AllThingsD » consumers

Avon Is Late to Social Media's Party

Emily Glazer — Mon, 23 Apr 2012 21:03:24 +0000

The Avon Lady needs to spend more time on Facebook.

Avon Products Inc., famous for sending its representatives door to door, is losing traction in the U.S., where many time-stressed consumers are increasingly buying their cosmetics on the Web. Operating profit per representative in the U.S. has plunged 75 percent over the past decade, according to an analysis by Sanford C. Bernstein.

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Seven Questions for Steve Felice, Chief Commercial Officer of Dell

Arik Hesseldahl — Mon, 16 Apr 2012 14:44:32 +0000

Dell feels like the company that people used to fear but don’t anymore. There was a time, in the late 1990s and the early part of the last decade, when its competitors feared “the Dell effect”: The relentless driving down of selling prices on PCs and servers that made it difficult to compete.

We all know how that turned out. Dell first conquered the PC market, and the ultracompetitive environment it created drove several companies out of the market: IBM sold its PC business to Lenovo; Gateway sold itself to Acer; Hewlett-Packard acquired Compaq. Other lesser players are all but forgotten.

It’s as if Dell was a victim of the hyperefficient world it created. HP is now the world’s biggest PC maker, followed by China’s Lenovo, with Dell in third place on a global basis, as of last quarter.

PCs — consumer and business PCs — still amount to about half of Dell’s business. But there’s another way to look at Dell, and that’s from the point of view of its enterprise business. I learned this in a recent conversation with Steve Felice, Dell’s chief commercial officer. I also learned that the consumer PC business, for which Dell is still widely known in the U.S., amounts to about one-fifth of its business, while its enterprise lines of business, including commercial PCs, amount to 50 percent.

It’s all part of the long-term transformation that has been underway at Dell for a few years now. The company recently did three acquisitions in as many days, the most significant of which was for Wyse Technology.

That caught my attention. But first I wanted Felice’s reaction to the findings of a J.P. Morgan survey of 100 CIOs, saying that the release of Microsoft’s Windows 8 wouldn’t be much of a catalyst for PC buying at large companies.

(We had a pretty good talk, so, arbitrarily, I left in an eighth question from our exchange.)

AllThingsD: Steve, there’s a survey out from J.P. Morgan recently that says that CIOs from large companies don’t see Windows 8 as the sort of thing that would get them buying PCs again. That, to me, could be interpreted as bad news for Dell. Is it?

Felice: I don’t think so. Operating system changes have never been a catalyst, at least not in the corporate world. Consumers and small businesses take off with it right away. Corporations have rollout schedules, and they stick to them. Some of them are just starting to deploy Windows 7. They do their three-year roll-out schedules, and when it’s time they’ll go to Windows 8. About 55 percent of our business are the larger mid-sized and up public companies. The other 45 percent are small businesses and consumer. We’ll see some buying within that 45 percent. On the others, they will go on their normal schedule.

On the enterprise side, I was just with a bunch of CIOs here, and there are some very common themes about why I think they are going to spend some money. And it’s really to continue a transformation of their own infrastructure, to take advantage of virtualization and cloud computing and bigger pipes to transport information. There is a pretty common theme that there is more opportunity to get more out of assets. There is more optimism around moving away from legacy architectures and into open systems. The whole concept of being more “open to open” is there. We view that as good, because we’re the pure play when it comes to moving to open architectures.

What are the CIOs you talk to worried about these days?

Security. It’s easily in the top three concerns. We think we added to our portfolio two of the best assets out there. One is intended to tell you how to figure out what’s going on in their world. That’s what SecureWorks, a company we acquired recently, does. It analyzes your infrastructure and tells you where your threats are coming from and how to prevent them. And then we just announced the acquisition of SonicWall. They built a nice unified threat-management platform. From my viewpoint, it helps enable the movement to open. Some people are afraid to leave the proprietary world because they think it’s more secure.

Where are you on mobile? I read that you just killed a smartphone model. Where is Dell going on the mobile front?

I would characterize the last couple of years as us experimenting with what form factors and operating environments will work. The good thing is that we’ve never overextended ourselves in mobile, yet we’ve launched a lot of products, and we’ve learned a lot from them. We’ve launched tablets — 5-inch, 7-inch, 10-inch. We’ve launched them in emerging markets first, we’ve launched them in developed markets first. We’ve launched smartphones around the world. So we have an active smartphone that we just launched in China, and one in Japan. We just end-of-lifed one in the U.S., which is what I think you’re referring to. We have a road map of other products that are coming up. We are predominantly a commercial-oriented business that has some consumer business, but the lines are blurring.

