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I’m joining OLO’s advisory board

31 Oct

I’m pleased to announce that I’m joining the advisory board of OLO. You can see the press release here. Forbes recently had a great write up of OLO.

OLO provides online ordering for companies such as Five Guys, Noodles & Co. and Cold Stone Creamery. Guests can order from their smartphones and pick up their order in store without waiting in line.

I met founder Noah Glass earlier this year and was very impressed by his commitment to helping restaurants incorporate mobile technologies.

Mobile has changed a lot of spaces already; I think there’s a lot of potential to improve the restaurant experience for both consumers and operators:

  • A better consumer experience. We’ve all experienced the lunch rush. Your stomach is grumbling and you just want to eat. With order ahead, you can bypass the line and get straight to your food. Mobile ordering also increases order accuracy because you can see what you’re ordering. I was recently at a bar in Utah and ordered a Hop Notch IPA. The bartender thought I said half nachos. Oops.
  • Increased throughput for restaurants. People who know what they want aren’t turned off by a long line and go elsewhere.
  • Reduced operational costs for restaurants. Miscommunication in ordering and unclaimed orders cost restaurants money.

As I’ve noted repeatedly in my writings, local is a hard slog and OLO has shown the dedication and perseverance necessary to succeed in local. The company started off with mobile ordering by text message in 2005. It is also well financed, having recently received a strategic investment from PayPal as part of a $5 million round.

Noah and team are off to a great start and I look forward to working with them to help restaurants take advantage of mobile.

Impatience at point-of-sale

10 Feb

I was in Washington state last week with my friend Amy and her 2-year-old daughter, Sophie. We went to the Northwest Trek Wildlife Park so that Sophie could see her favorite animal (bears) in person for the first time.

At the end of the visit, we stopped in the gift shop and I found an adorable shirt for her. (With a bear, of course.)

I handed the shirt to the clerk and my credit card to Sophie to hand over.

The clerk was having trouble with the scanner. She tried repeatedly to get it to ring up. In that time, Sophie twice picked up my credit card and moved it closer to the clerk.

Although Sophie doesn’t understand retail technology, she does know when something is taking too long.

The experience also made me wonder whether kids will use cash as much as we did, when they are growing up accustomed to seeing their parents (and their parents’ friends) paying for so many things with plastic.

Even the exposure that many of us first had to money — cash that our parents gave us to pay for school lunches — has been replaced in many U.S. schools by prepaid systems.

Why the foursquare and American Express deal is really big

23 Jun

Screenshots from foursquare's AMEX integration

Foursquare’s new deal with American Express will allow AMEX cardholders to save money on purchases at select retailers including Sports Authority and H&M. As important as the deal is, I think the technology is more important.

We’ve heard a lot about NFC lately. Products like Google Wallet can talk to the payments network and transmit your credit card, loyalty program and promotion information.

I’m sure it will happen over time, but the benefits are marginal at best. Yawn.

What’s really exciting is what you could do if you flipped the model and had the payment networks talk to your phone. That’s exactly what foursquare is doing. When you redeem an offer, American Express sends a confirmation to your phone.

The payment network can reach out and touch your phone. That’s huge. That enables a lot of possibilities:

  • Risk reduction and increased convenience. If you’ve ever been traveling and had a card rejected because it was flagged as suspicious, you know how frustrating this can be. Instead of declining the transaction, it would be routed to your phone where you could authorize it. This also saves a phone call to unblock your account. Fraud reduction, more transaction volume and operations cost reduction. A credit card company’s trifecta.
  • Online transaction authorization. Similar to above, a notification to your phone could be used as secondary verification of online transactions.
  • Parental authorization. Parents could provide a restricted prepaid card to children. On every transaction, they could remotely approve or deny it. Some merchants could be automatically authorized. This would be a great addition to American Express’s PASS product line.
  • Promotions. Offers based on your recent purchases and location could be sent while you’re in a shopping mood. If you just made a purchase at mall, you might get an offer for discounts on dinner and a movie.
  • Access for the blind. A text-to-speech engine on the phone could provide an overview of the merchant and amount to help the blind.

