Black Friday Mobile “Mall Buster”

By Gary Schwartz

As I sit thoughtfully, wedged between Black Friday and Cyber Monday, I have a mobile premonition that times are a’changing.

Black Friday may be becoming Cyber Friday – which would mean a dark Monday for many retailers and malls in North America.

On November 28, 2005, started discussing an online shopping phenomenon following the Thanksgiving weekend that it coined Cyber Monday. After fighting for sale items in the aisles, shoppers starting surfing the web for remnant deals.

However over the past year, Matt Shay and his team at the National Retail Federation should realizing that the online shopping cloud (that was politely situated on a separate day with separate deals for online shoppers) is now disruptively moving into our primetime shopping calendar.

While most mobile shopping on Black Friday still tends to be mobile marketing focused: Price comparison hunting with Amazon PriceCheck, ShopSavvy or eBay’s Redlazer App; Mobile couponing clipping for show-to-save deals that drive impulse door swing into the mall and retail store.

These shopping APPs and mobile web services are great for hardcore price hunters but the small-screen experience is not optimal. The mobile phone may help the shopper better navigate high value items such as shoes or electronics in their local mall. The mobile phone may steer the shopper to a purchase or may rudely interrupt an in-aisle purchase.

But what is beyond price hunting? If a PriceCheck shows a better deal online, many folk are likely to close their phone and choose to buy the item that evening on the web on a large screen in the comfort of their home.

This is about to change.  There is a new breed of shopping disruption entering the market.  Apple’s iPad has hybridized:

  • mobile & fixed internet
  • small screen & large screen
  • impulse & thoughtful shopping

Kindle Fire: The Mall Buster

The new commerce-tablet is a portable mall buster. The iPad allows for an elegant portable internet experience, Apple focus continued to be the APP economy and digital checkout on iTunes.

Other tablets have entered the market on Apple’s terms and had mix results  . . . until the Amazon’s new tablet Kindle Fire. The Kindle Fire is all about one-click commerce. The device is optimized for in-store, in-mall deal hunting, price comparison and most importantly one-click checkout.

Amazon has always been a commerce disrupter. They battled and beat the book store. Now they are taking on the entire mall.

Amazon reinvented book browsing. In 2007, we saw the first Kindle, the harbinger of a new power game and more importantly a new relationship with the mobile consumer. In order to promote its Kindle device, Amazon sold electronic books below wholesale prices.  A tactical loss. Owning the commerce platform was the ultimate reward for Amazon.

Amazon won the book battle: Borders bookstore went out of business and Barnes & Noble opened coffee shops and began selling household furniture.

The Kindle Fire (which combines book commerce with the immersive Kindle experience) is the final commerce frontier.  Amazon is so confident in the commerce that they will generate in the mall that they are selling the unit at a loss ($199 while the unit cost is $210).

Amazon’s One-Click commerce along with VISA’s service, Billing Revolution’s Single-Click and a flood of cloud commerce options will enter the market this year.

What does this mean to the great American Black Friday tradition?

It means that shoppers on Friday, November 30th, 2012 may move from comparison price hunting in the mall to disruptive purchasing in the cloud. No longer are Cyber Monday and Black Friday neatly separated: the cloud is in the mall . . .  to stay.

Dark Clouds

We anticipate over 5000 store closings in 2012 – nearly 40% up from 2011. Many of these closings will be due to continuing shopper malaise; however, as in-mall cloud shopping accelerates, stores particularly in the apparel, shoe and electronics vertical will need to reinvent themselves. They will need to focus on breaking down the channel barriers between their online presents and the physical store. Tackling “cross-channel disconnect” will be key to survival.

Stores will need to focus on the non-Black-Friday days – all 364 of them and work to build a loyalty, one-to-one relationship with the shopper using their phones to bridge the store experience with the store’s cloud experience.

Content curation, sensory experience, customer service and love are all the store has. It will not win on price alone.

Reading Apple’s iWallet Tea Leafs

By Gary Schwartz

Another mobile commerce patent from Apple this week. Surprised? – not likely. This application filed last year and released this week by the US patent office is one of a series of Apple’s NearField Communications (NFC) commerce patents. So much NFC restrained activity from one of the only handset providers that has not played its NFC cards.

It is clear that Apple is committed to become the dominate mobile wallet. It is also clear that iCloud and Easypay services are building blocks towards a NFC-enabled wallet. It is not difficult to read the tea leafs.

Let’s start with this week’s patent which is particularly interesting. Apple addresses the possibility of virtual SIM card to be built into a NFC secure element (SE).

What does this mean? It means wireless carrier beware.