What we’ve learned is to look at the consumer from the commercial side, not the other way around. Some companies who have done well in mobility are all about consumers and entertainment. And looking at the consumer as an individual, without any regard to how they might interact on the professional side of their life. Executives of any company I talk to say these devices are driving them crazy. They don’t know what’s happening to their information, how they get it back, nor how to interact with the other devices that people are bringing into the workplace. Or how to support them and control them. No one is dealing with that. So, generally, you’re going to see Dell think more broadly about the mobile ecosystem. When you next see devices from Dell, you’ll see us thinking more about the security of them, the end-to-end aspects of managing them, from the data center to the end user.

And yet what I’m hearing from a lot of companies is that they’re just adopting iPads, mainly because the bosses have them and love them. This is how Apple is penetrating the enterprise. How is Dell going to compete with that?

It’s unique, no question. And so it’s got some infatuation aspects to it. But then I talk to these customers, and because there isn’t a lot of alternatives, what they’re tolerating is pretty interesting. They say they have one of those products. Then the problems start coming out. First, the office applications don’t work very well, and they have trouble reading PowerPoint decks. And then they can’t wirelessly print easily, and some days they’re not able to get on the network at the office. And I look at that and say, they’re tolerating a lot because they like the form factor. Our conclusion is that there need to be some alternatives.

We’ve got the Dell XPS 13 Ultrabook, and we take it around and show it to customers, and invariably the decision-maker wants one. And then he says that if he had this, he never would have bothered with the tablet. So we took a consumer-oriented product and put pro support on it, and showed that to CIOs and said that if their executive team used it, they’d get the same support as they would on their Latitude product. So when it breaks, someone will come to the office and fix it, and you don’t have to go stand in line at the Apple store. Then we put image management on it. If you want a corporate image that has to be managed, we’ll do that. Institutions want thin and light devices, but they also want the options to secure and support them. The other thing that is happening, with ARM, you’ll get even more form factors.

Well, let’s talk about the PC, then. People keep talking about the decline of the PC. The research houses keep predicting market declines, and sometimes they materialize and sometimes they don’t. But even so, the numbers — at least globally — are flat to slightly up. Yet when you drill down to different regions, you see very different stories, with different countries growing like crazy. How does Dell see this right now?

This is a weighted math problem. The lowest growth rates are in the developed world, which will remain more of a replacement cycle world. The U.S. is like that because PC penetration is very high. Then you go to India and China, where it’s very low. What’s happening is that the emerging markets, where combined, they will be bigger than the developed world. And they are still growing rapidly, so the math is going to reverse itself. You’ll still see low-single-digit growth rates in the developed world, but healthy growth rates in emerging markets — but the emerging markets will be bigger. We still see double-digit growth in China. Look at Indonesia, there’s 300 million people just starting to buy PCs. As these countries industrialize and get more mature, they just need basic computing.

And how do those markets develop?

It comes back to the first thing I talked about. These countries don’t have the legacy baggage. They’ll grow, they’ll industrialize, they’ll need more infrastructure. And what will they buy? They’ll buy standard servers, storage, and open systems. This is happening in China, and its why we’re No. 1 in servers there.

Do you think people still associate Dell with the PC and don’t give it enough credit for its greater focus on the enterprise?

I’d have to say yes. Some of that is our own doing. We have this very large direct model, and we have a tendency to talk to customers one on one. So we tend not to do a lot of brand advertising. So our consumer advertising is more visible. If you ask people randomly what portion of our business is consumer, they’d say it’s more than half, but in fact it’s only about 20 percent. And if you ask people what portion of our business is servers and storage, they don’t know, but it’s more than 50 percent.

If you combine consumer and commercial PCs, how much is that?

About half is PC, and that’s global. But I think with all the acquisitions we’ve done, and a lot more customer testimonials we’re doing, the perception is changing. We’ve done some targeted testing of campaigns where we say, ‘Do you know that Dell does this?’ The perception of Dell as an enterprise provider skyrocketed. Brazil is an interesting case, because we entered the server and storage market there before the PC market. That’s because the only way to really be successful in Brazil with PCs is to have your own manufacturing there, because of the stiff tariffs. So in Brazil, Dell is thought of as an enterprise company. You’ll see more of a commitment this year to do more brand-oriented advertising around the enterprise.