An application like this also eliminates the two-sided market problem that NFC has. As much as Google would like to have NFC terminals everywhere, that will take a long, long time. Merchants don’t have to do anything to the installed terminal infrastructure to make this happen. It’s all between the backend and your phone. It also works with a much broader base of phones than NFC.

This type of integration also eliminates the need for training retail employees and doing POS integration. These are both significant hurdles to running promotions.

The importance of staff training and POS integration

12 Jun

foursquare offer at RadioShack

I stopped in at Radio Shack last week to take advantage of foursquare’s 20% off newbie special on an iPod Touch. (It’s a great deal. 20% off a current generation Apple product is tough to find.)

The clerk I talked to had no idea what I was talking about. He reluctantly brought over the manager. She had no idea what I was talking about. She stared at the offer on the screen and couldn’t figure it out. She tried calling another store. Again, no idea what was going on. Then she called Radio Shack’s POS support line and was on hold for about 20 minutes.

If I were an ordinary customer, I would have been fed up and left. But I like to see how these things play out and consider it market research, so I let it go on. I amused myself as the manager spent her time on hold trying to sell me batteries, extended warranties, screen protectors, armbands and pretty much anything else that was within reach.

I asked if she could just override the system and add the discount. No, store managers don’t have that discount. Finally, she randomly entered promotion codes and figured it out.

Thirty minutes after I entered the store I left with my iPod. During that time she couldn’t help other customers. It was’t a great experience for me, the other customers, the store or foursquare.

Clearly the offer code was not a single use code or she wouldn’t have been able to guess it. Either Radio Shack needs to get much better at training or they need to put POS instructions right on the foursquare offer. (They also need to better staff their POS support desk. No one ever picked up.)

This isn’t limited to foursquare or Radio Shack. I run into this all of the time when trying to redeem mobile offers. My default expectation is that it won’t go smoothly.

That’s one thing that appeals to me about Square’s Card Case and Register. Because the POS system is integrated with loyalty rewards and promotions, here shouldn’t be a disconnect between the offer that I see on my screen and what the merchant sees on hers.

Opt in vs. opt out in tipping

31 May
To tip or not to tip

To tip or not to tip?, that is the question

The tip line. A somewhat passive-aggressive solicitation for money. It’s long been the norm at full-service restaurants, but it also appears at many places where I wouldn’t ordinarily tip. If I order and pick up my food at the counter, a tip seems unnecessary. If I pay cash, there is no default expectation of a tip. (Though there might be an easily ignored tip jar somewhere.) But paying by credit card, the tip is closer to an opt out. I have to explicitly draw a line through the tip line and write in a total. I’ll admit to tipping at places I wouldn’t ordinarily tip because of the subtle pressure. Sometimes I’ll pay with cash to avoid the situation.

Changes in payment systems are changing this dynamic. Increasingly, credit card companies aren’t requiring signatures for low-value transactions. With MasterCard’s Quick Payment Service, transactions under $50 can be processed without a signature. It’s faster for the consumer, moves the line quicker, but removes the opportunity to tip on plastic.

Square’s payment service offers a tip option:

Square's tip button is off to the side

This implementation is the equivalent of the physical tip jar: if you go through the normal transaction flow and just sign, there is no tip. You have to explicitly click the box in the upper right corner to add a tip. (I haven’t seen what the tip experience is like with Square’s new Card Case.)

Is that the right experience? It depends on whom you ask.

One merchant I talked to would prefer that the tip was part of the default transaction flow, as it is with a credit card slip. On a $5 food cart transaction, even a $1 tip is huge. As a consumer, I prefer the opt in experience. As a product designer, this is a great example of how even small changes can have big impacts.

Either way, the customer doesn’t have to do math. That’s already a huge improvement over the paper experience.

