iPod Register I recently caught a short article in The Economist on how Nordstrom’s and Macy’s are using mobile in the shopping mix. It’s a good reminder and again points to a radical change coming in the way we see POS or point of sale terminals. Mobile solutions are replacing static registers while also making it easier to present the right product to the right person in a way that delights them (see iBeacon). In contrast to the Visa PayWave (see also this) I’ve written about , Nordstrom demonstrates how inventory, online and in-store can begin to empower their assistants to really begin to build a shopping relationship with me. From having a product/upc scanner in the pocket to knowing what other sizes are in stock, or taking my payment there and on the spot. Soon the customer will be able to do this all too and that will further improve the relationship. It may not be long before you sign-in to the store with Facebook and then it remembers.

In this change to moving service and payment to small personal devices, it is easy to miss other new benefits that may emerge. Customers are served where they shop. Registers aren’t left unattended. While customers don’t like to be stalked, assistants are now armed with a helpfulness device.  Now that connection is the new learning on how to get what you want or pay the money. Rather than just wanting to ring your sale up, they can find inventory and answer other questions. Assistants also clear up, or hang up stuff rather than having a traditional register place that is a mess. Choreography changes. Along with stock management, just another way to avoid more markdowns.

Nordstrom’s newest stores have more mobile devices for accepting payment than fixed ones. With them, salespeople can tell, for example, if a customer is close to an upgrade, which would entitle her to such goodies as free alterations to clothing. She can then be encouraged to claim the benefit by buying a little more. Nordstrom’s grasp of inventory is good enough that shoppers can check online whether an item is available at a specific store.

One of Macy’s tricks is to use its shops as distribution centres. This expands choice online and prevents stock going unsold. An unwanted coat in Boston can be shipped to a shivering shopper in Boise. That sounds expensive but “if you can prevent a markdown, that covers a lot of shipping costs and satisfies the customer,” says Karen Hoguet, Macy’s finance chief.

via Retail: Hard knocks | The Economist.

See more:

 

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I’ve heard many times over the last few weeks that Vodafone has a “good” network. That may trace to the ad below. The term ‘good’, in my western eyes, has a certain definition – but here, in India, it may not always work and may still roll back to 2G/Edge.  ”Good”, is enough to change lives. Despite the shortcoming I may see, for users in India it is real progress.

In my view, India is just hitting the tipping point in large cities, where 3G seems to be the next step (desire) for every college bound student. Being connected is simply essential for their progress. Cool kids currently seem to be using Vodafone and if the ad is to be believed, Mum is still chasing them and they don’t ignore her!

When you catch up with friends or rush to a meeting, when you whisper to your sweetheart or call your mom to say you’re alright, our network’s always there to help you along. Made for uninterrupted conversations, for crystal clear voice, for superfast internet and for the widest reach – it’s the network that’s made for everything.  via Vodafone Network | India.

Vodafone is also the prepaid network I use when in India and so I’m always renewing and getting reacquainted with my plan options. This time my 1gb 3G dataplan valid for one month cost me Rs.251 or about USD4.00. I use this opportunity to visit both product retail and carrier stores working to piece together a broader picture of what’s changing and contrasting it with what I know back home. These are a few of the things I’ve observed from retail and advertising.

  • Android phones are now significantly cheaper. The sweet spot seems to be Rs.6000 to 8000. There are some cheaper, and many more expensive ones of course. The same price of a plain feature phone two years ago.
  • 3G data plans continue to drop in price although remain significantly more expensive than 2G/Edge plans. Example prepaid 2G Rs.125 (USD2) for 2GB valid for 30 days. That would buy your 300mb under a 3G plan. Rs.251 will get you 1GB for 30 days currently.
  • Big is generally seen as better. Screen sizes are getting bigger. And bigger.
  • All the stores are focussing on low-end Android phones, smartphones and less and less on feature phones. It is where the buzz seems to be, and many retailers say feature phone sales are dropping. “Good enough” means they might compromise a little on the screen size, as an Android is better than no Android.

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Croma SmartphoneI find it very hard to see value in expensive Android handsets today. Perhaps I should extend that to any handset and OS. The question for Android appears to be; does the brand matter?

Looking at the myriads of Android handsets (priced Rs.5000 to 8000) now available in India you see attempts to play down branding, unless you’re Samsung, LG or even a Nokia. Here’s an example. This Croma (a large electronics chain like Best Buy) Android phone has no branding on the front face. Most follow this trend. The plastic back has limited branding.  If the owner is even worried about being seen to carry the wrong brand they can easily cover it with a case (many cases just their hand). Then no-one can determine what Android anyone is carrying. Android has been an equaliser. What makes one Android phone different from another are a few hardware specs, the Android OS version and after purchase, only the owner will know, which brand it is. For much less than $150 I can have the latest Android jellybean, a good screen and 5mpx camera.

Android is now the brand of phone and tablet you buy in India today.

