Mobile Payments Update

I've been following mobile payments since I worked in the field a few years ago.  It is interesting in a few ways but mostly because I view it as a leading indicator of overall digital transformation.

Paper money will never die but we are increasingly likely to have our phones with us while having no paper money.

The reason retailers want it is for the digital relationship it enables with their customers.  After all, money isn't broken so what is the real driver of adoption?  Buy 10 coffees at Starbucks and get the 11th for free, that's what is driving adoption.

Here is an update on the state of mobile payment adoption:

https://www.clickz.com/mobile-payments-2019-beyond/222602/

Happy Reading,

J.W. Gant

BRotD - Entry 0260 Strategy of Apple Pay

Best Reading of the Day

Mobile payments has been something very close to my professional activities for many years now. I've competed directly against Apple and their Apple Pay product.  Where are they headed now?

Here is a snippet from the piece:

There’s a reason everyone seems to be getting into mobile payments. Thanks to increasing smartphone usage and a push for faster, simpler, more secure financial transactions, mobile payments could become a $3.4 trillion industry by 2022. In the U.S. last year, eMarketer estimated it to be a $49 billion market already.

The consumer options are sundry: There’s Apple Pay, Samsung Pay, and Google Pay; PayPal, Venmo, Square, and Square Cash; bank-backed alternatives like Zelle and Chase Pay; and in-app options through things like WhatsApp or Facebook Messenger. As consumers abandon cash, checks, and even credit cards, everyone is jumping into mobile payments—but perhaps none with the zeal of Apple.

Here is the full story:

https://slate.com/technology/2018/07/apple-pay-can-apple-beat-paypal-venmo-in-mobile-payments-war.html

What do retailers think?

From the start the response was mixed.  Some feel any place their customer is at they want to be as well.  Another, however, stated their mix of credit to debit was such that if mobile pay, primarily funded with credit cards, caused that mix to flip it would be billions of dollars a year lost.  That is big time incentive to work in the space right (they are)?

This is one space with entrenched, well funded and organized interests, and tons of money at stake.  Apple won't see the players in this space fold like the music industry did.  I see this space continuing to be hyper-competitive for the foreseeable future.

Happy Reading,

J.W. Gant

BRotD - Entry 0259 Regulating Technology

Best Reading of the Day

"Robber Barons"

That's what they were called.

In the late 1800s they industrialists who used questionable methods to get rich came to be known as robbers. 

Here is a bit more on that subject:

https://en.wikipedia.org/wiki/Robber_baron_(industrialist)

That is the language now in use to describe Google, Facebook, Amazon and more who have convinced the masses of the population to hand over their valuable personal data for free.  Time for regulations of these giants in technology?  There is an argument to be made.

Read more here:

https://www.technologyreview.com/s/611425/its-time-to-rein-in-the-data-barons/

Here is a snippet from the piece:

When Mark Zuckerberg appeared before Congress earlier this year to discuss how the now-defunct political-data company Cambridge Analytica acquired data of up to 87 million Facebook users without their knowledge or consent, one of the few pointed questions came from Lindsey Graham, a Republican senator from South Carolina. “Who’s your biggest competitor?” Graham demanded. After Zuckerberg replied that Google, Apple, Amazon, and Microsoft all had some overlap with various Facebook products, Graham chafed at the answer.

“If I buy a Ford and it doesn’t work well and I don’t like it,” pressed the senator, “I can buy a Chevy. If I’m upset with Facebook, what’s the equivalent product I can go sign up for?”

Happy Reading,

J.W. Gant

Improving Retail Mobile Apps

Continuing the discussion on retail mobile apps.  I've been in and around this game for many years.  What I see is a new kind of "Tier 1" retailer. 

There's the classic Tier 1, but then there is a superpower level.  That retailer has it all: great retail stores, great mobile app, great online shopping.  Which ones qualify?  Walmart, Amazon, Target, Starbucks .... anyone else?