What Square’s new Register and Card Case means for small businesses

23 May

Square today announced its Register and Card Case products to complement the existing Square reader and smartphone applications. While Square has been focused on the merchant experience, this move expands its role on the consumer side. (Consumers have been able to receive receipts by email or text message when making purchases at Square merchants.)

With the new application, customers will be able to search for nearby Square merchants, see what’s on their menu and view receipts for previous transactions. Customers can also pay right from their mobile phone and the payment is confirmed on the merchant’s iPad.

Merchants will have the ability to accept a payment without swiping a card. They can also keep better track of what they’re selling. A loyalty program allows businesses to reward loyal customers. Unlike check in based systems which involve users to self-report, this system would be harder to cheat.

One open question is whether these transactions will be treated as card present transactions for Square. I expect that Square will charge merchants the swipe rate for these transactions. If they’re paying out the card-not-present rates, this will eat into their margins.

What we’re seeing here is only the beginning. There are a lot of important problems that can be solved with the data that Square will be collecting:

Consumer problems

  • It’s 2 a.m. and I’m hungry. What’s open? This is a problem that search generally handles poorly. Yelp has done the best job of collecting this among anyone I’ve seen. (Google tries, but its data is less comprehensive.) Even when the data are collected, they are often inaccurate. (Holidays, business was slow so we closed early, etc.) The Square Register could contain a virtual Open and Closed indicator that is visible to consumers.
  • I have a craving for a dosa. Where can I get one? With menu item data, Square could answer that question — at least for its merchants.
  • I have a receipt, but I can’t remember who I was with. The Square app could allow users to flag tax-related transactions and record notes like who you ate with.
  • I want to tell someone about a place I ate at, but can’t remember the name. (And want credit.) People are generally bad at remembering place names. Merchants could also offer rewards for new customer referrals, much like online merchants do.
  • I’m in a hurry and I need an order to go. Consumers could order right from their mobile phones, the order would pop up on the merchant’s screen and the merchant could select an estimated pickup time. For the merchant, this also reduces the risk of nonpayment for phone orders that aren’t picked up.

Merchant problems

  • Updating Web sites is hard. Most local business Web sites I go to are horribly out-of-date. Menu items and pricing can be more than a year old. Hours are often wrong. Maps are hard to find. Square could take the data from the Register system and generate Web pages with dynamic information, including today’s specials and hours. Some card issuers and payment processors have offered Web site creation, but these have mostly been low quality efforts.
  • I don’t have a mobile presence. Very few local businesses have dedicated mobile sites. At best, you get a hard-to-read version of the main site. At worst, you see sites created by incompetent flash designers who knew nothing about user experience. These render blank on an iPhone. Square-generated mobile Web pages would provide easy access to key info such as location, hours and menus. Google says about 40% of searches on mobile devices are local in nature — as a result, this is becoming increasingly critical.
  • I don’t have time to enter data multiple times. Square could also generate a PDF that could be printed for in-store menus. Data entered once gets used for POS, paper menus, Web site, mobile site and promotions. This not only saves on work, it eliminates inconsistencies which can cause customer service problems. Getting a bit crazier and thinking further out into the future, a Square app on an Apple TV could show promotions in store.
  • I want to get people to try new items. Square could use transaction history to entice regular customers to try things on the menu that they haven’t tried before. With promotions, you want to spend your promotion dollars on transactions that wouldn’t happen otherwise. Paper coupons are dumb in this regard. Say you’ve got a raspberry tart that you think is amazing. You could find all of the customers who haven’t ordered it and send them a promotion.
  • I want to know what my customers think of me. An email after the fact could prompt users for feedback and generating a net promoter score. It can also be a way of drumming up more business. For example: “Would you recommend us to a friend?” If the customer says, no, you can ask why. If yes, you can ask for friends right then and there. “Whom would like to recommend us to?” The referral can be coded so that the business can thank the original customer for the referral. A Square app could also provide more actionable data than the typical Yelp review — a restaurant would know when they ate, what they ordered, etc. This would make it easier to identify problem employees or dishes.
  • I want to know how I’m doing compared with other businesses in my area. I charge $3.50 for a slice of pizza. How does that compare with others? How does my revenue compare? Of course, this all needs to be done in a way that protects business anonymity. Data would only be available when there is enough participation so that a single businesses’ information can’t be identified. Participation should be opt in, with the carrot being access to data. The key here is that data needs to be in a meaningful context. I’ve seen many startups that just want to throw data at businesses. That’s not good enough. Square will also need to answer the “So what?” What decisions should I make based on that data?

