year’s fashion summit to interact and request products from them simply by tweeting. The retailer has equipped a limited number of influencers and bloggers with what they are calling “survival kits”, loaded with an assortment of items to help them get through the week in style. The list includes items such as “lip balm, breath mints and stockings”, and by communicating with the Kmart twitter feed they can get a refill on any of these items almost immediately. This is a novel example of a retailer not only recognizing but leveraging the utility of social media at a major event.
Did other retailers notice what Kmart has done here? This could be a powerful tool for all grocers, small and large, to allow shoppers within their stores to tweet questions, comments, suggestions and ideas directly to the store, enabling real-time give and take between shoppers and retailers. What do you think? If your local grocer or favorite retailer were using a tool like this, would you use it to communicate with them while you shopped?
Big news this week as Starbucks coffee drinkers can now use their smartphones as a payment method at nearly 6,800 of the Seattle-based coffee shops nationwide. The app allows users to attach Starbucks giftcards to a user’s Blackberry or iPhone and then scan a barcode on their phone at the point of sale, and can also be charged with value via PayPal or any major credit cards. The message coming out of Starbucks HQ seems to be that they’ve opted for a barcode-based payment system today, but are planning to take this technology in some pretty interesting directions, such as Near Field Communication (NFC) in the future. Starbucks also has the ability to add value to its customers reward cards for taking surveys, and will now presumably be able to complete this entire process of presenting a survey offer, accepting customer responses, adding value to the customer loyalty app and accepting payment all on a single smartphone. The functionality being utilized for this rewards app is very similar to the Digital Wallet software available from companies like Google and Accelitec, and the fact that Starbucks has now taken the lead should serve as sign to other brands and retailers that now is the ideal time to be targeting customer loyalty by creating and launching rewards applications for smartphones.
This weeks sign of the times has to be the news that eBay saw their sales via mobile devices rise from $600mm to over $2b in 2010. The apps, which are available for the iPhone, Android, Blackberry and Windows Phone 7 operating systems, have been downloaded by over 30 million people in more than 190 countries. Interestingly, the UK has been the fastest Eurpoean adopter of eBay’s mobile app, and combined with Germany they “generated nearly one third of all eBay’s mobile sales in 2010“. According to eBay, every minute there are 94 bids made for various products and 13 items of clothing/shoes/accessories are purchased. This really highlights the growing trend for consumers to do their shopping online and should resonate loud and clear with traditional, brick and mortar retailers.
The message being sent by the market is very clear – develop an online/mobile presence so that our shopping experiences are as fast and painless as possible, or we’ll buy from someone else who can. We’re already seeing the response to this trend from macro retailers like Target, Safeway and BestBuy with their expanding presences on Facebook, mobile applications, and location based services like Shopkick and Foursquare. For the mid-size and smaller retailers who are losing the tech-race, the time is now to start implementing solutions like the Accelitec software suite if they hope to close this growing gap and ultimately start winning back a percentage of these sales lost to online retailers.
CKE Restaurants, which owns Carl’s Jr and Hardee’s, has an iPhone/Android app that allows people to check-in at their local fast food locations to be rewarded with a chance to win free stuff. The interface is very clean and at first glance the prizes appear to be pretty substantial, including anything from a dollar off your next soda to free burgers. The Wheel of Awesome, which is also available on both companies’ Facebook pages, is able to ramp up the rewards that an individual is eligible to win based on their frequency of application usage. Once a coupon has been awarded, the winner has 7 days to redeem it by showing their “winning ticket” at the point of sale. This is a great example of a way for restaurants/retailers/grocers to reward their customers through location based services, leverage the functionality of social media, and ultimately increase brand awareness and customer loyalty by applying a simple and fun ‘game-layer’ to what would otherwise be ordinary, everyday coupons.
It was announced this week that Google acquired Zetawire, a Toronto-based mobile payments-focused startup, in August. This is important and revealing news for anyone trying to understand the long-term mobile strategy for the Silicon Valley search engine behemoth. It’s widely known that the latest version of the Google Android mobile OS, known as 2.3 or “Gingerbread”, has been designed to include the functionality of a digital wallet for users to store value; Zetawire is a natural augmentation to the digital wallet because they bring vital pieces like NFC (Near Field Communication) and payments transactions into the fold. There isn’t a great deal of information available on the startup in question, but we do know that they had several very important patents around mobile banking, identity management and credit card/mobile coupon transaction processing - all of which points directly to the idea that Google is attempting to turn smartphones running on their OS into virtual, digital wallets. With Google now officially stepping into the mobile payments and LBS space, retailers need to keep an eye on ways to enhance their business by incentivizing and engaging customers in/around their stores via Android smartphones.