Here is the story:

https://www.clickz.com/retailers-improve-app-experience/207018/

Here is a snippet from the piece:

Most retail apps leave something to be desired, according to Jim Cusson, President at retail marketing agency Theory House.

“I think of that quote from Field of Dreams: ‘If you build it, they will come,’” he says. “A few years ago, there was this rush to build apps and everyone wanted one, whether it had a true purpose or not. You see a lot of injured soldiers on the battlefield now because companies have invested money in an app that’s obsolete.”

Happy Reading,

J.W. Gant

Starbucks Mobile Payments at 30%

Holy moly!

I was surprised by this one, but then, not.

They do this all so well.  Fully integrated top to bottom and left to right their digital relationships with their customers are second to none.  Full stop.

Here is a snippet from the story:

http://bankinnovation.net/2017/07/nearly-one-third-of-all-starbucks-payments-are-mobile/

Here is the full story:

What makes the Starbucks mobile wallet such a popular option when it comes to paying for that morning coffee?

Mobile payment at the coffee company’s U.S. stores increased to 30% of all stores, according to the earnings Starbucks reported yesterday, meaning just under a third of customers are now paying via mobile.

Meanwhile, Starbucks Mobile Order & Pay transactions increased as well to 9% of all transactions in U.S stores.

Happy Reading,

J.W. Gant

Payments - Wearable Payments Becoming Standard

I have an Apple Watch and have been using it to make payments for years now.  Starbucks, Dunkin, or using Apple Pay at various retailers who accept it through NFC.

Very cool and I always seem to get a reaction from the people around me too.

Well, this is slowly building up and becoming more common.

Here is a snippet from the piece:

It seems like only yesterday the industry first began mulling in-store, in-app and online payments via mobile devices. Now wearables, including smart watches, fitness trackers and other tags, introduce a whole new wrinkle in the space.

The concept of a wearable as a payment system is not new; Wearables enabled with payment capabilities in closed-loop scenarios, like Disney World's Magic Band or similar wearables associated with cruise ships or music festivals, accounted for 82% of wearable-device payments back in 2015. Visa also had a high-profile rollout of NFC payment-enabled bracelets during the 2016 Summer Olympics last year.

Here is the full story:

http://www.retaildive.com/news/study-wearable-payments-on-the-way-to-mainstream/447879/

Happy Reading

J.W. Gant

Digital Bottleneck of Payments for Retailers

Demand.  Meet Supply.

Starbucks is having a problem with its mobile order ahead and pay system.  It is too popular.

Read on:

http://www.salon.com/2017/02/07/a-digital-bottleneck-mobile-payments-breed-new-challenges-for-to-go-retailers/

Here is a snippet from the piece:

Starbucks, which also has a successful mobile-payment operation, has learned that demand for mobile-based orders can overwhelm in-store operations during peak demand hours, causing employees to scramble. Currently, more than 1 in 4 U.S.-based Starbucks orders comes from a mobile device, one of the highest rates in the country’s retail sector and likely to continue to grow. This has led to a problem — a good problem, but a problem nonetheless — and one that’s likely to vex more retailers in the years to come: Mobile-ordering lines are becoming longer.

Happy Reading,

J.W. Gant

Merchant Mobile Payments Leading the Way

This is not surprising to those of us who follow mobile.  We haven't seen game-changing success by tech companies looking to reinvent the way people pay, but we have seen success by individual merchants.

Read on:

http://www.mobilecommercedaily.com/merchants-digital-wallets-leading-the-migration-to-mobile-payments-report

Here is a snippet from the piece:

Merchants are having a bigger impact on shoppers’ payments behaviors and encouraging the transition to mobile compared to universal wallets such as Apple Pay, according to a new report from Mercator Advisory Group.

A growing number of merchants are offering their own branded mobile wallets and incentivizing the use of them through offers and loyalty, something universal wallets have not taken advantage of as much. As a result, merchants are better positioned to change customer behavior and become preferred payment options, according to the report, Merchant Mobile Wallets: Mobile Payments in Action.