See also:

CNN testing QR codes on TV

20 Mar

CNN began testing QR codes on air this weekend to direct people to a site where they can help Japanese earthquake and tsunami victims.

CNN QR code

The code was easy to scan, even without pausing the broadcast. It worked fine from across the room. Just launch a barcode scanner and it will decode the URL and give you the option to open it in the browser. If you have a scanner, you can scan it off the image above. If not, click to go to the Impact Your World mobile site.

This is a great implementation of the often over-hyped QR-code technology. Print ads have occasionally featured QR codes which take you to an advertiser’s URL.

Some other applications I’d like to see:

  • In movie trailers. Scan it and it gets added to your movies to see list, possibly with a calendar entry dropped on the release date. Or an option to add to your Netflix queue for movies that are less interesting.
  • In TV promos. Scan it and it gets added to your recordings list. (The better implementation would be that the DVR itself would recognize a tag and prompt you.)
  • In TV commercials and on billboards. Scan to go to the advertiser’s site.
  • On CNN. Scan to get more information on a story.

QR-codes have a number of advantages over other technologies. They are free to generate, don’t require any hardware beyond a camera, hold more data than a standard bar code, are easy to replicate, work across a distance and have a built-in call-to-action (scan me!). QR-codes can also hold structured data; scanning the QR code on Rakeshagrawal.com will load up my contact information.

But it’s not the ultimate technology for every application. As much as people in the technology industry like to claim that one technology will take everything, that rarely happens.

Artwork at MoMA scanned with Google Goggles

Artwork at MoMA scanned with Google Goggles. In this case, it was a scan of a picture of the painting on flickr.

Here are some other applications where other technologies work just as well or better.

  • Identifying artwork. Many paintings in the MoMA’s collection can be identified just by taking a picture of it with Google Goggles. Let’s face it, QR codes are ugly. They’re designed to be easily readable by machines, not to be pretty. I should point out that the wacky kids in Dubai are trying to turn them into architecture with a QR-code hotel. Still, it’s not my taste in architecture.
  • Payments. Because they are easy to reproduce, QR codes (and bar codes in general) aren’t well suited for payment applications. They only work when you don’t really care about security.
  • Scanning books or products. One discussion that came up recently was using QR codes in stores like Barnes & Noble to identify whether a book is available in nook format. That’s overkill — you can do this perfectly well with the bar code already printed on the book. Heck, you can take a picture of the cover and that’ll work.
  • Print ads. URLs can be detected with simple OCR software. No need to clutter your creative with an ugly QR code. The key here is to use a simple font against a high contrast background and leave space around it. That’s a good practice anyway to ensure that human eyes can read it.
  • Checking in to a business. WiFi and GPS positioning do a reasonably good job of this without requiring businesses to do any extra work. This could be improved, but it works OK.
Plain text URLs work just fine in Google Goggles.

Plain text URLs work just fine in Google Goggles.

AT&T’s 180,000% markup

3 Feb

One of the challenges of international travel is getting access to communications. I’ve gotten used to being able to check email, look up restaurants, find maps and communicate with friends from anywhere in the U.S.

Take your iPhone overseas and all of this can get really expensive, really fast.

At AT&T’s pay-per-use rates, you’re charged $19.97 per MB. It’s cheaper to buy and send a physical post card to friends than it is to send a digital picture.

The only way around that is to buy a local SIM and use it on an unlocked iPhone. This process varies from country to country and can be quite a challenge if you don’t speak the local language. It also means that you don’t have coverage the moment you step off the plane.