The same picture exists with Tablets. As perspective, Croma sells a tablet too (approx Rs.9000). Great spec, looks good. In fact you can even put it to your ear and use it as a phone. This tablet represents the possibility of an always on computer in a country where WiFi and broadband connections at home are high cost extras. The  expanding phablet, tablet, adds a new challenge to the desktop/laptop and perhaps how students access computing. This in a market where budgets are constrained and network connections and bandwidth help make choices. There is clearly a lot of choices in flux.

An observation: when Android becomes the brand, there is less scope for differentiation among handset manufacturers. A critical question to ask as a purchaser is will this software in my current purchase be upgraded, or am I better off buying a new hand-set in a year’s time? Which increasingly means, should I not bother with the high-end smartphones running on Android?

 

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BurberryApple has announced the hiring of Angela Ahrendts, soon to be ex-Burberry-CEO, as their SVP Retail & Online Stores. A few weeks ago I wrote a post on what the job spec should include. I listed five key areas that will determine success and drive the hiring choice. I had a big vision in my post and my conclusion is I expected more. Follow the link to the post, to see the challenges I laid out for this position.

What the new SVP Retail job specification should include:

  • Global Retail Vision with Emerging Market Understanding
  • Simplicity – Elegance – Experience – Brand Champion
  • StoryTelling Required
  • User Experience Design – Pocket Retail
  • Payments Innovation – Platform for 500 million Customer stores

The announcements recognize Ms Ahrendts’ emerging market success, and the branding story that Burberry has told over the last decade. When it comes to online strategy applicable to Apple I’m less certain.  I trust she will bring something new to Apple. In any case we aren’t going to know anytime soon whether the choice was brilliant or flawed. Look to Apple’s execution at retail over the next year to tell the story.  Biggest risk? Apple doesn’t progress and accelerate their Pocket Strategy.

In any case, congratulations today must go to Ms. Ahrendts, for landing the most interesting and challenging job in Retail.

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IMG_0208She doesn’t read or write. She carries an old very basic Nokia and “speed-dial” has been programmed by a friend to connect her with the key people in her life. Her family and her employers. At first, most of the calls just came to her although these days she is making many calls herself. She’s a maid in Mumbai, and has learned her life is easier if she makes a simple call to say I’ll be late, or not coming today.

She doesn’t really think much about a new phone in her future. Most likely, if she got a fancy one, one of her sons or someone in her extended joint family would take it, even though she is the primary bread winner in her family.

The family is unlikely to see many of her little advances, she has a wallet now and carries a purse. More recently she started traveling on the train in first class and despite taunts about how she doesn’t fit in from other first-class passengers, she is standing firm. Her life is not one of many comforts although she now has a TV and fridge at home. Her days are long, with 2 hours each way on a train just getting to work and back.

Ask her about what she might like in a new phone and she struggles. While it is essential to her today, she isn’t constantly thinking about trading up or what’s next. In that regard she’d probably prefer to buy some more gold jewellery, a new sari, or a cooking gadget.  Thinking about a new phone, she’d like to have music (FM radio) and you might expect a camera to take photos of her new grand child although this is not stated. Underlying the comments is a sense that the camera phones she knows are difficult and the magic they provide is perhaps scary. She doesn’t like being seen to be the fool or not knowing how something works. In this, her old Nokia gives her comfort. In her life she’s traditionally been handed down the spare or old phone. In similar cases she may be given the cheapest phone possible by an employer for the employer’s convenience.

With this context in mind and forgetting whether or not she can afford the Rs.6000 smartphone (vs 1200 for a dumb phone replacement), could a smartphone even change her life? I suspect it could although few have been given the opportunity to try it out and experiment. The key things to suspect they are interested in are…. Camera, Music, and key contacts. Video/TV will be attractive however, data plans aren’t assumed here and are beyond the budget. The whole SMS and Notification area is potentially very confusing. However, with time she might like voice messaging, and even a Snapchat. I won’t assume anything about games, or even learning tools. I suspect a smartphone astutely set up (meaning keep the home screen simple) could take her further although she won’t trust it for making payments anytime soon.

I’ve watched both young and very young babies ask for iPads, and  watched seniors adapt to smartphones even when they struggled with email and a PC in the past. The visuals and touch make it easier to adopt. It is easier to understand the layers and remember how you did it the last time. It may be a few years before the aging housekeeper gets her first hand me down smartphone. The young maid will be quicker to wish for one, likely driven more by intimacy and sharing than some of the other features. Then as WiFi expands in many of the places they venture into, even video calls may happen and take on new meaning and delight.

There is little point wondering whether or not the touchscreen SmartPhone UI needs dumbing down for someone that is illiterate. Keeping the stock iteration simple helps. The reality is the hand-me-down or used smartphone is most likely to be the one that falls into their hands. That day will be very interesting for them. Then they have a device that may help and entertain them in ways they never thought of before and connect them in new ways. Importantly it will expand their personal and private space as this more powerful device may remain the only thing that they personally really own.

