Mobile Payments: ‘Now’ is the time to succeed

What do Target, Home Depot, Staples, Albertsons and UPS have in common? They all have been victims of credit card data theft in the past year. Millions of dollars have been spent in anticipation of cyber crime (such as anti-virus, firewalls) and even more in the aftermath of the data theft (in reissuing cards, notifying customers, insurance and public relations to salvage brand’s image). An average of five million dollars is spent on each incident.[1] In response to the latest breach of data security, top retailers such as Gap, Nike, and Walgreens opened an information-sharing center to share threats or suspicious activities in real time to reduce the probability of data theft. As holiday season nears, these retailers would be wishing for a season without data theft while hackers would be gearing up to cash in big.

Mobile payment companies such as Level Up, Apple pay, Google Wallet and PayPal are well positioned to utilize this period to mobilize the adoption of mobile payments as well as their respective platforms through threat-opportunity framing strategy. Luckily, the problem of data theft affects both the networks – retailers and consumers – and the solution adds value to both the networks as well.

Threat Framing:

Merchants: Large investments are made for storing and securing customer’s credit card information while paying an average of 3% of the sales to the credit card companies. Still the data is at risk.

Consumers: Greater transaction time, inconvenience of waiting period to receive new credit cards and increased probability of identity theft that could have more adverse implication.

Opportunity Framing:

Merchants: Manifold benefits starting with focus on core business, reduction in data warehousing cost, reduction in liability in case of data theft, faster customer checkouts and saving on credit card processing fees.

Customers: Faster checkouts, identity protection, discounts from merchants and convenience of not carrying a wallet/multiple cards.

While threat framing must be used to convince merchants to focus on their core jobs and invest in new POS, opportunity framing must be used to explore partnerships where merchants can maximize benefits by saving on credit card processing fees and attracting more customers through promotional programs. Similarly for customers, threat-opportunity framing must be utilized to change the customer behavior by increasing the adoption and usage of mobile payment apps.

Mobile payment is a nascent industry and its adoption by consumer will largely decide its fate. The competition has already heated with Apple Pay making things interesting by adding 220,000 merchants and promising non-sharing of identity during transactions, and eBay spinning off PayPal. While each offering from different players has its own merits and advantages, the paramount factor is increasing the penetration of mobile payments as a whole. CurrentC, developed by MCX, a consortium of retail giants such as Walmart, CVS, Rite Aid, is already getting negative media coverage for forcing participating retailers to block Apple Pay and being vulnerable to hacking even before its launch. These incidents may inhibit he faster adoption of mobile payments and do more harm than good to the industry. Historically the best technology and ease of usage have been key factors in adoption of applications and consumers cannot be forced to adopt an application of merchant’s choice.

With the holiday season approaching, the focus of the mobile payment companies should be to provide as many merchants as possible with POS system that is able to accept mobile payments from all the platforms available. As the penetration of mobile payment increases, each platform can work towards increasing its share of pie through offering better technology, data privacy and participation benefits to merchants and customers.


[1] Williams, Lauren. C.; “Target, Nike, Gap, And Others Join Forces To Try To Stop The Next Big Data Breach”; ThinkProgress; last accessed Oct 29, 2014


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With over 1.2 billion reported users and close to $200B in market capitalization, Facebook is undoubtedly the most ubiquitous social network today. For most users, the core value proposition of Facebook is simple – it is a means to stay connected with their friends (and acquaintances) and to share and learn about each others’ lives. And yet, over the years and over countless tweaks to Facebook’s NewsFeed algorithm (popularly known as EdgeRank), more and more users complain that they don’t get to see any updates from a majority of their friends. Indeed, the average user has over 300 ‘friends’ on Facebook, but thanks to Facebook’s determination of what’s relevant, they are likely seeing updates from only 20% (or less) of their network. What’s going on? Why is it that I have over 1200 ‘friends’ on Facebook, yet I never see anything from almost a 1000 of those? I used to believe they simply didn’t post as much, until I checked out several people’s profiles and saw major updates I would have liked to see, but never saw, despite logging in several times a day. Why is it that I see some stories over and over for days, and several never appear?