With the release of version 3.0, Gowalla has taken the lead in location based services as “the richest virtual check-in application available”. According to their CEO, Josh Williams, v3.0 is meant to begin reshaping the company into “a socially curated guidebook”, or in other words become a portable summary of things to do, informed by the opinions of your friends and connections on the Gowalla social network. This is a significant pivot for the LBS provider because up to this point they had appeared to be losing ground to Facebook Places, Twitter and Foursquare with regard to user base; this new version will allow Gowalla users to share and aggregate information across these different platforms and provide an “application-agnostic” location based check-in service for consumers. This shift is particularly relevant for retailers to take note of because it represents a major opportunity for them to begin generating brand and store awareness across all of these social media platforms simultaneously. The net effect for these manufacturers and merchants should be an ever-accelerated sharing of data from a consumer to their group of friends and followers, allowing customer reviews, thoughts and opinions to move across the spectrum of virtual friendship at unprecedented speeds. As unbelievable as it may sound, this release of Gowalla 3.0 means that information sharing via the internet and social media just got even faster!
Safeway launched a pilot customer loyalty program this week at 300 of its Vons grocery stores in Southern California, combining location based services from Foursquare and special offers from PepsiCo. The results of this trial will have very important implications for the customer loyalty programs of retailers everywhere; if these three companies can prove out this “check-in” loyalty model, then we should expect to see many others like it across all types of retail.
The most glaring omission from this pilot program is the lack of a digital wallet tied to individual customer loyalty accounts, which would allow for the check-in reward to be processed and realized without requiring the shopper to do anything beyond simply checking in via Foursquare. Ultimately it seems that LBS and customer loyalty programs are a natural fit, but this most recent model is still a few steps away from realizing its full potential.
Facebook has released a beta version of a new form of messaging to a select few of its 500 million users that has important implications for the digital communication methods of retailers. The new platform allows easy filtering of Facebook messages, SMS, MMS, and emails within a personalized “social inbox” tied directly to each user’s Facebook friends. This platform puts a new premium on the delivery of promotional messages that are relevant, timely, and valued, and those retailers who miss the boat will risk losing the communication channel with their users. The traditional methods of mass-messaging to any email address or phone number on record will no longer be effective; the time is now for retailers to start using point-of-sale software capable of collecting and synthesizing data about their customer preferences and segmentation.
Looking for ways to increase their penetration in Location Based Services (LBS), Facebook announced yesterday that they’ve added an application called Deals to their platform. Currently only 4% of online adult Americans use LBS applications to let their friends know where they are throughout the day. As an incentive, Facebook has teamed with 21 businesses (so far) to offer deals to users who check-in to certain locations around their cities; Gap is offering a free pair of blue jeans to the first 10,000 people who check-in at a Gap location on November 5, 2010; Macy’s is giving shoppers 20% off for checking in; REI, Starbucks and 24 Hour Fitness are all offering to donate money to various charities for every check-in at their locations. These rewards are clearly more pragmatic and meaningful than the badges and titles that users on Gowalla and Foursquare have competed for up to now, and should provide greater incentive for the general public to at least start considering the use of LBS. Ultimately, Facebook needs to remove as many barriers-to-use of this LBS functionality as possible; the most powerful delivery method of these rewards will be the user simply collecting and storing their credits in a digital wallet, as opposed to “proving” that they’ve checked in to a store clerk before they can claim their discount at the point of sale. The user could then simply check-in at various locations and the store would instantly recognize their account and provide discounts automatically. What do you think about Location Based Services? Do you use them currently? Would you check-in for a free pair of Gap blue jeans?
This past May, 7-Eleven launched a social media campaign called The 7-Eleven Road Trip Rally, which featured 2 teams racing across the United States for 3 weeks to the Indy 500. They were only allowed to make pit stops at 7-Elevens, and the webisodes all featured challenges that highlighted the brands and goods sold at their stores nationwide. 7-Eleven hired Blip.tv to essentially put together the entire project, and they in turn outsourced the creative content and production of the short films to Happy Little Guillotine Films. Viewers were able to watch up to 5 new webisodes per week, as well as track the teams in real-time on their trips across the country.