Happy Reading,

J.W. Gant

Mobile Wallets at POS and Apple Pay

Business Insider has a great little article detailing some data from a new report on retailers and their mobile wallets.

Just to list a few for those who aren't keeping up, mobile wallets include but are not limited to: Apple Pay, Android Pay, Samsung Pay, PayPal, CurrentC by MCX, Walmart Pay and more.

Read on:

http://www.businessinsider.com/apple-pay-leads-samsung-pay-android-pay-google-wallet-2016-3

Here is a snippet from the piece:

Apple Pay has a comfortable lead in the mobile wallets market.

A new report from Piper Jaffray cited by Investors Business Daily reveals that retailers largely prefer Apple Pay over its major competitors Samsung Pay, Android Pay, and Google Wallet.

The report found that 44% of U.S. retailers either currently are using or have expressed interest in installing mobile wallet readers in their brick-and-mortar stores.

Happy Reading,

J.W. Gant

Starbucks Rewards and Chase Pay

The biggest news is the change to the rewards program.

The move is one away from transaction based and towards dollar based rewards.  So that $2 coffee won't carry the same weight as someone else's $5 beverage.  It will be interesting to see where this leads them to.

Read on:

http://www.mobilecommercedaily.com/starbucks-overhauls-mobile-rewards-program-integrates-with-chase-pay

Here is a snippet from the piece:

Starbucks has made big changes to its mobile rewards program, adding Chase Pay to checkout and shifting how customers earn points in a bid to maintain its leadership role as competition grows.

The coffeehouse chain announced that starting in April, loyalty customers can earn stars and free redemptions based on how much they spend rather than the number of visits. Starbucks is also extending its partnerships by adding Chase Pay to the list of payment options.

Happy Reading,

J.W. Gant

Starbucks Mobile Ordering

Starbucks has gone national with their mobile ordering and in-store pickup (and pay) service.

This is the future of QSR.  It will not be long before all quick service restaurants have some form of this, and fast casual will likely do the same.

http://www.chainstoreage.com/article/starbucks-mobilizes-customers-nationwide

Here is a snippet from that report:

“Bringing mobile order and pay to our customers is about meeting their needs of convenience and customization at any time of the day,” said Adam Brotman, Starbucks chief digital officer. “The fact that it also represents the fastest technology application rollout we have ever done is indicative of the strength of our digital ecosystem, how well it has been received by both our customers and store partners and the impact we think it can have on the future of retail.”

Here is another take on the story:

http://www.mobilecommercedaily.com/starbucks-steams-up-sales-with-nationwide-mobile-order-and-pay-expansion

Happy Reading,

J.W. Gant

Starbucks Loyalty and Mobile Payments

Good update from Starbucks and a good, but quick, read on the subject.

http://www.mobilecommercedaily.com/starbucks-streamlines-app-to-continue-dominance-in-mobile-payments

Here is a snippet from the piece:

As a leader in mobile payments, Starbucks is raising the bar for streamlined smartphone experiences with an update to its application that moves rewards front-and-center and makes scanning easier.

The beverage retailer seems to be the model to follow when it comes to mobile loyalty and payments, and maintains this spot by continually listening to users and making adjustments along the way. Its customers have easily taken to its app for a more convenient checkout process and greater rewards, and its recent upgrade makes the process even smoother with features such as showcasing rewards on the pay screen and a lower bar code for easier scanning.

Happy Reading,

J.W. Gant

Starbucks at 20%

Starbucks has just set a new high bar for a mobile payments loyalty program.  20% of their payments are now conducted through their mobile app.

Wow!

Just yesterday people were paying with cash or check.  Today Starbucks has one in five transactions conducted through their mobile app.  They are the leader in the field.