It is humbling to believe that while the early mobile phones put new tools for life and economy in one’s pocket, the smartphone may actually do a better job of building stature, poise, worldliness. When a device becomes empowering in new ways, then people grow. It’s worth continuing to ask the question. How will the smartphone empower the maid? Also worth noting how could it change her relationships with the world around her?

 

 

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Mochi MumbaiI’d like you to meet the local cobbler or ‘mochi’. He will repair your shoes for a few US cents. His business is established (street side) and he has a couple of stools and the paper so his customers or his friends can just “drop-in”.  While watching him, he took a call, pulling his quite dirty old Nokia out of his pocket. A headset was attached very twisted and, as he fumbled with it, he answered the call.

I’m fairly certain the cobbler doesn’t desire a smartphone tomorrow. A music phone, yes. His business is good enough that he could probably afford one and may have already bought one for his son or daughter. For him, a call is enough and calls coming to him don’t cost him money although those calls and his availability may help him make money.

So is our Mochi the smart phone user of the future or not? I suspect traditional items (lights, a fan, TV, refrigerator) are higher on his list of purchases. And putting money into his children’s education. The smartphone likely remains both daunting technologically, and represents a luxury item. For entertainment (if he even finds the time after getting home around 10 pm) TV provides a better option. He might like games but has little experience so he remains quite happy with his Nokia with FM radio onboard.

He represents a real smartphone challenge. One I’ve not seen answered. The smartphone doesn’t appear to provide him with an economic advantage. Even as smartphones evolve towards payment device he will continue to prefer cash payments.  His little street-side business has no collection or delivery function. By contrast the ironing man or Dhobi finds his phone makes pickup requests easier. A larger store takes phone orders and sends them home. Even the rickshaw-walla will tell you his phone makes for better business.

Observing the Mochi and his behaviour made me think.  The sweet spot for creating value out of a smartphone is in it helping the small businessman or entrepreneur, the petty trader, or the skilled labourer, be in the right place at the right time. Being networked, where networked economies improve both service, efficiency and build relationships may create a value equation where the bottom of the pyramid begins to embrace the smartphone.

However, there are some pre-conditions to make this happen. The majority of customers must have a smartphone and the business must have some form of service / location dimension that puts our BOP (bottom of the pyramid) at the right place at the right time to make more money than they might have before. I feel an example like Uber (now testing in Bangalore) may well spread in time. To participate you must be part of a crowd-sourced economy, the transaction setup driven primarily by notifications and or relationships.

The local street Mochi isn’t ready for big data, doesn’t have digital information to share across devices. He’s still set up for a world in which business comes to him. It would be nice if the smartphone brought more although today it appears that it is still the phone call that is most useful to him.

Realistically, we are also many years away from the point and time where taking payments electronically becomes attractive or mandated for him.

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Pay with AmazonWhile the headline for the linked post below is “Amazon challenges PayPal with new ‘Login and Pay’ checkout service for online retailers”, the article understates where Amazon can take their new payment approach. Amazon’s proposition to users is simple. You trust us, when you buy and then pay us. When you buy elsewhere use Amazon to make the payment and we’ll save the details. Amazon will legitimize many small retailers with this move and remove the dreaded one-time account set-up or guest sale. From a customers POV if I do business with Amazon and now with Online Retailer X then the action (which I’m now used to) is like Facebook Connect although now uses my Amazon credentials to pay. That may also imply more legitimacy for the retailer than the PayPal payment system.

See the example and then see my list of why it can go further.

Amazon apparently thinks now is the time to make its most aggressive push yet in challenging PayPal and other online payment services. Using its widgets and APIs, Amazon says online vendors can now “replace guest checkouts with recognized customers,” which will help retailers track orders, purchase history, offer special discounts, and more.  via The Verge.

Amazon is making this move to assist other online retailers with account details, payments and shipping. In itself this can really evolve in many directions. What intrigues me more is the implications this may have for taking Amazon payment systems into the real world of physical stores.

  • As Amazon already has an app on millions of mobiles a simple iBeacon could wake the Amazon app in any store and present the physical retailers offers or when appropriate the “Pay with Amazon” button.
  • Amazon’s capability to extend and share profile data, may also make the new payment affiliate more money or increase sales.
  • Equally sold items could also build up an online store under the Amazon umbrella over time.
  • Similarly, when someone has an item in hand and a complementary item that is not stocked in the store may be appealing to the customer Amazon could offer that item there and then. The store gets a commission on the online sale from their location.
  • With the right payment structure Amazon could go further. There’s
  • There’s no reason why my Amazon account isn’t also used to pay for a restaurant meal or gas in the future.

There’s an API for developers and more details on the payment structure here. Ultimately, reducing friction in making payments and lowering the cost/commission on payments will determine how successful Amazon is.

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AlphaThe $100 price point was once a big deal for the PC (One Laptop Per Child). $100 was also the point of reference for the Smartphone. That’s the price (no-contracts) where people said they would start taking over the world. The facts don’t yet support this in countries like India. Feature phones outsell smartphones in India by almost 10 to 1.  There is certainly a blurring of functionality offered between feature phones and low-cost Smartphones. And the proliferation of feature phones below the $80 mark, with basic internet, wifi capabilities.