Keep it simple….

Several hours of tweaking Facebook settings, privacy controls and reading Facebook optimization controls told me one thing – it’s complicated by design. There is a lot on Facebook that’s simple and intuitive, but customizing your experience is definitely not. There is an option to sort your feed by ‘Most Recent’ but all it does is sort the pre-selected ‘Top Stories’ into reverse chronological order of any action taken by anyone, thus being not helpful at all as it doesn’t introduce new content and in fact increases repetition. You can unfollow or block users, you can tweak content settings for people and types of content individually, or you can organize your 1200 friends in lists you then follow (like really?). For the average user, it is too much to ask, but I’d venture to say that even for power users, it doesn’t really help much.

They have the edge

EdgeRank works in mysterious ways, and the best one can gather is that Facebook measures and ranks ‘edges’ connecting any one user to another user (or Page, Group, Brand etc) by the strength, time delay and frequency of their interaction. However, only active interactions count, i.e. liking, commenting, following or sharing. So if you passively enjoy reading someone’s updates but don’t actively ‘like’ them, chances are you’d stop seeing updates from them sooner than later. This is true for both your friends as well as pages you may have liked, unless of course they pay Facebook to promote the post. The problem arises when over time you see what you like becomes you like what you see, making your Newsfeed populated by the same subset of users and content types and effectively limiting the reach of content. And lest you figure it out, they tweak (and AB test) EdgeRank all the time. So you may not even realize that the reason some of your real world friends don’t comment on your exciting Facebook updates may be that they actually never got to see it, for no lack of intent whatsoever.

“Trust us, we know what you want to see”

Let’s face it, Facebook does know a lot more about us than we think. As long as you’re signed in, Facebook knows not just what you ‘like’ and who you stalk on their website, but also most likely what articles you’re reading and what websites you’re surfing for how long. Besides, information overload is a real problem. Between friends’ updates, activities, engagement content and brands, Facebook estimates they have thousands of news stories to show every user at any point. Surely some stories are better or more important than the other for every user. But by Facebook’s own estimate, only 0.2% of these stories are ever shown to the user. With no easy way to even access the remaining 99.8% and no straightforward explanation of how those 0.2% are determined, it is unsurprising that I see check-ins every time my dorm neighbour gets down to eat and I totally missed the news of wedding and first child of my high school best friend. And these were happy stories – considering Facebook doesn’t want users to not see many ‘negative’ emotion stories, I wonder what all I’ve missed that would have been relevant to know. Or not.

It’s all about the money, honey

All this brings me to the business of Facebook. It is not so hard to gather that the purpose of ‘optimizing’ your NewsFeed is as much to show you the most relevant updates from your friends as it is to show you ‘relevant’ sponsored stories by those that pay Facebook by creating real estate. Facebook marketing is, after all, a fast growing and rather effective (for now) channel for most brands’ marketing efforts these days. One can argue that, after all, it is a free service that Facebook is providing to the users and they deserve being compensated in some way for it by selling part of the user engagement it creates to the brands who want them. And these are brands the users want too, demonstrated if not explicitly by subscription then implicitly based on their behavior as Facebook understands. Perhaps the users shouldn’t complain so much, after all. Sure, they don’t get a perfect experience and sure, there are a few ethical questions because users don’t really understand how they are being manipulated. But what about the brands themselves?

Thousands of advertisers have spent precious time and money over the years building up reach on Facebook pages, but sometime last year they realized that all of a sudden their messages weren’t being shown to all the users who had ‘Liked’ and previously engaged with their page, never mind to new users. So unless they pay for each posting, or the user is a dedicated follower who actively engages with every piece of content posted since the beginning of the change, Facebook’s reach for most brands is basically a myth and the promise of building an engaged community with two-way communication hollow. I wonder how sustainable this is, in the long run, especially as Wall Street maintains earnings pressure on Facebook and non-advertising revenue on the website continues to slip.