Here is the story:

http://www.paymentssource.com/news/technology/starbucks-hits-a-mobile-milestone-one-in-five-payments-are-mobile-3021929-1.html

Happy Reading,

J.W. Gant

Starbucks Crafts Deeper Engagement and Loyalty

Two stories about the digital activities of Starbucks are worth your time.  Combined they paint a picture of Starbucks continuing to enhance loyalty and engagement with its most loyal customers.

First up is a new loyalty points capability integrated with Lyft, the Uber ride competitor.  Possibly coming as a part of this, according to the article, is a "lyft" for Starbucks employees who need a ride to work.  Mostly though it allows Lyft users to earn Starbucks loyalty points.

http://www.digitaltrends.com/mobile/starbucks-partners-with-lyft-on-shared-loyalty-program/

Here is a snippet from that piece:

Creating an opportunity for customers to earn points for food and beverages by simply using the Lyft ride service, coffee-giant Starbucks has entered into a multi-year partnership with Uber’s main competitor, Lyft. Using the My Starbucks Rewards program as the core centerpiece of the loyalty program, anyone that takes a Lyft car to a destination can earn those reward points according to the announcement on the Starbucks Newsroom.

Next is news of Starbucks integration with the New York Times, offering articles within the Starbucks app.  I only use the app for mobile payment to the point where I often forget I have a reward.  Efforts such as this one are meant to get people to use the Starbucks app and use it more often.

http://www.mobilecommercedaily.com/starbucks-boosts-mobile-loyalty-program-with-new-york-times-content

Here is a snippet from that piece:

Starbucks is expanding its partnership with The New York Times to bring top daily articles to its mobile application users and reward loyalty members with points when they purchase print and digital subscriptions, reflecting the growing importance of top-notch content for merchants on mobile.

While the beverage giant has previously tapped The New York Times to bring free content to its customers, this marks the first time Starbucks is integrating the partnership with its loyalty program, which currently boasts 10 million members.

Happy Reading,

J.W. Gant

Mobile Order and Pay with Starbucks

QSR is working feverishly to increase throughput via technology.  The concept of order ahead via mobile is one path that is poised to explode and Starbucks is out in front again.

Here is a story on their progress so far:

http://www.mobilecommercedaily.com/starbucks-mobile-order-and-pay-sees-hot-start-aided-by-integration

Here is a snippet from that piece:

In a conference call to discuss the coffee giant’s fiscal second-quarter financial results, Starbucks, based in Seattle, WA, said it is on track to roll out mobile order and pay nationwide this calendar year after the service drove an increase in transactions in Starbucks stores and markets where it was launched. The feature, which will be expanded to more than 600 stores in the Pacific Northwest following its introduction to 150 Portland, OR stores in December, shows how mobile has created the need for a service that that makes checkout quicker and smoother, as the mobile mind shift increases customers’ impatience with lines and long wait times.

“This supports the trend of mobile growth, and specifically importance of in-app inventory (as opposed to mobile web),” said Chris Hansen, president of Netmining.

Happy Reading,

J.W. Gant

Starbucks Goes Digital With New COO

This is very big news for digital, customer engagement, mobile, omnichannel, etc.  Starbucks is going all in with digital with their new Chief Operating Officer.

This article tells a bit about the mobile efforts Starbucks is putting forth:

http://www.technologyreview.com/news/534016/starbucks-bets-the-store-on-mobile/

Here is a snippet or two from that piece:

Starbucks’s mobile wallet is actually a digital stored-value card more akin to its popular gift card. Its success—the app now accounts for 16 percent of Starbucks’s 47 million weekly transactions (up 50 percent from a year ago)—makes it both a model and a target for payment apps from other retailers and tech companies alike.

...

New alternatives like Apple Pay and rival retailers’ apps present challenges for Starbucks. Dunkin’ Donuts, for instance, less than a year after relaunching its mobile app with a new rewards program in January 2014, said it reached two million rewards members and 10 million app downloads.