Yesterday found me in Vileparle and the famous Irla street in Mumbai. That’s where Alfa 2 is. This store has been known as the biggest retailer of phones in Mumbai for a long time. It is certainly still busy although the whole locale now is loaded with similar retailers and almost any model you could want.

Can you buy a $100 smartphone today? Yes. Here’s an example.

Samsung Galaxy Music Duos S6012.  Sold with Android 4.0 and listed with an upgrade to 4.1. It has a 3 inch display is 3G ready. Price seen Rs. 6499/- or a little over $100. A little limited with a small screen and low end camera, many would have loved this phone a few years ago. Today, it looks a little dated.

This low end Samsung Android phone is effectively challenging the Nokia Asha series of Feature Phones. While Nokia feature phones start at Rs.4500 the best were a similar price to this Galaxy, although the Nokia may have a better screen and camera but no 3G etc. There remain many trade-offs and compromises at this price point from a premium smartphone user’s POV. Still, many would love to have a smartphone at this price, although I suspect they want a bigger screen. Many of the Indian brands are also offering the latest Android and better specs for similar money. There is still a 3G 2G trade-off on some devices at this price point and 3G is not yet everywhere in India.

SonyEvery store you walk into also confirms visually the “Big is Better” impact. One of the hard things to work out is which one is actually better  as they look so much alike. From Rs.8000 to Rs.12000, there are many many handsets that fit this bigger better mold. There are likely many theories why. The emotional, the practical.  I have my theories.

There appears to be an innovation opportunity that these larger screens present. I’m not sure Apps or the specs really allow this opportunity to emerge.  As an example I’m not sure running four videos at once on the same screen is really useful although I got a great demo from the sales guy who seemed to believe it was a great selling point!

 

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Nokia Asha RangeA few Indian Mobile facts to keep our thinking and perspective, honest.

90% of all mobile phones sold in India cost less than Rs. 5000 ($80 approx). 97.5% cost less than Rs.10000.

For perspective, there are a number of smartphones running Android Gingerbread, under Rs.5000, although Rs.6000 is a more effective starting point for 4.0 and above.

Less than 3% of smartphones sold cost over Rs.10000 or $160 approx.

A phone costing less than Rs. 5000 rupees ($91) is generally termed as low-cost and is also the last category as defined by CMRI, the company which is giving us these numbers. Unsurprisingly, 90.18% of the total shipments are in this (<5000) price range…

The next best selling category after 0-5000 range is the 5001-10000 range which accounts for 7.8% of the total sales. If we just look at phones costing less than Rs. 10000 ($183) then it would account to 97.44 %.

via India : 50 million phones shipped in Q1 2012; Smartphone’s drop though | Asian Correspondent.

So what do you get for Rs.5000 rupees? There are literally hundreds if not thousands of options. The most popular feature phones are still sold by Nokia (the Asha range) and today some of these will be WiFi enabled. Also consider that 2 out of 3 phones sold in India are dual SIM.

Or think Smart Phones where 75% of them are sold at under $160. So, despite the noise and the advertising on TV for the latest Samsung Galaxy Note III or equivalent (almost Rs. 50000 phone), it isn’t necessarily what people are buying, except in a niche. It’s effectively the halo effect of branding in this market, setting trends to big screens, and more features.

So yes, phones under Rs.5000 or approx $80 sell in the millions, while at the rarified top end, the market remains small and exclusive.

 

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TileI have a new little want. I like my Phillips Hue light bulbs. They are LED low energy, WiFi connected, multi-color bulbs that are just really cool. They also do a neat thing of turning on when I return home at night. However, more fine-grained location control simply isn’t available.

The biggest pain with Hue is reaching for the smartphone to turn the bulbs on. It’s pretty quick although flicking a traditional switch is faster. What they lack is proper location control that could be invisible. Example if I walk into a room and it is dark and they are not on – then they should turn on to the last setting (or another if I set it that way). Similarly, if I leave the house and no-one else is there – then the lights should go into vacant house – security mode. Likewise when I enter and leave a room.

I actually presume that if the Hue bulbs supported BluetoothLE this could be a whole lot easier. Of course they don’t they use Zigbee and a Bluetooth LE solution could well challenge them in the future.

So here’s the experiment. I’ve got some Tiles on order. Tiles are a simple little BluetoothLE beacon that you attach to things. The app is supposed to let you find them. The example is keys, or your wallet etc. At first I thought they would just be cool. However, the more I read or understood what they were, the less useful they seemed to be. So I’m thinking. If  ”TheTileApp” can find my keys then it could also send a notification to my IFTTT account when I am on one or the other side of the tile. I could then use the IFTTT account to turn on my Hue lights. Then I just put the Tiles where the natural switches are (which may or may not be where they actually are).

For music to biofeedback, this site is a pointer to many Hue apps.