By combining reality TV content with social media, 7-Eleven and their partner brands were able to post entertaining videos with their products and services cleverly layered into the content. The next step in the process of engaging viewers with this creative new form of advertisement is making the reality-based webisodes more interactive for everyone watching at home; allow everyone to vote for their favorite team on Facebook and give the winning team extra money to spend during their pit stops; poll viewers on Twitter to decide what they want the next challenge to be; enable everyone watching to “recommend” products for the racers to try at their next stop and reward the people at home with free products/promotional offers from those brands. This hybrid platform of social media and reality TV has virtually limitless potential for brands and retailers interested in product placement – the only question is who will take the next step?
With social media now “fast becoming more popular than e-mail on mobile devices and more convenient for news consumption than the daily paper”, companies and organizations across all industries are competing for social media market share, whether they’re aware of it or not. Brands and Retailers are now able to post hi-resolution images on their pages, which can be very useful for a company looking to engage consumers; Travelocity has already taken advantage of the opportunity and appears to be getting very good feedback from its “Fans”.
Consumer Review/Event Groups and Live Chat Forums are also now possible on Facebook, thanks to the site’s “New Groups” feature. This functionality is practically begging to be leveraged by companies looking to survey, communicate and/or engage their fans. Facebook Questions also falls into this category as a way for companies to talk with consumers at a very base, one-to-one level.
The Golden State Warriors NBA team are a perfect case study in how to turn pedestrian email campaigns into powerful, social media events. Kyle Spencer, the team’s Marketing Director, sent out emails offering fans free tickets to preseason games if they’d log into their Facebook accounts and simply “Like” the team. In total, they sent out 2 emails and increased their visibility in social media by 20% (15k additional Facebook followers). These are some truly impressive results for a minimal capital outlay; with the enhancements being made to the site recently, the only thing standing between a company’s social media marketing efforts and success is its own creativity.
Bing and Facebook have announced a partnership to augment normal search engine results with social media data; the intention is to make search results more personalized and relevant by by combining individual preferences with information pulled from Facebook “friends”. From the consumer side, this technology should be very useful in deciding which movie to see or where to go for dinner.
However, the risks of the Bing/Facebook search and recommendation engine run straight to the heart of growing privacy concerns. Facebook has a record of sharing user information without permission: the Wall Street Journal recently reported that of the top 10 Facebook apps, all 10 had moved user data over to ad companies, and some were even capturing and monetizing information about the friends of those users. This means that combining Bing’s search capability with friend activity could potentially make the social media site even more invasive than ever.
The Facebook experience may be instructive for retailers; as retailers acquire and use customer data with greater frequency, the pressure from third parties to help monetize that data in new ways will increase as well. What’s your take on all of this? Does the addition of friend activity to search via Bing add incremental value to the user experience, or have Facebook and Bing really gone too far? Give us your thoughts!
Last weekend Bi-Lo sent out a College Football-themed text message promotion to 6,000 shoppers in Columbia, SC, prompting them with ways to throw a great tailgate or house party before the big University of South Carolina vs. University of Alabama game. Incredibly, these text messages were opened by 38% of the recipients, all of whom had opted into the mailing list, without offering any coupons or material discounts in their stores. It would be very interesting to look at what the great response in people reading the texts translated to in terms of promotion-related sales dollars, but the number of people who read the message highlights the power of relevant and timely interaction; when retailers can provide their customers with useful information, exactly when they need it, those customers are exponentially more likely to listen and react.
iPhone owners with $.99 can now consolidate all of their loyalty, membership and insurance cards in one place – their smartphones. Scanaroo is available in the iTunes Store and lets users shed the majority of the plastic cards in their wallets and on their keychains with the goal of making life easier and simpler. The next step is aggregating purchasing history data and then allowing complimentary companies to reward customers simultaneously via social media; a member of Gold’s Gym buys a double cheeseburger at McDonalds and gets a Facebook message addressed from their personal trainer offering them a month of free membership if they sign up for a new pilates class; a family rents a movie on Netflix and are instantly offered a special on 2 large pizzas and a 2 liter soda from their local Little Caesars.
According to a recent study by Deloitte, consumers across the country have changed their buying habits and are now more focused on “cutting spending and saving money” than on shopping as a hobby or loyalty to their favorite brands. This trend has led several major corporations like AT&T and ING Direct to acknowledge the paradigm shift and implement new campaigns based around Customer Experience Management (CEM). One example of a CEM initiative at AT&T is customer service reps now answering calls with the phrase “How can I make you feel like a valued customer today?”, while ING Direct has “opened seven cafes around the country” where their financial brokers will whip up double-shot mochas and cappuccinos while servicing your portfolio; all of this is an attempt by companies to connect with their customers at a more meaningful, personal level. As these CEM programs evolve, it will be very interesting to see how consumer purchase histories and individual profiles are integrated into the process of personalized connections between shopper and brand.