In carrier trials around the world (ISIS, Google Wallet in the US, and Enstream in Canada) the existing SIM that carries the phone subscribers wireless credentials now can host other NFC secure credentials (payment, affinity, data, access keys, etc.). These NFC secure element sits inside the SIM and makes the carrier the gatekeeper to the all credential provisioning.

Of course, this is not ideal for the handset manufacturer and Apple has the annoying habit of challenging existing models.  With this key patent, Apple’s reverses the business model. The SIM sits inside the embedded secure element.  This makes Apple the de facto gatekeeper to the all credential provisioning.

We all know that Apple is a well-oiled marketing machine and never moves a game piece without plotting a win-win strategy.  Everything Apple has points towards becoming the virtual wallet gatekeeper with a full-blown NFC rollout of iPhone 5.

Let’s look at Apple’s three step launch of their iWallet:

Step One: iCloud

iCloud is Apple’s version of cloud data management. It also sets up the company for more frictionless cloud-based commerce.

iCloud’s value proposition is clear: instead of manually transferring iTunes purchases, photos and documents to your devise, iCloud will use the Apple ID to wirelessly sync your files and the progress in consuming a book or film between all Apple’s iScreens. Get it. Love it.

On face value, Apple is untethering their legacy iTune sync solution and opens up a cloud-based sync where all data is held remotely available anywhere across all screens. You can find your phone, find friends, sync data, reunite with old iTunes purchases, keep photos on all of your devices and even bring your entire music catalog. It provides storage and backup. It is the cloud computing dream.

It also allows for any extended commerce that Apple wishes to provision in this cloud to be equally fluid and frictionless.

Step Two: Easy Pay

Apple rolls out its EasyPay payment system in its US retail stores. Taking Apple Stores customer sales to another level, Apple shoppers in the bricks & mortar store can purchase accessories by scanning in a barcode and checking out in the iCloud via their iTunes account.

This is obviously a trial and the scanning is an interim step (much the same as Google’s early tests using QR codes that they abandoned when they finally launched their NFC wallet strategy.)

However, what is important is that EasyPay moves iTunes towards a more terrestrial Nearfield Communications iWallet. Not burdened by the store POS but in the store never-the-less.

Step Three:  An NFC enabled iPhone

If Apple launches a NFC-enabled iPhone in 2012 it can now combine its iCloud with the iWallet and fold the learning of EasyPay.

What do Apple’s NFC patents tell us about their NFC vision?

  1. The key patent filed by Apple in August 2009, ties NFC mobile payments to iTunes payment account. The four million strong iTunes community is Apple’s largest wallet asset.
  2. Apple has added promotional patent elements including iCoupons and the ability of the NFC phone to read a tag on a consumer product in order to obtain a benefit provided by the manufacturer or retailer. This expands the wallet functionality beyond payment, which is key to monetization.
  3. NFC then permeates the iCloud: Apple has filed patents to NFC enabling remote services such as iPod, iPhone, Apple TV to be paired via NFC to keyboard, camera, printer, and remote control.  Apple also filed patents around using NFC to transfer files between these devices.
  4. Finally and practically Apple has drafted a design patent for phonetop e-Wallet icon.

An icon that we will likely see on our phonetop quite soon . . .

Conjugating Mobile: Facebook As Big Brother?

By Gary Schwartz

The litmus test for the success of any mobile technology is our ability to conjugate nouns and verbs around its products and services. A loving sign is when nouns become a verb and we “Google”, We “Skype”, We “Facebook”, We “TXT”. There seems to be a direct business correlation between becoming part of your consumer’s vernacular and the stock price of the originating company.

Some companies are being proactive.  They are positioning their company for success by making their products and services more verb friendly. Perhaps product marketing teams need to spoon feed marking terms to the public: We “Tweet”, We “Like”, We “Check-in”.

In September 2011, Facebook took this spoon feeding to an entirely new level. At F8 in San Francisco, Facebook’s expanded their one dimensional LIKE vocabulary that has dominated the web. In an attempt to move from she LIKES to he LIKED to they BOUGHT, Facebook has cranked open the commerce dictionary.

We all know that web commerce and communication tools are very Orwellian. Words control actions. Words expand or limit our shopping behavior. Like a well-oiled Orwell Big Brother, Facebook published new mobile commerce words and actions that it called F-commerce. It is a new grammatical system that allow the mobile shopper on TABs and handhelds (oh and PCs and TVs) to buy better.