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Not so long ago, our Mumbai team was doing a lot of car watching at gas stations and noticing what was inside cars. We were studying design of auto interiors. Before I tell my car story, I must take you back a few years as the story and the insight is related.

In 2008  I was on a small ferry  boat and a group of kids started playing music. It was very loud and I could see it was coming from a mobile phone. I was intrigued and asked them about it. And wrote about it.  “China Phone” Beats Nokia N95 in Boombox Test, which became a number of blog posts referencing the China phone and the huge number of speakers they included. Including “From the “Mouths of Kids“, “Manish Market and the Mobile Ghetto Blasters” and “Prince A950 – My China Phone – Think Different“.  You can read them, yet, for this story, what mattered is an understanding of sound (dual sim too).

Not quality as we know it, rather loudness. Follow any festival, watch a marriage procession with drums beating and then go and talk to the NoiseWatch people. Its a high volume level society. With the honking in the streets, a simple meek ring tone would never cut it. And so, even years ago, the kids disparaged my best in class N95 at that time. It was something Nokia had clearly missed despite being the market leader. (Note for reference Nokia has been a client, although not on this subject and the observations shared here are my own then and now. As they say watching change, trying to interpret change never stops.)

IMG_5898In the intervening years I’ve had many rides in many different cars. Indian drivers more often than not had a simple Nokia. Cheaper cars didn’t even have a radio. I don’t think I’ve ever seen a driver pull out a map. The usual way to get somewhere is drive to a landmark and then start asking rickshawallas, cabbies, shopkeepers and passersby. In that same time period I’ve been the one in the car that keeps checking on how Google Maps is doing.  They really work now!  I’ve also heard from time to time, younger people starting to talk about maps.

Now they don’t talk about maps in that old fashioned way – no the first real maps they got their hands on were on mobile devices and it helped them find a restaurant or pub. In our western worldview many would expect that maps must have been working for years in a place like India. That’s just not true. Either there wasn’t the data, or the data connection to make them useful (outside main cities, on Edge things can still be painfully slow).

Then there are updates. On my last visit a friend was complaining about the Android update that had removed / integrated Google Navigate into Google Maps. Now she couldn’t figure how to follow the worm. I suspect the change was made from a western map reading perspective and it no longer worked the same for her. (See her Galaxy Note also mounted in portrait mode).

That was just part of what I term one of those learning moments. My hypothesis “Smartphones” usage in India and how they are used includes different roles/methods and even screen interpretation and usage that cannot be understood without context. I’m attaching a picture of what triggered my thoughts.

This picture shows an almost new Samsung Galaxy Note suction cupped to the windshield. The latest model  - a one year old car, did have a CD/radio installed. I’d describe the car as a very nice box. In the same car there was also a USB charger and cord dangling down. In this case the phone was positioned portrait mode for use as as a GPS navigation aid. The big screen really helped. The driver didn’t follow the map, the driver followed the arrow and line. Turns out the driver often uses the phone for music too. The mounts are becoming more popular and cost was cheap (I heard a few hundred rupees) and while walking the streets I bought a USB charger for 200 rupees ($3.50) which didn’t work in this case.

This is when it really hit me that smartphone behavior around cars in India is very different from the integration that the upscale western auto market is following. Yes upscale new cars in India will get bluetooth and more. Yet I know, in my own car and motorcycle in the US, I too mount my phone on a Ram Mount (suction cup holder to window / handlebars). I then plug it in or in other cases just use bluetooth. I don’t expect it to replace my stereo. I play it through my stereo. I use it for navigation all the time although a bigger screen would be so much better.  I watch a map rather than a line etc.

At that moment I came away with a suspicion that the Indian motorbike and car will enjoy their smartphone makeovers. Sound on speaker is again important particularly when the only speakers in the car are in the phone. Then they will also be used to manage tasks that we might not think about here. Example the owner wants to know where their driver is parked? (The owner pays for the phone). Or the rickshaw driver that can turn his phone into a better business? Uber like? For truck drivers, the smartphone could be a total journey makeover device. Yes, a revolution is going to come when smartphones go into all these vehicles, and that will drive smartphones lower down the market as location and maps (worms?) will give them real economic meaning.

Which all comes back to sound and screen size. Big screen sizes are here to stay. The car really puts the mobile at arms length – vs the traditional half-arms length distance. So the screen simply needs to be bigger. While like the sound, “mine is louder than yours” and “mine is bigger than yours” are real value statements in a country like India. Small is not generally better, and Chinaphones proved that, often shipping with two batteries and large not necessarily good quality screens. Add in the other obvious factors. She puts the phone in her handbag how important do you think pocket-ablity is? He’s on a rickshaw all day. What sort of charger should you sell him?  Should it even come with the phone?

Go down this track and you quickly realize that innovation in mobile is somewhat stagnant at this point. The $100 smartphone is near and yet still sold with a charger. What sort of battery should it have? Should the battery be a separate purchase (Tesla almost does that). Does it really need to ship with earphones? How tight (as innards with no wasted space)  or light does it have to be?