More TV Buyers Look to LED Screens

Lauren Goode — Thu, 23 Feb 2012 21:23:35 +0000

For the first time, more U.S. TV buyers are looking to purchase LED TVs rather than cold cathode fluorescent lamp (CCFL) TVs, according to a new report from IHS iSuppli. Consumers who planned to buy an LED-backlit TV jumped to 54 percent in the last quarter of the year, a 32 percent increase from the third quarter; the share of CCFL-backlit LCD TVs dropped to 25 percent from 56 percent. The report comes just a couple days after Samsung, the world’s largest LCD-panel maker, said it would spin off its LCD business to focus more on higher-margin OLED screens.

PayPal Says It's Full Speed Ahead on Mobile Payments After President Resigns

Tricia Duryee — Mon, 06 Feb 2012 15:00:37 +0000

When Scott Thompson announced he was stepping down as president of PayPal to become CEO of Yahoo, the company was shocked.

But a month later, both PayPal and its parent company eBay say they have the depth of leadership necessary to execute its plan to enter the world of in-store payments.

In an interview, David Marcus, PayPal’s VP of mobile, made the case for why its mobile payments strategy will prevail in a market surrounded by incumbents like Visa, MasterCard and American Express, as well as new entrants like Google.

On the matter of Thompson’s departure, he downplayed the role of one executive.

“The strategy wasn’t one man’s thing,” he argued. “It was a shock for 24 to 48 hours, but we control our destiny, and it’s about execution now. So far, so good.”

In addition to speaking to Marcus and several other executives, AllThingsD got an exclusive look at the company’s newly constructed “Shopping Showcase,” which will be used to demonstrate to potential partners how it envisions next-generation payments will occur at the register.

From the ground floor of the company’s San Jose headquarters, it has built several realistic-looking facades, including a hardware store, a grocery store, a clothing store and cafe; users can walk from one experience to the next. I also tried out the experience of making a real purchase at Home Depot, where it is currently being piloted at many San Jose-area stores. (See the slideshow here.)

To be sure, Thompson’s departure was abrupt. He gave PayPal only 15 hours’ notice before the planned announcement that January morning by Yahoo.

But the company now maintains that its strategy for the next two years had long since been cemented, making it much easier to absorb the blow.

Over the next few years, PayPal will be trying to take its online relationship with 106 million consumers worldwide into the physical payments world, by extending its digital wallet services to cash registers at grocery stores, hardware stores and other retail locations.

It plans to do this through a series of different technologies, including PIN codes, credit cards and other services.

Meanwhile, other providers are trying to attack the market using near field communication, where users will tap their mobile phone at the register in order to pay.

Google, Visa, MasterCard and a consortium of wireless carriers, including AT&T, Verizon Wireless and T-Mobile, are all working on similar solutions, which will require retailers and consumers to upgrade their point-of-sale technology and mobile phones, respectively.

“Yes, NFC will be useful, and we’ll be there, but today we are trying to do more than replace swiping with tapping,” Marcus said.

He envisions shopping becoming a more fluid experience. Today, you pick out the items you want, place them in your shopping cart and then stand in line at the checkout.

But in the future, he asks, why couldn’t that change? What if you paid for items in the store’s aisles, or purchased them online before picking them up in the store?

NFC can be restrictive, because you have to be at a physical location in order to tap a terminal and pay.

The scenarios are possible, given how fast things are already changing.

Last year, PayPal exceeded its own expectations, reaching $4 billion in mobile payment volume. This year, it expects to increase that to $7 billion. One of those purchases last year was a $40,000 backhoe, which someone bought using PayPal on their phone.

“By the time NFC catches up, we will be in a world that will move away from the point-of-sales terminal,” he predicts.

As with PayPal’s traditional business, it expects to make money on fees, also called the interchange rate, which the retailer is responsible for paying. Its goal is not to provide a cheaper solution than the incumbents. Rather, it wants to provide other perks that will help retailers and provide incentive for the retailers to want to work with PayPal.

Such perks could include platforms that will allow the retailers to offer loyalty programs, shopping lists, credit options or coupons.

“If you add a payment method that adds 30 to 40 percent more volume [in business to the retailer], then the interchange doesn’t matter,” Marcus said.

