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ID’ing Customers Should Be Easy—If Only Mobile Carriers Can Get It Together, Says JCPenney CIO

April 21st, 2011

That way, when a customer walks in the door, her phone will switch its connection to the in-store mobile tower. She’ll be able to use her phone in all the ways that M-Commerce suggests she should be using her phone—and from the point of view of mobile carriers, burning minutes and megabytes on her data plan.

With a guaranteed signal inside the store, mobile carriers can get serious about mobile payments. If there’s no in-store phone signal, the carriers have no advantage over anyone else who wants to jam a near field communication (NFC) chip into a phone. But with a guaranteed signal, carriers can authenticate customers, confirm transactions and even put purchases on phone bills.

And with the right technology, mobile carriers could identify the loyalty customers for a particular store’s chain as soon as the customer walks in and the phone connects to the in-store mobile signal. The mobile carriers would just need a list of those customers’ phone numbers to compare to the phone numbers that are connecting to the in-store signal.

Or maybe some retailers would prefer to send a text message to every phone that comes in the door, loyalty-program member or random customer. That would be even easier: Mobile carriers would just pass each phone number that comes into range along to the store, which could figure out who’s a loyalty customer (and would get a targeted offer) and who just gets a generic offer.

That way, nearly every customer who walks into the store would be immediately identified by phone number. And if customers also use their phones for payment, this could provide a huge trove of new CRM data.

That’s something retailers would have a reason to pay for.

Does all this represent a massive invasion of privacy? Potentially. Retailers would have to work out security issues, including where that list of loyalty customers’ phone numbers will live. Trusting a retailer’s customer data to the phone company isn’t going to make anyone comfortable. (One workaround: As mobile users arrive in the store, pass all the phone numbers directly from the mini-cell tower to the store’s systems, which could then do identification and message sending.)

There’s also a risk that sending an unrequested text message will annoy customers instead of entice them. Loyalty customers might be willing to opt in; for non-loyalty customers, retailers will have to think carefully about what type of discount or coupon is likely to make the message an incentive instead of an irritant.

None of this is outside the technical capabilities of mobile carriers. The big question is whether they’ll be able to work out how to bundle in-store cell signals and mobile payments.


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