The pocket is a beautiful lens to look at your mobile strategy. However, in the context above, where it is a working tool, it’s seldom in the pocket and its helping people actively engage with the world around them.

I suspect Samsung’s big screen strategy was a little by accident and partially by design. As an Asian brand they will get the the ‘mine is bigger than yours’ advantage. I’m not sure that until now anyone has really provided the use cases for what happens when the “mobile computer” is out and available all the time. That’s not relevant to macbook carrying, ipad holding, iPhone pocketed, users with too much tech. No, that smartphone story is about moments in-between. And business, till now, has been managed by email and calls.

The new discourse and story must change. Low cost smartphones are purchased because the economics drive people to own one. The opportunities are around business, maps, logistics and payments.

 

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A recent article was sharing how Lowe’s is helping customers find items on their smartphone app while in the store. Apparently 20% of Lowe’s online visits are from the mobile. The snip below was what set me thinking. On reading it, I had this feeling that this is very much last year’s solution and Lowe’s is positioned to move faster than you may think. In a moment I’ll tell you why.

“The company’s in-store product locator feature allows customers to find the location of in-stock items at Lowe’s stores using their mobile phones. When a consumer selects his “home” store on the Lowe’s app and searches for a specific item, the associated aisle number pops up alongside the item image and description. Users can then tap on the aisle number to view an interactive map of the specific store that shows where the product is located.”  Read Original Post.

Lowes App Selecting a Product

Selecting a Product In-Store

  1. Search for store (which is set with first log-in unless you want to change)
  2. Search for item
  3. Choose item that you want that is stock (is priced)
  4. Tap on aisle number
  5. Look at the tiny aisle map to find the product….. (can zoom with fingers)

All on a tiny screen, this type of thing doesn’t work as much of a time-saver. Yet it is an important piece in getting to the next stage.

So what’s wrong and why do I think this is dated. The problem:

  • I want the mobile to guide me to the right location. I don’t even need a map – just a direction pointer and a little encouragement. This could appear on the result of screen 3 shown. The whole UI thing could be simplified.
  • Lowe’s has all the information by store. It’s all planogrammed out, with maps on where stuff goes. The problem is the product doesn’t have any sort of signal saying to the buyer,  ”I’m here, I’m here”. So we have these manual maps.
  • The product I’ve chosen  may well have some other related products to get the job done. Will I see them or forget them on the way to pick up the item I’m searching for.
Lowes Product Finder

Current Product Map Returned

The potential solution:

I’ve been following the iBeacon evolution. Last week in MLB and with AppleTV etc. So I’m assuming with a little maths the following is possible:

  • Put an iBeacon (actually a BluetoothLE transmitter) at the end of each aisle. (If the aisle is too long, put one in the middle too.) Think triangulation and it may be simpler than this.
  • Now we know the exact distance between two transmitters and then between aisles etc.
  • As we have the planogram we can actually point the user to within approx a foot  of where the item is.
  • With a level on the “arrow tracking finder” we can actually guide the direction of the persons eyesight up or down. There are various UI ways this could be done
  • There are probably some other things we could do too…  you get the drift :)
  • Now every product can “talk” or “message” (not that we will want them to)

The benefits of this are immediately obvious:

  • Every Product in the store can now direct someone to it. No electronic label required.
  • It means that the shelves are potentially alive with interest and reminders. As I walk by I may get offers. (This is a selling opportunity for retailers to suppliers – more profits)
  • Offers and discounts can be personalized to the individual shopper (repeat purchases, associated items etc.).
  • Obviously the market for smartphone holders on shopping carts / trolleys could be huge.
  • The mobile can become the product scanner.
  • Self-checkout is simplified as the trolley and goods are weighed on the way out
  • Lines and staffing requirements at retail counters disappear
  • The customer effectively has the cash register on their trolley/shopping cart.
  • The retailer can more effectively optimize in-store traffic and shopping paths.
  • “Savings” will likely encourage other customers to adopt the Lowes app.
  • Builders and Contractors never have to wait in-line again at checkout – saving time and thus money.
  • Staff can be re-deployed back into the store.
  • Payment Relationships can be renegotiated. Eg an auto direct debit rather than a Visa.

There are some issues we will address below. However the cost of this installation need not be large. Lowe’s are very large stores. I used the example of Bluetooth LE beacons on each aisle – 2 or more. However, in a highly planned store like this, “triangulation” may actually cover a much broader area reducing the number of beacons actually required. There will be interference too. There’s perhaps a reason Estimote is selling developers a pack of three. The cost of these beacons is low. The software development cost is also relatively low and certainly minuscule by comparison with installing self-checkouts, new registers or adding new staff. Lowes has already provided their staff with iPhones (42000!). So they already have a beta test task force in place.

Issues:

The customer has a trade-off. Effectively privacy and cash, or a better more efficient relationship that may save them both money and time. There has already been some outrage over WiFi and Mac tracking by retailers. Retailers will have to be very smart about how they use or request location information. It’s one thing to share in the store, another to continue sharing once outside with an app running in the background. I think we will shortly see some interesting statements in plain english to address consumer fears.

