Why Apple’s New Patents are Commerce Game Changers?

This week Apple added a new patent (US 8,321,294) to its war chest.  The EasyPay patent is worth a closer look. The commerce patent allows mobile shoppers to activate and buy items from physical stores via the Internet connection on their device.

While this seems pretty clear and reflects Apple’s EasyPay trials:  it is far more profound. Combined with Apple’s earlier patent (US 8,290,513) in October using magnetic fields (as a substitute to NFC) this is clearly is Apple’s showrooming and mobile commerce positioning statement.

Why are these two patents so interesting? One, while the EasyPay trail used QR codes, the new patent definition of shopper is far broader:

“Techniques for improved interaction between online retailers and traditional brick-and-mortar retailers that provide patron-accessible networks are disclosed. The location and/or the fact that any given purchase was made from a particular retailer’s patron-accessible network can be tracked for a variety of purposes. The invention can facilitate partnering between online retailers (i.e. online stores) and traditional ‘brick-and-mortar’ business establishments. As an example, the invention can be used to track and give credit for online purchases at an online retailer that are facilitated by a brick-and-mortar retailer.”

Now combine the two patents. The earlier Apple patent in October was for a Method and Apparatus for Triggering Network Device Discovery. This was Apple way of side stepping NFC and using the phones’ compass output patterns (magnetic field signatures).

EasyPay can be expanded to leverage any network device discovery.  This allows any store shelf or walk-by media to be activated via a magnetic field tap and jump into an EasyPay checkout process. Path-to-purchase becomes “PURCHASE”.

Is Facebook suddenly a 13x ROI ad network?

Facebook in 2012 had a hard time convincing the retail market that it was a mobile commerce player. Facebook opened storefronts with GameStop and others retail partners. They should have been a success. However, all languished and were closed over the course of the storefront trial.

While Facebook may not be the destination that users go to shop, it has proven its value as the preeminent social “influencer” of commerce. Today’s Samsung results vindicate the network and all doubters.

After a three-week, $10 million ad buy with Facebook, Samsung reached over 100 million unique users and generated $129 million in sales! That is a 13x return on a $10 million ad buy.

While these numbers are powerful testament to the social shopping behaviour on the web. Samsung has more than 20 million fans on Facebook and needed to find ways influence their buying decisions. SALES not LIKES drive profits!

Coming out of the tremendous results from Cyber Monday, we know that somewhere advertising and commerce needs to find a closer connection. The market is still in the pursue of a way for sales-driving networks like Facebook (in the advertising world) to connect more seamlessly to commerce conversion network (in the retail world).

PayPal reported a 200% increase in transactions through this past weekend. If Facebook’s reach could be married to a “one-click commerce” checkout, this 13x conversion rate may jump a significant multiple.

In a world where “path to purchase” is a perilous path and we need find ways to better connect these two worlds.

Floor finder. Google Maps Malls! More Big Data!

Big news: Google maps goes indoors: Macys, Home Depots, IKEA. Now pick your floor, your aisle and map.

(Here is me safely found at the Macy’s Clinique counter on the first floor.)

Indoor mapping has always been key to better understanding shopping behavior and marketing in a more targeted, intelligent manner.

Google has partnered with retailers, airport authorities in the United States and Japan. Share floor plans. And I would guess share valuable consumer data!

Sorry Android only. A setback for Apple maps and their data domination.


Ochlocracy? Are Facebook’s libertarian roots eroding?

I was listening to David Kirkpatrick read The FaceBook Effect biking to work this working. The opening chapter is about how Oscar Morales galvanized Colombia against the FARC terrorist group. Hundreds of thousands marched globally off the drum of Oscar’s Facebook page . . .

. . and it struck me as mildly ironic that while Facebook has become synonymous with democracy (a million voices against the “powers that be”), its new Silicon Valley HQ is now at the center of an “anti-democracy” debate.

Facebook proposed this week that it will terminate its community users’ right to vote on changes to site policies. When you give a libertine community certain powers (such as the right to impact the site’s design) it speaks to the core philosophy of an organization.

When the same company says that it is “too big for democracy”, one may take this as a sign that the post-IPO corporate culture is clamping down on what made Facebook a successful social experiment.

I can understand that a corporation may find democracy inconvenient. I can understand that many in this new public company could see this user-based democracy as a slipper slope to ochlocracy.

However, it speaks to Facebook’s libertine roots. It is incredulous to use FARC as examples of The Facebook Effect and then withdraw that same crowd-sourcing element that has enabled the community to grow.

It’s Black Friday @ 5:23 pm. Norman Rockwell, it must be Big Data.

At 5:23 p.m. (not 5:00, not 5:30) Thanksgiving Day ends and the cloud shopping begins. So says eBay data pundits.

