advertisement
advertisement
advertisement

In Game Of Mobile Tag, Microsoft Finds Few Retailers Willing To Be “It”

Written by Evan Schuman
October 21st, 2010

Microsoft’s mobile-barcode strategy is, arguably, the most ambitious in retail. It pushes a view of mobile payment, customized pricing and extensive CRM data. Although a handful of retailers—including Best Buy, Whole Foods and the Jones Group (Anne Klein, Nine West, Gloria Vanderbilt, etc.)—are experimenting with Microsoft Tag, none is using its interactive capabilities.

That poses a problem. Without those rich interactive features, it’s simply a way to get additional information about a product. But it doesn’t meaningfully go beyond 2D barcodes and NFC efforts. Some chains are frightened to even experiment with systems that are not only IT intrusive (they need to integrate deeply into many back-office programs) but may raise privacy issues. Without such trials, though, retailers have no way of assessing whether the privacy concerns are real or simply imagined. Consumers might love the advantages, if given a chance to try them.

Here’s the future envisioned by Redmond. Customers turn their mobile phones into their loyalty cards. As they browse physical aisles, they can point their phones at these tags and, beyond product information and demos, be shown pricing individualized for them based on their membership level (for a warehouse membership club), the dollar value of historic purchases, particular purchases they have made or their demographics.

That customized pricing could also reflect short-duration sales, as in “This product will cost you $32, which is an $18 savings. But if you buy it within the next hour, it will cost you only $21.”

Mobile payment would allow the customer to scan and pay for a tagged item on the spot—using an already established payment card on file—thereby sparing the customer the checkout lane.

The beauty of the system is the potential CRM integration, which would allow retailers to have a thorough record of not only every purchase (which they already have) but every product the consumer seriously thinks about. This approach assumes that a serious interest would likely merit a quick scan to learn more.

Bill McQuain is the Microsoft business development director overseeing Microsoft Tag. He said that, despite strong interest in some of these capabilities and trials of the most simple features, no one has yet agreed to even try the interactive potential.

“There is a fair amount of heavy lifting” required to tie the tags into IT back-office systems, McQuain said, along with “security and privacy concerns. As much interest as there is, this will be a much longer sales cycle. Integration into mobile payment is probably a ways off.”

Some of the potential sources of data-sharing have already been cut off by Microsoft, McQuain said. For example, every customer has a unique identifier, which Microsoft calls the device ID. But that ID changes with every retailer to prevent one chain from learning about what is being purchased or examined at another chain.

“We don’t allow Best Buy to see the device ID of Whole Foods,” he said. “It would be very scary for the consumer.” Yep, but it might also freak out the retailer whose data was being viewed by a rival chain. Then again, it might be an extremely attractive method of getting a more global view of a customer’s interests.

Best Buy has started experimenting with the tags in the Southern California territory, deploying 8 to 10 tags per store, McQuain said, doing things such as showing mini-tutorials and game trailers.

Whole Foods is trialing the tags in the Northwest, using the system to, among other things, display recipes.

Some initial trials outside of retail have shown sharp increases in participation in contests and whatnot, McQuain said, citing tag participation in one trial as 2.5 times more active than PC participants. He added, though, that those high initial numbers may not last.

“There is certainly some novelty factor,” McQuain said, explaining that some drop off is expected.

Microsoft sees a few ways of getting into retail environments: directly through retailers; through manufacturer deals; and sometimes through arrangements with shopping malls (the Mall of America and Westfield are already involved in trials).


advertisement

Comments are closed.

Newsletters

StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!
advertisement

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

StorefrontBacktalk
Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.