Facebook kindly published an image of the “Social Commerce Grammar Lesson” on their blog for late night study sessions. Here is a snap shot of their primer:

There are ACTIONS and OBJECTS (AKA VERBS and NOUNS). Verb have been expanded from LIKE to BOUGHT, WANT, OWNS, HEARTS and these verbs can now be added to nouns such as JEANS, CARS, WATCHES, SHOES.

So CONSUMER + ACTION + OBJECT are now a social linga franca for web commerce. Instantly publish desire to your friends. Hannah Schwartz hearts Steve Madden pink shoes at Blommingdales Susan Frank wears Prada from the Guilt Groupe.

Facebook’s blog explains:

“When an action is published, the activity can appear in the user’s News Feed  . . . So when a user is shopping, buying, or wanting in the local store a new pair of shoes, jeans, or car, she can publish this activity  . . .”

First there was TXT

The mobile technology landscape is action packed with colorful language. It seems indicative of the social nature of the channel.  Ten years ago, the 160 character constraint of the txt message birthed a generation of initiatisms, acronyms and abbreviations.  These coded words were strung together by whatever grammatical glue would hold the idea together.

But the goal was not to write. The goal was to send an idea, flirt, info. A generation of instant messagers sent more smiley faces than punctuation. Sexting, Toothing, Connecting has turn the messaging channel into a global secret society generating trillions of one line messages a day. Until the ripe old age of 55 folk are texting more than calling. What is the adage? “A pictogram is worth a thousand words” 🙂

Over the years the communication and information channels have proliferated. Nearly all our mobile consumer behavior can be conjugated through these channels in natural English. This new instant communication code (according to research done by Dr. Nanagh Kemp of University of Tasmania) has a strong grammar and phonetics structure.

However the various channels dictate meaning. The choice of channel itself dictates much of the meaning. Building on Ryan Copeland oft-quoted tweet: “Twitter = I need to pee. Facebook = I peed! Foursquare = I’m peeing here. Quora = Why am I peeing?”, we could extrapolate that the word SHOPPING can be conjugated across all the channels:

  • Twitter              I need to shop.
  • SMS                 It’s a good time to shop.
  • Facebook         I bought.
  • FourSquare      Here’s where I bought.
  • Quora              Why did I buy?
  • YouTube          Watch me wear.
  • LinkedIn           I’m a professional shopper.

The channel also dictates rules of conduct.  For example hash tag etiquette allows for one but not multiple hash tags in one tweet.

What don’t we conjugate is as important as what we do. We don’t “QR Code” or “scan me”. That is not in our vernacular. We don’t “APP”. These are not communication channels so they don’t conjugate well.

Mobile language will continue to expand as shopper increasing adopts and adapt these channels.

Facebook Rules of Engagement

However, is Facebook’s Social Commerce Grammar Lesson an attempt to control social actions on the increasingly commerce friendly web. Is their action and object framework a brilliant evolution of the LIKE button allowing for consistent experience across the web or is it a way of controlling and targeting their user base?

What is clear is that if the solution that wins is the one that consumers adopt as their shared language; Facebook is strides ahead of its competitors.

Facebook will win if you hear your girlfriend WANTS some GUCCI SHOES  from S5A.. . . Facebook hopes you will not need to “Google” for presents this holiday.

BlogWorld LA: Today’s Challenge Reaching the Mobile Consumer (VIDEO 2.5 mins)

GenConnect’s Kelly Hayes and Gary Schwartz discuss the book, The Impulse Economy: Understanding Mobile Shoppers and What Makes Them Buy and the difficulties of interacting with consumers in a mobile world.

“Mobile is a very disruptive force. It has reinvented a lot of businesses in ways that potentially they are not so excited about,” Schwartz says in the video. “Now the consumer is absolutely independent and they have their own ways of interacting. It’s not push anymore. It’s very much pull and . . . throw into a social network. So it’s much harder for brands, retails and anybody in that value chain to interact with that consumer anymore and that’s a big challenge.”


Book excerpt: Chapter One of “The Impulse Economy”

Mobile Marketer Post. Chapter. 1 of The Impulse Economy

Little Store on the Prairie

Your local store manager will tell you that there are two types of people: those who go to stores to buy specific items, and those who go to stores to shop. The history of retail, starting with the country store and moving to shopping malls, the Internet, and, more recently, mobile storefronts, is the history of following and serving these two types of shoppers.

Brand marketers and retailers compete for mind share. They woo their shoppers by price and brand affinity. These retailers also have segmented shoppers into groups that have profiles, patterns, and names: Alexa drops into the store for an item, but will browse opportunistically for other products. Suzy is self-directed, has a weekly shopping list and a mission. She motors down the aisle and out the store. Marge is store-directed and wants information on products first.