Conclusion:

The benefits simply outweigh anything else. In a year Lowe’s, Safeway, Tesco Ikea etc. should begin rolling out solutions like these.  It will also generate new apps that help stores set them up.

 

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ShoppingThe coming changes to mobile location services will be highly disruptive to  advertising and promotions,  payments and relationships. For two key reasons. Every product or brand is going to become a lot more invested at POS (think supermarkets and how they will change promotion practices when they know where you are in the aisle) and the relationship (and product loyalty details) they have with the customer’s pocket. While the mobile device in your pocket is already encouraging retailers to augment the in-store experience it is rapidly going to redefine profit centers. My theory is – it will have a radical impact on how supermarkets and consumer product companies work together and more broadly all suppliers to retailers.

The quotes referenced below all point to posts written by Brian Roemmele who captures many of the reasons I’m excited about this space. If you are interested in retail, payments and customer relationship building, they are worth reading in more detail.

As a researcher I have identified about 245 use cases for what is now known as iBeacons.  About 88 are in payment applications.  There are about 45 that center around micro location.  The remainder are quite useful and rather non obvious.  via (40) iBeacons (iOS SDK Feature): What are some interesting applications that are enabled by iBeacons technology featured in iOS 7? – Quora.

A company bought by Apple which will enable them to create iBeacon like iTags. Think about clothing, packaging where range is more limited.

The Passif technology is how Apple will power these nano devices known as iBeacons.  The iBeacon technology will allow for merchants to activate a number of new features that will be a part of future iOS releases and future iOS devices.  The new iBeacon devices will cost pennies to manufacture and will likely be given to larger merchants by Apple, for little to not cost. 

via (40) Apple + Nikola Tesla Inspired Technology May Ch… – Accepting Payment Cards – Quora.

I certainly know the following is true for large retailers and in fact for smaller retailers and services. I termed this the “social register” some time back although really it’s relationship and experience engagement by the seller for the buyer.  What’s true for big and small stores in Brian’s post is payments isn’t the way to optimize the experience.

Some of the reasons these retailers are doing this themselves:

  1. Retailer’s Agenda – They want “Mobile Payments” as a tool for enriching the customer marketing, shopping and purchasing experience. Not as a way to move a payment company’s agenda.
  2. Platform Agnostic – They want the ability to deliver a delightful experience to all customers, using all platforms. Not a bias to just one or two platforms.
  3. Retailer Access To Data – They want the same access to all data as they have had for over 100 years.
  4. Integration – They want understanding of and compatibility with backend systems, inventory management, along with connections to retailer credit, loyalty and marketing programs. They do not want to change merchant service providers.
  5. Flexibility – They want the need to be able to rapidly change the platform as changes in the market dictate.

via (40) Brian Roemmele’s answer to Why are Target and Walmart creating their own mobile payment solution? – Quora.

And then….  I love his examples that talk consumer anthropology and effectively how QR codes got Starbucks on their way. Starbucks, like the iStore is definitely one to watch, in rolling out the next wave of payment changes. With millions already having a Starbucks App, it will be the experience not the payment that comes first and it will start at the door or even outside.

The idea of using a barcode to enable a Payment Card transaction has been around since the 1980s.   Starbuck’s use of the 2D barcode was the creation of the mobile wallet and NFC genius, Benjamin Vigier.   Ignoring all of the debate I have seen in the Payments space, Benjamin choose a path for Starbucks that is a spectacular success.  This practical and pragmatic approach was not arrived at in an ivory tower.  Starbucks wisely choose to uses the  educated insights from their own internal experts and experts in merchant anthropology and consumer anthropology.  The results?  A simple to deploy mobile payments solution across all of the POS systems with a simple yet highly viral way for customers to adopt the system. It may not be disruptive, nor necessarily a technological marvel, but it just works.

via (40) Online and Mobile Payments: What retailer is the most successful in mobile payments? – Quora.

In the midst of many other announcements last week I’d miss that Intuit opened up their API and Square is now going to integrate Quickbooks/services into what it’s trying to do. Brian makes a great case of why and what it actually means. My interpretation is simple. Every store has a backend, and that’s the data. You don’t just throw it out and you do want progress. Intuit has the same problem. What they have to solve is augmenting the experience from the time the customer first comes in the door etc.

Today Quickbooks and Square declared a bit of a truce[2], perhaps even a “white flag” of surrender. The “disruptor” is working with the legacy “disrupted”. They announced an API partnership that allows Square merchants to easily integrate most of the data that Square collects on behalf of the merchant, directly into Quickbooks. This is really a monumental shift for Square.

via (40) Competitors: Square And Intuit Agree To Work To… – Accepting Payment Cards – Quora.

 

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LocationThere will soon be a very nice business in installing Bluetooth LE networks in retail stores that are tightly planned (example supermarket planograms). The installation will involve making sure there are no dead zones, while the consultants tie in the backend product services with the product localization maps. Then the environment can become alive and personalized to you.