Here's How PayPal Is Pitching Mobile Payments to Major Retailers (Slideshow)

Tricia Duryee — Mon, 06 Feb 2012 14:30:42 +0000

During a recent visit to PayPal’s San Jose headquarters, I got an exclusive look at the company’s brand-new Shopping Showcase.

Completed two weeks ago, the showcase is designed to woo major retailers and other potential partners that may be considering adopting PayPal’s mobile payments services.

The room includes several realistic-looking facades, including a hardware store, a cafe, a grocery store and a clothing retailer.

In each scenario, it demonstrates how it uses a mix of new technologies, offers and loyalty programs to make it faster and easier to and pay and stay engaged with the retailer.

What you won’t see is demonstrations of near field communications, which is a technology being used by many of its competitors. (To learn why it is not using NFC, read an interview with PayPal’s VP of Mobile David Marcus, coming later today.)

I also visited Home Depot in San Jose to buy something using my PayPal account. The service is now live at many of the Bay Area hardware stores.

Today, PayPal is one of the leading online payments companies, with 106 million users worldwide; but this year, the eBay-owned company is attempting to move offline, by partnering with retailers like Home Depot and other major chains to be announced later this year.

Here are the photos from the Shopping Shopping Showcase and Home Depot shopping visits:

View the slideshow

An Online Marketplace for Everyday Household Items Snags $3.6 Million

Tricia Duryee — Tue, 31 Jan 2012 17:00:17 +0000

Alice.com, an online marketplace for household goods ranging from diapers to dog food to toothpaste, has raised $3.6 million in funding. A bit like Amazon-owned Diapers.com, the Middleton, Wis.-based company allows big brands to use the platform to connect with consumers and offer coupons. The round, coming from a group of Spanish investors, closely follows Alice’s expansion to Europe through Alice.es. The company has raised $18.2 million to date.

Google Spends for New Consumer Education Campaign

Tom Loftus — Tue, 17 Jan 2012 22:33:22 +0000

Google today rolled out a new effort designed to educate consumers on technology terms like “cookies” and “IP addresses” and explain a few things about privacy online.

Google calls its effort “Good to Know,” and it’s a continuation of a campaign that began in Europe in the fall. Beyond the obligatory website, which features how-to videos, the campaign incorporates online and print advertisements in newspapers and magazines nationwide as well as advertisements for straphangers in New York and Washington D.C. subway stations. Google says Good to Know is its largest consumer education campaign. A Google spokesman said the company is spending “tens of millions of dollars.”

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Tweeting Without Fear

Elizabeth Holmes — Fri, 09 Dec 2011 08:00:25 +0000

Who would have thought typing such short messages could be so tricky?

By now, even the stodgiest companies have found their way onto Twitter. They have discovered it isn’t just another marketing channel with a funny name, it’s more like a conversation they need to join or risk losing influence over how consumers view them or their brands.

The service, which lets users send 140-character texts, or “tweets,” to people who have signed up to follow them, has proved to be an effective way to reach younger consumers and to help build a brand.

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Digital Snickers Alert: Google Wallet Is Coming to a Vending Machine Near You

Lauren Goode — Thu, 01 Dec 2011 16:00:09 +0000

There might now be one less reason to kick the office vending machine — consumers will soon be able to pay for their snacks with a smartphone, as well as send real-time complaints about their Snickers stuck in a spiral.

Cantaloupe Systems, a Bay Area-based start-up that provides tech services for vending machine operators, has been working to deploy near field communication-enabled payment terminals at vending machines in San Francisco, Chicago and the mid-Atlantic region.

But not for hungry Apple iPhone users, since the NFC technology that is being installed only works with Google’s one-tap payments app for Android-based smartphones, called Google Wallet.

Cantaloupe co-founder Anant Agrawal said that Google Wallet-equipped vending machines will feature prominent stickers so consumers know which machines work with the app, and that eventually operators and even Google could send coupons and rewards to users as they purchase snacks.

For vending operators in the U.S. — there have long been such technologies in places like Japan — one-tap mobile phone payment could be a much-needed boost. From 2008 to 2010, vending machine sales fell 18 percent to $19.25 billion, according to an industry report from Automatic Merchandiser.

This is attributed mainly to a high U.S. unemployment rate — fewer people working means fewer people in offices, and office purchases account for 80 percent of all vending machine spending. Consumers are apparently not buying snacks at theme parks and airports, either.