I got lucky on my recent trip to Italy. The first store I walked into had a clerk who spoke English and understood what I needed. For 2 Euros ($2.76) a week*, I got up to 250 MB of data usage. At AT&T’s a la carte rates, that same usage would run $4,992. If you plan ahead, you can get 200MB for the low, low price of $199.

Even ripoff hotel minibars only charge 3x-4x street costs for convenience.

AT&T’s data markups are even way out of line with its international voice roaming rates. With voice,  AT&T actually provides some value in that phone calls to your number get routed by AT&T to your phone overseas. With data, the only convenience over a local SIM is that you don’t have to seek out a local provider.

The pricing is so absurd that the only people who would do this are business travelers who must be connected at all times, the fabulously wealthy or everyday customers who don’t understand the charges and will further resent AT&T when they get the bill.

AT&T’s the company that pioneered Digital OneRate, which eliminated nationwide roaming charges. I’d like to see them do something rational for international roaming.

* For comparison, this is also much less than AT&T charges for domestic data usage. With a contract, AT&T charges $15 for 200 MB of data. This works out to about $11 for 5 times as much data.

How to pay at Starbucks using your Android phone

2 Feb
Android-enabled Starbucks mobile payment device.

Android-enabled Starbucks mobile payment device.

Starbucks made a lot of noise recently with the launch of mobile payments in the United States for iPhone and Blackberry users. As an Android user, I felt left out (as is often the case.) But there’s a way to use your Android phone to pay for your coffee. Here are the steps:

  1. Borrow a friend’s iPhone or iPod Touch.
  2. Set up your account and enter your Starbucks card information.
  3. Go to the “Cards” screen and click “Touch to Pay”.
  4. Take a screenshot of the bar code that appears. (Hold the power and home buttons.)
  5. Email the screenshot to yourself.
  6. Print the screenshot. (I printed it at 35% zoom to get the right size.)
  7. Cut-and-paste (physically) the bar code to the back of your Android phone.

Viola! Mobile payment device.

It’s even better than the iPhone app: it’s quicker (no need to find and launch the app and click a button) and it works even when the battery is dead.

It lacks a lot of features. You can’t find the nearest Starbucks, reload your card or see your transaction history. But for the most common task of paying for coffee, it is the optimal experience. It would be nice if Starbucks stored your preference on whether to print receipts, but that’s an issue with either method.

This illustrates one of the key challenges facing mobile payment systems that are emerging: in their desire to get our money, banks and retailers have already made paying for things incredibly simple. Swiping a credit card is just.not.that.hard.

Any digital wallet will have to be just as simple. Launching various applications, digging through menus and entering security codes are all steps that add friction to the purchase process.

Apple, Google and others entering the NFC/mobile payments game would do well to have standardized interfaces to flip among payment, library, transit and access cards versus having every app developer design interfaces as he sees fit. These could be tied to location — if you’re at Starbucks, the Starbucks card automatically shows up first.

Mobile and the improving user interface

30 Sep
The zero-click experience in the Happy Hours app.

The zero-click experience in the Happy Hours app.

Some of the best user interfaces being created today are on mobile devices. I often find myself reaching for my cell phone instead of my laptop when I need a hit of information. Common tasks such as looking up a business, buying movie tickets or checking email are often faster on mobile devices.

The best example of this is the Happy Hours app. Launch the app and after a few seconds it will show you the nearest happy hour specials sorted by distance that are going on right now. No input required.

Why are mobile interfaces better?

  • Access to sensors such as GPS. The Happy Hours app on my phone knows where I’m at. On the Web, at best it can guess what city I’m in.
  • Limited screen real estate. People often feel the need to fill whitespace. Nothing else to put there? How about some more remnant ads? With mobile, there is less whitespace to fill.
  • No SEO. The app itself doesn’t have to be filled with links for search engine crawlers. At least half of the GoTime.com home page (the company behind the Happy Hours app) is links for crawlers.
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