Here is a piece on the new COO:

http://www.geekwire.com/2015/starbucks-names-former-microsoft-juniper-exec-kevin-johnson-new-president-coo/

Here is a snippet from that piece:

Starbucks Corporation (NASDAQ: SBUX) today announced it has appointed Kevin Johnson as president and chief operating officer. Johnson has been a Starbucks board member since 2009, and will now take a central operating role effective March 1.

Happy Reading,

J.W. Gant

Best Reading of the Day - Entry 0187 Starbucks Social, Taykey, and ASO

Three articles stand out to me and all are worthy of your time.

First, and best, is this little piece on how Starbucks used social media over the holidays:

http://www.mobilecommercedaily.com/starbucks-holiday-social-strategy-nabs-top-spot-on-hootsuites-love-list

Here is a snippet from that piece:

“Don’t underestimate the power of the Peppermint Mocha and its kin: at least on social, Christmas means flavored coffee drinks and red cups. Truly concentrating their efforts on building excitement for the holidays amongst their fans can give brands a big boost.”

That portion on Christmas being synonymous with red cups is very powerful.

Next is a little company you probably never heard of but they represent the next generation in advertising:

http://fortune.com/2015/01/20/taykey-raises-15-million/

What do they do?

For example, if a movie studio wants to target teenage girls who like music, Taykey would have told them last Monday that their target audience was talking about pop star Justin Bieber’s new Calvin Klein ad and instantly purchased ads on news stories, blog posts, and social content about the topic.

If you’re familiar with the story, you know what happened next. The next day the original, unedited version of the Bieber photo leaked showing that the photos had been modified to enhance his, ahem, bulge. Within 10 minutes Taykey’s algorithm picked up on the negative vibes around Bieber and pulled all the ads it was running alongside it. The company helps brands jump onto trends (and, if necessary, abandon them) automatically, targeted to specific audiences across many geographies.

Finally is a little piece on App Store Optimization:

https://econsultancy.com/blog/65980-app-store-optimisation-aso-for-google-play-and-apple-app-store/

I know a thing or two about this having written a white paper on how to drive adoption and usage of mobile apps.  It is very good to keep up with the latest and greatest though so be sure to read this one.

Happy Reading,

J.W. Gant

Best Reading of the Day - Entry 0176 Starbucks iBeacons and more

Very interesting news coming out of Starbucks and well worth the time to read.

Here is the best read of the day showcases iBeacons in use at some Starbucks locations:

http://www.mobilecommercedaily.com/starbucks-cooks-up-ibeacon-strategy-to-support-premium-coffee-emphasis

Here is a snippet from that piece:

Starbucks said it would bring out iBeacon technology in the coming year to allow customers at its premium-coffee Roastery and Tasting Rooms to access information about freshly brewed coffee via smartphones. The move further advances Starbucks’ mobile strategy, in which it is already a leader in mobile payments, at a time of stagnant sales and intense competition.

“Beacons can be a boon for brands, but they can also work negatively if they don’t create a positive experience for the consumer,” said Vanessa Horwell, principal and chief strategy officer with ThinkInk, Miami.

The year of the beacon rolls on.

Here is one more, also from Mobile Commerce Daily, about location based marketing at some Starbucks locations:

http://www.mobilecommercedaily.com/starbucks-asda-use-proximity-targeting-on-mobile-to-drive-in-store-traffic

Here is a snippet from that piece:

Starbucks and Asda are leveraging proximity targeting on mobile devices to raise brand awareness of new products, drive consumer traffic and enhance the in-store experience as part of their ongoing efforts to dominate the mobile space.

With Starbucks mobile ordering officially rolling out for Portland customers this week, the beverage brand is continuing to bolster its growing mcommerce strategy and loyalty platform. A recent mobile advertisement campaign in Britain leveraged location data and Store Visitation Lift for Starbucks and supermarket chain Asda, resulting in a more than 60 percent lift in store visits after the campaign was completed.