Dinner plates are cleared from the table across the Midwest. Mom and Dad switch on the TV and open their tablets to multitask. EBay is at the trigger waiting to fire off mobile-only deals to the shoppers small screen. Let the shopping games begin.

Now the Norman Rockwell scene is complete. After-dinner glass of wine in hand, TV playing some background entertainment and the American family with tablet open and small screen deals at hand. Picture perfect.

From personal work with CPGs and retailers over the course of 2012, it is clear that mobile messaging complement traditional direct marketing channels. Add a mobile message to an email blast and the conversion rates jump 10 – 15 per cent in 2012.

Black Friday is the not the first mobile shopping season but it is the first sign of Big Data and smarter targeting across all the shoppers connected screens. The winners are the folk with the mobile reach and frequency to scrap enough data big to drive smart segmentation: Facebook, Amazon, eBay, Google, Apple are the main players and often the CPGs and retailers are unwittingly feeding them the shopper intelligence necessary for them to grow fat and happy.

Stop. CPGs and retailers have to take this data back. The retail Merchant Customer Exchange (MCX) is an example of retailers getting ahead of the game. A group of more than 14 brand name retailers and merchants have formed a new company called MCX, a mobile payment network that will let customers pay by mobile phone application at participating gas stations, retail stores, supermarkets, and restaurants.

This equals more big data on the consumer. This equals targeted deals and smart shopper marketing strategies. This equals a new world for Black Friday 2013.

OTT needs to go TTM: The New Orwell-Speak

OTT (or Over-The-Top) has been coined as a disruptive term that refers to new monetization services that ride for free (or for little cost) over existing broadcaster and carrier infrastructure.

Is it interesting that incumbent companies (and their executives) that have been adversely effected by OTT services, seem to be happy to use this term at conferences and in boardrooms. These executives have been hoodwinked into promoting OTT as a necessary business evil.

Instead of bemoaning how Apple is OTTing AT&T or how Amazon is OTTing Best Buy or how Netflix is OTTing Turner, the disrupted companies need to own the new words on the street. It is Orwellian: Words are used in his book, 1984, in order to control and censor the language that the public used or more pointedly are not able to use.

In an OTT economy, incumbent carriers, retailers, broadcasters need to change the term. I propose that they need to innovate “Through-The-Middle” (TTM). Carriers, retailers and broadcasters need to take back the discussion and start taking about strategies to leverage their assets “Through-The-Middle”.

  1. Carriers need to talk about the TTM services that they can launch and manage using their communities and billing relationships.
  2. Retailer need to talk about the TTM in-store clientelling trust that is moving shoppers seamlessly into purchase in-store and in-(their) cloud.
  3. Broadcaster need to talk about the TTM assets that are creating seamless multi-screen engagement platforms.

The term is TTM!

Why Obama Won (on Big Data) in 50 words

  • Grew his analytics war room 5x (over 2008)
  • Hired supermarket sales promotions “Chief Scientist”
  • Separated out the data war room
  • Rated consumer persuadability . . .
  • Targeted TV ads
  • Targeted phone calls & direct mailings
  • Targeted door knocks
  • Targeted social media
  • Opened wallets = $1 billion
  • Drove turnout = Swung swing states

Starbucks & M-Payment: Selling an addictive substance on every street corner in America

Starbucks card transactions accounting for more than 25 percent of sales in U.S. stores. $3 billion has been loaded on to Starbucks cards this year. The my Starbucks rewards loyalty program has more than 10 million members, half of whom have opted in to receiving communications from Starbucks. Starbucks recently enhanced its loyalty program in the U.S. and Canada to make rewards fully digital and to make it easier for customers to earn free rewards.

With investment in Square and other mobile innovation, is Starbucks a poster child for other stores to emulate?

I will contend that selling an addictive substance on every street corner in America is probable more of a factor in their mobile success than their technology innovation.

Another factor for their success is their openness to a simple frictionless payment process. Starbucks mobile POS manages prepaid ‘micro’ transactions and thus has the luxury of making checkout painless without much concern for fraud on their system.

Starbucks’ app is a success but other apps in the retail market have languished. The Starbucks app is simple and effective but it success lies in the mass reach.

While MCX and other payment solutions seem to be getting traction with retailers, Starbucks basic 2D scanning system works because of the sheer volume. As NFC-enabled phones are adopted by consumers this year and next, it is possible NFC-based mobile payments will appeal to more companies, possibly even Starbucks. NFC tap and go will inevitably be embraced by Starbucks as NFC is ideal for high traffic, low-value transactions.

Transit and Starbucks are model anchor tenants for contactless adoption.

As Starbucks advocates: pay faster, sip slower.”