Marketing departments map the shopper’s journey through their stores. They optimize the store layout and the shelf design. The US retail chain Target calls them “guests,” Wal-Mart calls them “customers,” and the clothing store Hot Topic calls them “friends.” Using Kroger’s new mobile handheld, the supermarket chain’s marketing department can see shoppers as icons moving pixel by pixel on a master store diagram.

Despite all the science, shopper marketing is a black art. Shoppers have what Ginger Kraus, vice president of brand activation at PlayStation, calls a “subsense,” making decisions based on impulse and lifestyle. Each time that shoppers select a game console, walk into a fast-food restaurant, or reach out in the aisle to select a hair care product, there are a myriad of factors behind each decision.

What are the key factors that influence shoppers’ behavior? How can marketers better understand shoppers? Finding the answers to these questions is what keeps brands and retailers up at night. To attempt this, we first need to understand the shopper’s store and how it has changed over the past 120 years.

The Store Is A-Changin’
In the mid-nineteenth century, retail was a farmer’s market. There were no stated prices and no customer satisfaction policies. The arrival of Main Street, with a concentration of shops and merchants, changed this model, and we saw prices and policy change almost hourly. By the time that Richard Sears appeared on the American retail scene in the late 1800s, the storefront had evolved to offer fixed prices and satisfaction guarantees with the promise of exchange or refund. Armed with these modern retail practices in place, Sears set out to build the modern store.

Indeed, Sears was instrumental in advancing the American shopping experience. Follow Sears, and you follow the evolution of the store. His success in retail was built on three principles: limitless shopping, self-serve shopping, and accessible shopping.

1. Limitless Shopping
Richard Sears knew that American farmers typically bought supplies—often at inflated prices—from the local general store. Back in 1888, the first Sears catalogue provided a universal resource that clearly stated prices on a wide selection of goods. Consumers knew what Sears (then known as the R. W. Sears Watch Company) was selling and at what price, and could order goods conveniently without repeated buggy rides to the shop.

More important, Sears was no longer confined to a physical bricks-and-mortar presence. He could sell through the catalogue and was not limited to only what was in stock or on display in an aisle. For the American consumer, Sears quickly became the way to shop, and the catalogue became the “Consumer’s Bible.”

2. Self-Serve Shopping
Clarence Saunders brought the next wave of retail innovation when he moved the self-service efficiencies of the Sears catalogue back to the physical store. He patented the concept of the self-service shop and opened his first Piggly Wiggly grocery store in Memphis in 1916. Self-service made the store more cost-effective. Prices talked, and seven years later, there were 1,300 franchised locations across the United States.

In 1925, Sears, Roebuck and Co. followed the wave of retail chains opening across America by opening its first retail store. This was a far cry from the frontier general store concept that Sears had attacked successfully just a few decades earlier. This time the store was chock-full of modern efficiencies that would be further fine-tuned by Sam Walton, the founder of the Wal-Mart chain, later in the same century.

The stores were a draw, but the Sears catalogue continued to play an important role for shoppers. Specifically, Sears continued to use the catalogue as a way of dealing with the fact that aisles are limited in space and not always fully stocked. The catalogue provided shoppers with an always available list of goods that they could peruse, purchase, and have mailed to their doorsteps.

3. Accessible Shopping
On November 27, 1995, Nathan Myhrvold, Microsoft’s corporate visionary, wrote a memo to chief executive officer Bill Gates* warning that the Internet would allow companies to communicate directly with their end customers in a cheap and easy manner. This was a new retail model, he emphasized, and “it threatens the role of the middleman or pure merchant that traditionally sits between the large manufacturer of a good and the final customers.” Myhrvold told Gates that he could no longer focus on selling software shrink-wrapped via Egghead Software; that this would become “quite ridiculous from an economic standpoint.” Gates needed to consider a new model, a “‘virtual Wal-Mart,’ which presents goods directly to customers on the Internet, or via Internet catalogue kiosks in physical store locations.”

Myhrvold’s Internet was a natural extension of the shopping experience that Sears had revolutionized with the release of its first catalogues (although Sears may not have initially recognized it). In fact, the Internet has returned Sears to its roots. The website mirrors the universal principals of shopping that Richard Sears advocated in 1895, when the catalogue had expanded to a hefty 350 pages of deals, more than any other approach. In many ways, the Sears catalogue was the World Wide Web for the frontier consumer, and it continues to be that destination today.

This is because the Internet allows the Sears catalogue to be clickable. However, early prototypes of the website had few clicks. The first e-storefront was literally a cut-and-paste of the catalogue. As the digital store evolved, designers adapted bricks-and-mortar metaphors, such as the “shopping basket” and the “check out,” for the web. The result was an ergonomically friendly click-through shopping experience.

