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Archive for September, 2010

Retail mCoupons with Barcodes: No Scan Do.

September 21, 2010 in Uncategorized | Comments (2)

I went to the coffee shop inside a large retailer the other day to conduct an experiment. I’d downloaded a new mobile payments / store card app on my iPhone a few days before, and I couldn’t wait to try it.

The app works like this: you enter your existing store prepaid card or buy a new one with your credit card and then it displays a barcode on your phone that you can use at the point of sale (POS) to complete your purchase. It’s like a virtual gift card.

This retailer is one of a few companies working to break new ground with mCommerce, taking advantage of the fact that giving customers a more convenient way to pay entices them to open up their personal two-way communication device that can also receive offers and promotions as well as collect information about their behavior. It’s a winning idea, but success depends on the proper implementation.

When I got to the counter, I ordered my drink and pulled out my phone, but the assistant at the register told me it would not work on the scanner. Instead, she asked me to read the numbers on my barcode. I asked her if we could at least try to scan the phone. She assured me that it wouldn’t work. After some encouragement She reluctantly agreed, and… as she had warned me, it didn’t work. We tried again after I’d turned my brightness setting all the way up: nothing. I ended up reading my number to her, just like she’d asked me to at the start, and she keyed it into her terminal.

Did I leave disappointed? Well: I had a hunch my experiment would fail. The question on my mind going out the door was the same one I’d had going in: Why are we trying to use the barcode at all? Why, when there’s a pin pad sitting on the counter at almost every retail POS?

Retailers have a mix of old and new laser and imaging scanners. Combine that fact with the reflective glass screens on today’s smartphones, and the lighting inside the stores themselves, and it’s no wonder that scanning bar codes on phones is problematic.

Sybase 365 has taken a different approach to this issue. We send the customer an SMS that contains a unique voucher number. The customer simply enters the number in the pin pad at the POS. Working with our partner Eagle Eye Solutions, we’ve integrated with POS networks via the payment channels. We can verify and validate the voucher on our system in real time, and the retailer can offer this solution without having to upgrade POS equipment.

And of course with the mobile voucher, we’re relating to the customer in a whole new way. We can authenticate the customer as well as the voucher, relaying the relevant information back to the retailer. For example, mobile number 555-1212, belonging to Mr. Smith from XYZ, just purchased a beverage, and the same phone last bought something two days ago. Into the CRM database it goes. Because Mr. Smith always has his phone with him, retailers can make offers more immediate and compelling, and Mr. Smith doesn’t have to remember to bring coupons to the store.

More and more brands and retailers are leveraging the mobile channel to gain customers, grow market share, and gain greater insight into their consumers’ behavior. I can see a future where consumers’ phones become their virtual shopping assistant, enhancing offers, coupons and loyalty, and it is arriving fast.

So to me the interesting thing is that as we switch from one medium to another, in this case paper or plastic to phone, we should not necessarily copy the same mechanism from the other medium (the bar code). There are other options that are possible and more effective in the short term. So the strategy is right, and as a consumer I am benefitting from this greater convenience and more personalized offers, but the tactics require some tweaking as the technology evolves and matures.