Still, using a smartphone to pay at vending machines is a long way from becoming office protocol. Google Wallet is currently only available on one smartphone, the Sprint Nexus S 4G phone.

And while Cantaloupe said it has installed 6,000 NFC bezels so far, that’s a small percentage of the 80,000 machines in Cantaloupe’s network, and an even smaller fraction of the six million vending machines across the country.

In addition, while industry reports show vending operators are investing in new technology, many still don’t even accept credit card payments, because the benefits of easier payments don’t outweigh the transaction fees on low-margin items such as snacks.

Nonetheless, some think the ability to offer more coupons and rewards in the future is worth the investment in the tech now.

Mark Stein — whose company, Mark Vend, operates 2,000 vending machines in businesses, hospitals and universities in the Chicago area — plans to install NFC-enabled bezels on half of his machines by early 2012.

“It takes a long time to get the infrastructure out there,” he said. “But as more and more people do mobile banking, I think they’ll want to do more purchasing with their mobile phones.”

High-tech vending machines might have another benefit, too. With the introduction of compatible mobile apps, consumers could potentially request that certain items be included in the next round of snacks, and send immediate complaints when a machine is malfunctioning.

In other words, no more snacks stuck in vending machine purgatory.

Zappos Founder Focuses on Brand Loyalty for His Next Gig

Tricia Duryee — Wed, 16 Nov 2011 16:12:16 +0000

As soon as Nike agreed to start selling merchandise on Zappos, founder Nick Swinmurn stopped wearing Adidas and became a huge fan of the Nike brand.

“I have about 50 pairs of Nikes in my closet, and it seemed to me like I should be treated differently by Nike than a customer who has zero pairs,” he said.

The thought inspired Swinmurn to start RNKD, which is launching in beta today. Customers can create profiles and upload pictures of items of clothing they already own by snapping a picture and designating brands and where they bought each piece.

“The idea was to bridge the gap between consumers and brands by using what people already have in their closets,” Swinmurn said.

Users will be rewarded with badges and points for uploading photos, and will have the opportunity to win gift cards based on their participation. Swinmurn believes brands could use RNKD as a way to offer clothing at a discount to their most dedicated fans.

The emphasis is on the brand, rather than the store at which the apparel was purchased, which is how many other loyalty programs are designed.

Swinmurn, who left Zappos before it was sold to Amazon, also gained inspiration for RNKD after starting a small clothing line called Dethrone, which creates gear and clothing for practitioners of mixed martial arts. He said he sells 99 percent of the apparel to small shops. “We have no idea who walks into the shops and buys the product,” he said.

Swinmurn is hoping to tip the market on its head. Brands are already giving discounts on clothing at stores like Ross and T.J. Maxx, and on online flash sales sites like Gilt Groupe, ideeli and Rue La La. But those discounts aren’t being given to the biggest fans of the brands.

Instead, Swinmurn argues, discounts should go to consumers who deserve them.

RNKD is based in San Francisco, and is self-funded by Swinmurn, who has an engineering team of one.

Many Outlets, One Voice

Sarah E. Needleman — Mon, 14 Nov 2011 12:45:05 +0000

When it comes to social media, franchisers are making sure their franchisees speak with one voice.

Lots of businesses are putting together social strategies. But franchisers face unique problems, since they’re made up of multiple units. Without an overall company policy, franchisees may adopt different online approaches, potentially causing confusion for consumers.

So, franchisers are implementing systemwide strategies and policies on what to post and how to react to company-related chatter. In some cases, they monitor social-media traffic and jump in to resolve disputes or answer complaints about outlets.

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A Guide for PC Buyers Not Looking for a Tablet

Walter S. Mossberg — Thu, 10 Nov 2011 02:02:27 +0000

If you’re shopping for a laptop this autumn, you’ll find most of the capabilities and prices in the sluggish market unchanged. You’ll still likely be considering whether it’s time to get a tablet instead of a new laptop.

[ See post to watch video ]

But if you’re focused on a Windows machine, and you look carefully, you’ll see that a new class of portable PC is beginning to appear. It’s called the “ultrabook,” and is essentially the Windows version of Apple’s popular, nearly four-year old MacBook Air—an ultraskinny, light, speedy, versatile laptop with long battery life.