Meanwhile, Wal-Mart efficiencies in the supply chain chipped away at the margins achieved by bricks-and-mortar stores across the United States, a phenomenon that quickly went global. Against this backdrop, Sears and other chains moved commerce into the cloud, chasing first movers such as and Yahoo!

The result was a hybrid model that brought together the concept of the limitless catalogue with the experience of in-store aisle roaming. Similar to shoppers who stroll leisurely through shopping malls, online shoppers had time to think and browse before they made their purchase. They cracked open the laptop late in the evening, when the kids were asleep and the dog was tucked under the chair. They had time to save their choices to a shopping basket. And they had time to do much more than just shop. They could compare prices, hunt for recommendations, e-mail their picks to friends and family members, and check out hours or days later.

Today limitless shopping, self-service shopping, and always accessible shopping are the hallmarks of the modern shopper’s experience. The new Sears, like the old Sears, is not one destination; it is a menu of shopping options. Sears’s “Shop your way—buy your way” approach is shoppercentric.

But does this make the physical store obsolete? “No,” says Brett Bonner, who heads up store innovation at Kroger. “The history of the store is like a pendulum. The catalogue and, more recently, the Internet have offered alternative shopping channels to bricks and mortar. But we always return to the in-store shopping experience. We have incorporated this learning back into the store. It is the anchor.

“People forget that families used to get dressed up to go shopping,” explains Bonner. “The store was the entertainment center of America. We thought that we would lose this to the catalogue and the Internet, but it didn’t happen.” In fact, he contends, the “pendulum is swinging again.” This time it is paving the way for digital efficiencies to be reintroduced into the physical store experience.

Enter the Mobile Phone
As we review the many forms of retail that have emerged over the past 120 years, no one could have foreseen the rise of the m-shopper and the impact of mobile on the store. This new breed of consumer is using the mobile phone in the physical store to select products, research purchases, and act on deals and coupons at the point of decision.

This shopping revolution is in full force. While some in the retail industry recognize that the m-shopper has arrived, few have strategies in place aimed at capturing the m-commerce dollar. Misguided mobile web designers are working hard to adapt online shops and commerce functions to the constraints of the much smaller mobile screen. This approach overlooks the fact that mobile is more than just another screen. In fact, one of the reasons that mobile commerce is perceived to be underperforming is not because m-consumption has not arrived or failed to ramp up. To the contrary, m-consumption has arrived and is thriving. Our mobile commerce models are simply flawed or embryonic.

Cookie-cutter online assumptions to mobile don’t guarantee revenue or conversion. While mobile presents a world of retail commerce opportunities, it can also be ineffective and underwhelm consumers. In some extreme examples, the experience can actually hinder shopping. Indeed, shoppers with their noses glued to the screen of their mobile phones shut out opportunities to engage effectively with the product. What’s worse, mobile can even interrupt the shopper’s purchase of this product.

However, if leveraged effectively, mobile enhances the shopper experience by allowing consumers to be open to impulse product selection in the aisle. We’re already seeing the implementation of successful mobile services that overcome device shortcomings and free the shopper to be less nose-to-screen. In fact, new technology will allow shoppers to be completely un-tethered and 100 percent impulse driven.

Mobile is entering the in-store environment at a time when our idea of the store is changing dramatically. As we stroll, head bent,  nose-to-screen, down busy streets and navigate the store aisle using peripheral vision, is the phone a homunculus guiding our shopping behavior, or is it a distraction, interrupting the design and the role of the store? This raises some interesting and critical questions about the future of retail. Some suggest that the historic fight for real estate in the store may ultimately trigger a flight of consumers from the store. Will the retailer’s adversarial relationship with brands end up encouraging brands to pursue direct relationships with shoppers via their handheld devices? Or will mobile help make the retail store more efficient and relevant to the modern shopper?

As we debate this, we face many challenges. Few industry insiders recognize the difference between a portable device and a mobile device, let alone how this affects the shopping experience. Even fewer recognize and accommodate the impulse-buying habits of the mobile shopper. And still fewer are generating anywhere near the potential revenue or reward that this new commerce platform has to offer.

It has the potential to become a perfect storm. Just not yet. That is what this book is about.

Copyright © by Schwartz Family Trust from THE IMPULSE ECONOMY by Gary Schwartz, Published by Atria Books, a Division of Simon & Schuster Inc.

Gary Schwartz is CEO of Impact Mobile, Toronto. Reach him at