“In this paper, a low-cost Bluetooth based localization system has been proposed. We introduced a novel approach based on multiple neural networks. The most suitable one is automatically selected and loaded by the system depending on user orientation, estimated with a compass. In this way, the system copes with the power absorption of the human body, achieving higher accuracy. In fact, taking into account the user orientation during both training phase and use, we proved that the indoor user tracking improves significantly. Using a few basestations and common office devices such as a laptop and a PDA, we obtained results significantly better than the current state of the art, where Bluetooth systems are usually limited to room level localization [10, 11]. Our results show that the system could be employed in a navigation task, where high degree of confidence on the localization is necessary to reach the expected destination. 90% of precision and 0.5 meters of accuracy were achieved during a walk along the corridor. Moreover a recovery system able to improve system performance in case of base stations failure has been implemented. It increases the accuracy of the system from 48% to 74% even when only 60% of the original deployed nodes are active.” 

I started looking for information like this after thinking about triangulation and how just a few Bluetooth LE beacons could help you map out a detailed area and the route that a person was taking and what they might be passing/seeing along that route. What intrigued me about the above was that the compass, and no doubt other motion sensors, will assist in improving accuracy to 0.5 meters.

In a highly planned retail environment, the products won’t need complex tags for the environment to come alive. It will just require a customer motivated to use the retailer’s App.

Separately, I’m beginning to consider this as an IOTC or Internet of Things Cloud, where the things themselves have no real intelligence, rather exist in a localized cloud which is simply accessed by walking around, fueled by a database on what’s currently in-stock.

 

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remember passwordWake up another technology shift is here!  Yesterday I read how you can “Tap to Setup” your AppleTV. Yes that’s right wave your iPhone with iOS7 within a few inches and most of the work is done for you. As usual the tech press doesn’t ask “so what?”, or “whats that really mean?”.  Where could this go? Some thoughts.

The iPhone and AppleTV share the data over Bluetooth and WiFi. The BluetoothLE on AppleTV for setup apparently set to 12 inches or less. Thus the tap to setup. Yet BluetoothLE works over a range which can be pre-determined up to about 160 ft. So what comes next with the AppleTV? Perhaps Netflix who just introduced profiles? Now it can identify who’s watching. Equally I could set it to start music at certain times of the day when my phone is in the vicinity or when I come home. Having an accurate “Stuart’s” home function is now way more interesting. I’d certainly like to test it with Philips Hue Lights. They could go on room by room as I walked around the house with subtle fade outs (of course I don’t have that many bulbs yet). The Hue app also need reworking.

So what do we have? The AppleTv becomes the iBeacon for everyone in the house, which means the apps in your pocket that control your house now have fine grained location control. For developers this will be huge. For example I no longer need to open Hue each time I want to turn on the lights. They just turn on because I am in the room or in a place in the house.  Or my iStrap/iWatch can communicate with my phone apps and AppleTV  beacon and do all the same things. Then eliminates the need to keep the phone in my pocket – just a low-powered BluetoothLE device on my arm.

Yes there are many problems with this little scenario. What about the kids, or the dog? Then there is the front door and more. Different locations may be defined by standing there asking apps for actions at those points. Then even the AppleTV may be upset if moved.

Having this degree of location accuracy in the home is both scary and welcoming. “Tap to setup” leaves the functionality in a more “magical” zone for the moment. Still if you want music to automatically turn on when you arrive then you will quickly expand the range (Once we get this control). What’s important to recognize is whether this “iBeacon” is just between the AppleTV and your apps locally or if they report to a central authority each time.

So there’s another play here. Right now all the smart home solutions are running the backends. Yes I can control my Nest thermostat (I don’t have one) using my smart phone. However, I must have the app open to do that and Nest is communicating with Nest Central letting them know how I manage my heat which may or may not be something everyone wants to share. Also if these apps are location aware / geo fenced they tend to eat up battery and aren’t all that accurate. So the heat or lights will probably (rather than guaranteed) go on when you return. An iBeacon notification makes this more efficient and accurate. Example the phone senses the Apple TV and then the apps know where you are and what to do.  Effectively  your phone is now the “hub for the smart home. Note, interestingly, this iBeacon doesn’t send to Apple or to Philips or Nest. It’s could be limited to just being part of a relationship between the App, you and your location.

There are many things this could activate. Communications, Health, Heat, Light, Doorbells, etc.

While I’m still trying to get my head around implications for the smart home there are real potential cost benefits. Most of the other smart home systems have some form of hub and these devices are expensive and generally incompatible with each other. The current Philips Hue system uses wifi and a hub and a backend. Yet if the bulbs were iBeacons and used BluetoothLE  then the app in my pocket can still manage them with new opportunities for the UI. For more speculation that same App could be in the AppleTV and respond to a simple remote control or personal iBeacon bands. If I wanted I could share these signals. Example daughter comes home after school. Her wrist band unlocks the door, activates the lights, sends a message to my phone.  I suspect that relationship and set of notifications would go via iCloud.

Interesting times…

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