Bottomline, friends are not really friends on Facebook. Fans are not really fans. Don’t like the Likes too much.


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In the past couple of years, with the addition of the front facing camera on the iPhone, the selfie has not only become socially acceptable, but also incredibly popular. Instagram magnified selfie popularity with the filter. Instagram, Facebook, Snapchat, and other social network feeds are now littered with posts of “shameless promotion”.

According to the Guardian, “showing-off has never been easier and, ironically, more celebrated.” People have embraced this activity so much that there’s even a song about it. As I’ve been reading more and more about social sharing and how incredibly popular the selfie has become, I can’t help but wonder – is there an opportunity here?

Interestingly enough, recently, a Y-Combinator company called Weilos pivoted their model to be a selfie sharing community. Initially Weilos was a weight loss app that connected users with fitness coaches. As they learned more from their users, they noticed that users enjoyed posting before and after selfies. Weilos is now a social network that specifically focuses on sharing weight loss selfies and users delight in generating feedback from the community.

This made me think: If Instagram or Facebook are the main repository for selfies, could the selfie phenomenon splinter into niche segments like the online dating industry has? If we can create sub-networks, then maybe each of these networks are more likely to monetize because the focus is clearer.

A selfie community focused on beauty could be a good bet: high margin beauty products coupled with product placement in the form of self promotion. In fact, Bloomingdale’s ran a selfie beauty contest that asked users to highlight their favorite beauty items. I envision a space where users can upload pictures of themselves trying on different types of makeup and tagging the photos with the colors. This way other community members can search for cosmetics and see how they look on different skin tones and body types. The next logical step would be to buy the item or receive coupons from different retailers for where to buy the item.

With companies like Ditto Labs who offer services to scan selfies for products, it’s not so hard to envision a time where we start to monetize our faces.

http://www.cnbc.com/id/101486817

http://hyperallergic.com/122640/keeping-up-with-your-selfies/

http://www.internetretailer.com/2014/09/03/saks-fifth-avenue-embraces-selfie

http://online.wsj.com/articles/smile-marketing-firms-are-mining-your-selfies-1412882222


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Over the past semester we have identified successful mobilization for new lines of business in tech incorporate backwards compatibility, complements that may be generated by third party developers or by the core business itself, and solutions to customer pain points with significant barriers to entry.  At the same time, core product offerings can provide stand-alone value to customers through simply streamlining the interface between software users and the data they use. While many large companies have adopted software to improve productivity of individual enterprise activities, it is the recent push towards integrating business technologies onto one platform in enterprise marketing software suites (EMSS) that unlocks the opportunities inherent in holistic marketing solutions. [1]

The beginning of the twenty-first century witnessed a revolutionary incorporation of the internet with everyday communications and transactions.  This in turn generated an unprecedented volume of information, or “big data”, encompassing how consumers make decisions and how businesses operate more efficiently.   Big data analytics now facilitate myriad entrepreneurial ventures that leverage niche markets and long-tail consumer demand into viable business models.  Consequently, traditional companies in established markets have had to redesign and streamline how they serve their customers to match changes in consumer demand and increased global competition.  Enterprise software has emerged as an answer for these established companies to utilize big data analytics to guide their business strategies.  EMSS  aim to integrate a diverse range of activities including management of ad campaigns, digital assets, web content, marketing and lead resources, as well as predictive modeling. [2]  

The complexity associated with integrating diverse marketing software solutions has left EMSS development to big software players such as Salesforce.com and Adobe. In fact, the magnitude of the opportunity to create value in this space is demonstrated by the “…$3.5 billion shopping bill as it positions Salesforce as a one-stop-shop for all its customers from the sales department to, now even more importantly, the CMO’s office.”[3]   Expected benefits from EMSS consolidation of current disparate marketing and tracking software are improved visibility and collaboration between all marketing channels resulting in clear resource efficiencies and reduced total costs of strategy implementation.  Additionally, strategy development should be of higher quality and larger impact due to improved ability to create holistic solutions aligning company offerings with customer expectations. As of yet, it seems that no one EMSS incorporates both best-in-class software and seamless integration [4].  It will be interesting  to watch how the current digital marketing integration leaders discussed above shape the convergence of real-time data analytics and holistic marketing strategies to transform online and mobile commerce as they further penetrate our global economy.