Very cool work going on at Starbucks, a brand worth following.  I hear they are also pretty good at mobile payments....

Happy Reading,

J.W. Gant

PS  One more story about Starbucks came out yesterday that I failed to include here, this one regarding mobile ordering and pickup.
http://mobilemarketingmagazine.com/starbucks-mobile-order-and-pay

Here is a snippet from that piece:

Starbucks has launched its Mobile Order & Pay system in Portland, Oregon ahead of the solution being rolled out across the US in 2015.

The system enables customers to place orders in advance of their visit and pick them up at their chosen Starbucks store, and is integrated into the popular Starbucks app and mobile loyalty scheme.

Starbucks is making moves.

Mobile Payments News

Several stories worth taking a look at today.

First, this writer captured his experiences using Apple Pay at Walgreens.  He was required to sign for the payment even after providing biometric proof through Touch ID.  Why?  The transaction was greater than $50.  We still have a ways to go folks.  Here is that story:

http://www.pymnts.com/news/2014/why-did-you-do-this-walgreens/#.VFzDtzTF_9Z

Next is a piece on Starbucks currently holding 90% of all mobile payments in the United States:

http://www.paymentssource.com/news/emerging-payments/starbucks-had-90-of-us-mobile-pay-share-is-just-getting-started-3019582-1.html

Here is a snippet from that piece:

Starbucks Corp., which now handles 16% of its U.S. sales through its mobile app, revealed today just how dominant its position has become even as it plots new features such as preordering.

In 2013, $1.3 billion in payments were made over mobile devices throughout the U.S., and over 90% of those purchases took place in Starbucks stores, said Howard Schultz, the Seattle company's chief executive, in an Oct. 31 conference call to discuss the company's fourth-quarter and full-year earnings (its fiscal year ended Sept. 28).

Today, Starbucks handles nearly seven million mobile payments per week. "No company and no retail store, domestically or internationally, even comes close," Schultz said. "The real growth is yet to come."

Finally

http://www.internetretailer.com/2014/11/06/apple-pay-puts-mobile-payments-firmly-retail-agenda

Here is a snippet from that piece:

At the Money 20/20 conference this week, speakers, exhibitors and attendees agreed: Thanks to Apple, retailers and financial institutions have to think seriously about mobile payments. The next step is to give consumers a reason to change the way they pay.

...

"Apple Pay eliminates any excuse among all players in the mobile payments ecosystem to jump in," Johnson [from Softcard] says. "But payments are just table stakes. We'll be spending 2015 building out loyalty, special offers and other mobile wallet components."

Happy Reading,

J.W. Gant

Best Reading of the Day - Entry 0165 Google's Views on Omnichannel

Google Research is out with a couple pretty good pieces: an article and an infographic.

The research article can be found here:

https://www.thinkwithgoogle.com/articles/3-new-realities-of-local-retail.html

Here is a snippet from that piece:

The relationship between digital and local stores is changing—something we learned from our new Digital Impact on In-Store Shopping study, commissioned from Ipsos MediaCT and Sterling Brands. From it, we identified three new realities of retail: digital drives in-store traffic; smartphones are in-store shopping assistants and varied shopping habits call for a holistic approach to measuring retail success. Savvy retailers are learning how to reach customers by better connecting the online to the offline and by caring less about where a sale happens and more about how to help shoppers convert. Some brands, such as Macy's, REI and Sephora, are already doing so. Find out how.

The infographic can be found in this article:

https://www.thinkwithgoogle.com/articles/how-digital-connects-shoppers-to-local-stores.html

I see nothing ground breaking here as the summary states what we've mostly come to believe in retail the last couple of years.  The rules have changed and the traditional brick & mortar retailer must change with the changing times.

Happy Reading,

J.W. Gant

PS  For another real-world example of this thinking in action look to Starbucks:
http://www.mobilecommercedaily.com/how-starbucks-is-leveraging-mobile-to-drive-holiday-foot-traffic