There is a new coffee shop in my neighborhood that handles all its customer transactions on an iPad, including credit card swipes. It’s the coolest thing ever. And it got me thinking about how mobile technology is changing the retail landscape. So to learn more, I called David Dorf, senior director of technology strategy at Oracle Retail, which supplies software to retailers.
Dorf identifies emerging technologies for use in the retail industry and has a small research team that creates prototypes. Here’s his blog, and excerpts of our conversation are below.
My neighborhood coffee shop that’s swiping credit cards on an iPad: What’s going on there?
Most likely the point-of-sale (POS) device was something called Square. One of the guys who created Twitter broke off and started Square, which allows you to take an iPhone or iPad and turn it into POS. It allows you swipe credit cards. The interesting thing is that he used the earphone jack–so when you swipe the credit card, it turns it into a series of sounds. They came out with the first version. VeriFone has a similar version. Another is Intuit, who does TurboTax. All three of them are focused on small retailers that need help processing payments.
I kind of like signing my receipt with my finger on the iPad. Are we going to be seeing more of this?
I think this all stared with Apple retail stores. We sell software to retail stores. About eight years ago. Apple had a secret project where they were going to open stores. They said, “We need point-of-sale. We challenge you; here’s a Macintosh, if you can have it running [with POS software] over a weekend you’re in business.” So we won the business and supplied the POS software for Apple retail stores. Then they said. “We’d like to get rid of cash registers. They don’t really fit into the user experience. Can you help us go mobile?” They were using third-party software until they came out with the iPod Touch and got POS software for that. So they hid the cash registers behind the counter and equipped staff with the iPod Touch. It allows staff to check people out in the aisles and to email digital receipts, which is more green.
All in all, it’s gotten people thinking. We at Oracle have rolled that out in Disney Stores, Urban Outfitters and a couple other chains doing the same thing. They’re doing it with a piece of hardware we add called Sled. It’s basically a case for the iPod Touch that has a barcode scanner, application and additional battery.
You’ve cited some interesting statistics about mobile shopping—the increasing numbers of consumers using their mobile devices to research products, find stores from their current locations and actually make purchases. How are retailers responding to these trends?
Retailers have known for a long time that consumers do research online and then go into stores to buy. We consider mobile a bridge between the Internet and the store. While I’m in a store, I can use mobile to take a picture of a barcode and then get information on a product that may not fit on a shelf tag—what it’s made of, how it’s reviewed.
Amazon came out with an application that allows you to get product information either by typing in a search, scanning a barcode, taking a picture of a product or speaking the name of the product. Amazon is going to great lengths to identify the product–of course, with their prices. If they had their way, physical stores out there today would be showrooms for Amazon. People would go look at the product and then buy it at Amazon.
What are some of the coolest retailer apps out there today?
Whole Foods: You can scan a particular product and get recipes with the product. Or you can type a couple products and find recipes that use those products. Ahold in the Netherlands has a shopping list application. You can put in your list, and the first time, you go down the aisle and check things off. Then next time, it starts to reorder your list in the order of the aisles.
The QR code is the square with a bunch of black dots that contains more information. It started in Japan but is getting more mainstream in the U.S. Best Buy has put those on their shelves so you can just scan it with your iPhone and don’t have to pick up the product and spin it around to find the bar code. That’s great for customers because they get a lot of information and they get Best Buy’s price—not Amazon’s. I’ve seen [QR code] billboards the size of a building, 100 by 100 yards, and you can take a picture of that on a clear day and get information.
In your blog you talk about the “Internet of things.” Explain that.
It means all sorts of things will be put on the Internet. The reason it’s more prevalent is because WiFi is everywhere. Soon we’ll have things like our refrigerators on the Internet—it will remind us when we need a warranty check or if the temperature gets too low.
What kind of new things are you rolling out at Oracle?
We have a group called Retail Applied Research where we’re doing some fun projects, like the real-time offer engine. You go to a women’s store at lunchtime and you look for a business suit, because you always get business suits there. You check out and use your loyalty card and identify yourself. We want to be able to target you for a promotion, so we print out a coupon with your receipt. Since you identified yourself when you check out, I can see what segment you belong to–maybe female 20-something. I can look at your past purchases and see that you always buy business suits with us. Maybe I want to change your buying pattern and want you to buy high-end jeans. So by using your history it comes up with the best offer and puts it on your receipt or puts it on your phone as a text message: “Come back in a week and get 20 percent off a pair of designer jeans.”
We’re just working on it now, but technology has matured and gotten so strong that we can take individual likes and dislikes into account when marketing to customers. Of course, these are opt-in programs and not everyone is interested
The younger generation has fewer and fewer privacy concerns. Think about what they post on Facebook and Twitter. It’s really a generational thing.
What else are you working on?
Speaking of Facebook: Social point-of-sale is another opt-in thing. So they check out, and the POS system can post to Facebook, Twitter and Foursquare what you bought. You go in and buy some jeans, and it could say, “Melanie Kaplan just shopped at X mall,” the idea being to get the shopping conversation going. If you got something new, you want to tell your friends about it, but with the Internet, you can do it much faster. So your friends could reply, “What did you get?” And a conversation starts, which is good for retailers.
I can’t think of anything worse than having people on Facebook follow my shopping activity.
It would be opt-in, and targeted at teenagers.
I think I’ll stick with buying coffee an having my credit card swiped on the iPad.
If you’re going to plan for the future, you have to target teenagers today.