1. Teradata http://applications.teradata.com/Big-Data-Hero-eBook/Landing/.ashx (October 30, 2014)

2.  Teradata http://applications.teradata.com/Big-Data-Hero-eBook/Landing/.ashx (October 30, 2014)

3. Salagar, Serge, “Salesforce’s Reinvention as a Marketing Behemoth”, http://techcrunch.com/2014/10/29/salesforces-reinvention-as-a-marketing-behemoth/  (October 29, 2014)

4. Munbach and Warner,  “Forrester Wave: Enterprise Marketing Software Suites, Q4 2014” http://www.adobe.com/solutions/digital-marketing.html   (October 21, 2014)


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My fascination with OpenSky began three years ago when I followed an ad showing Alicia Silverstone (yes, yes, I am guilty of liking Clueless) selling organic cotton hoodies. I signed up on OpenSky, which was exploring a new business model that turned bloggers and key influencers into direct marketers. Celebrity chefs, yoga instructors, and of course, Alicia Silverstone, had storefronts on the website where they recommended products from their favorite small businesses. This gave great exposure to the SMBs via this affiliate network of independent bloggers. How many of us wish we knew what moisturizer Jessica Alba is using or want to buy the mortar and pestle Robby Flay uses to create wonderful culinary concoctions? Well that was what OpenSky was going to tell us. Sadly, that OpenSky is now in the past.

The company pivoted in 2012 and the new OpenSky is Pinterest meets Facebook meets Etsy. The key influencers have been replaced with a direct vendor model where the seller maintains a storefront on OpenSky, lists product and ships it to the customer. This model is very similar to that of Etsy, with one big difference: the social component. The platform has evolved towards peer-to-peer shopping. Members can choose to “follow” different sellers, “love” items, leave comments and questions, etc. All these interactions are completely public so customers become key influencers themselves. OpenSky claims to “democratize commerce by making connections between creative and passionate small businesses and shoppers who crave quality and diversity.” From curated content to an open platform featuring SMBs, OpenSky has created a novel channel for cash strapped businesses looking for low cost methods of reaching a nation-wide audience. With this, OpenSky has done what Etsy and companies like Etsy are struggling to do: connect shoppers and make unique product discovery easy and fun. This also creates sticky customers who have a high return and repeat purchase rate.

Founded by Kevin Ambrosini, Alan Blaustein, and John Caplan, the startup has raised $49.4 million in five rounds of funding. Investors include Highland Capital Partners and Canaan Partners. The company is beginning to roll out distribution programs to its sellers via small pilots that provide OpenSky packaging and shipping timelines (typically an item ships within 48 hours of receiving the order) to help with branding and marketing. It is partnering with LivingSocial and Sears.com to drive wider adoption and awareness. There are also CRM tools and dashboard analytics to help SMBs better understand their business, revenue drivers, etc.

The biggest question in my mind is whether this model of social commerce will disrupt traditional e-commerce? It is, of course, too early to tell as of now but the traditional giants such as Amazon need to keep an eye on how this business evolves. While the usual features of providing reviews and ratings currently exist on most e-commerce websites, OpenSky has created a community of shoppers that is stronger with substantial direct and indirect network effects. With shoppers “following” other shoppers, a member’s newsfeed is populated with all the ‘loves” or products favorited by the shoppers he or she is following. This creates an innovative approach to product discovery, different from the usual search and browse functionalities.

It will be interesting to watch OpenSky and its next strategic moves in the social commerce space. With competitors such as Etsy catching up via the implementation of similar social media and networking elements, and low barriers to entry in this space, OpenSky will need to achieve growth and scale quickly in order to retain its first mover competitive advantage and innovate constantly to stay ahead of copycat concepts.


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