The arrival of the ultrabook is a welcome development, not only because it spices up the market, but because I consider the MacBook Air the best all-around consumer laptop available, and anything that emulates it is a good idea, if done well.

There are only a few ultrabooks available this season and they aren’t for everybody. Most have limited storage and, like the MacBook Air, are priced near the $1,000 range—rich territory in a tight economy where Apple buyers seem comfortable, though not many others. Still, this new class of Windows laptop is the only fundamentally fresh choice in the laptop market.

If the price is too high, you should be able to get a capable major-brand laptop for between $500 and $800, with plenty of storage and memory.

My annual fall laptop buyers’ guide today offers tips for wading through the technobabble in computer ads, and in online and physical stores. As always, these tips are for average consumers doing common tasks, such as email, Web browsing, social networking, general office productivity, photos, music, videos and simple games. This guide isn’t meant for corporate buyers, or for hard-core gamers or serious media producers.

The recently unveiled Asus Zenbook

The tablet question: Tablets like Apple’s iPad 2 and Samsung’s Galaxy Tab 10.1 can perform many, though not all, of the functions of a laptop. Most tablet lovers find themselves reaching for their laptops less often to do things like email. If your budget is limited and you’re thinking of shelling out $500 for a full-size tablet, consider whether you can put off getting a new laptop this year instead of buying both.

Future Windows: If you’re shopping for a Windows laptop, be aware that in 2012, Microsoft will offer a new version of Windows, called Windows 8, with a radical new multitouch interface that makes use of a touch screen. The software giant stresses that Windows 8 won’t require such a screen, and will still work with a mouse or touch pad. But unless you have a laptop with a multi-touch screen, you won’t be able to take advantage of the Windows 8 touch-screen features.

Ultrabooks: Four companies make this class of laptop: Acer, Lenovo, Asus and, shortly, Toshiba. These machines are under 0.8 inch thick, weigh less than three pounds, and generally claim long battery life and almost-instant startup times. All run Windows 7; none has a touch screen. Like the MacBook Air, they use solid-state drives (though some combine these with standard hard disks) and have screens of either 11 inches or 13 inches. Prices generally run from around $900 to $1,100.

Windows vs. Mac: Mac laptops cost more and offer less variety than Windows laptops. The least expensive Mac laptop is $999, while a few stripped-down Windows portables can be had for under $300. Well-equipped Windows laptops start at $500 to $600. But Apple laptops combine beauty, ruggedness and long battery life with good customer service. Macs also come with better built-in software, including the new Lion operating system, which includes some tablet-like features. And they can run Windows, at extra cost.

Finally, Mac users don’t fear viruses and other malicious software, because virtually none work on the Mac.

Memory: Get at least 4 gigabytes of memory, or RAM, on a new Windows computer. On a Mac, most consumers can get away with 2 gigabytes.

Processors: Intel’s latest chips are the i3, i5, and i7 Core models. But a laptop with chips from rival AMD, or older Intel dual-core chips, also is OK.

Graphics: Usually less expensive machines have wimpier graphics hardware, and costlier ones have more powerful graphics. Better graphics can make your whole machine faster, because more and more software is designed to offload general processing tasks onto the graphics chips.

Hard disks: A 320-gigabyte hard disk should be the minimum on most PCs. Solid-state disks, like those in the new ultrabooks or the MacBook Air, generally come in sizes of 128 GB or 256 GB. They omit moving parts and use flash memory to store your files, as on a smartphone or tablet. They are costlier, but faster, and use less power.

Ports: Many PCs now come with a port called HDMI, which makes linking to a high-definition TV easy. There is a new, much faster USB port, called USB 3.0, but few peripheral devices can use it. And Apple has introduced yet another high-speed connector that has little practical use so far, called Thunderbolt.

As always, be wary of sales pitches and don’t buy more laptop than you need.

Email Walt at mossberg@wsj.com.

Square Tweaks Mobile Payments -- Now Hands-Free!

Tricia Duryee — Wed, 02 Nov 2011 14:00:56 +0000

With mobile payments, we’ve seen the tap, the swipe, the passcode and all sorts of other innovations.

But in this game of one-upmanship, Square has thrown down the gauntlet by announcing this morning that it has made the payment process hands-free.

The San Francisco company, which was recently valued at $1 billion, said it has made it as easy to pay as saying your name.

A new version of its application, called Card Case, will leverage geo-fencing capabilities in Apple’s latest operating system update for the iPhone. The technology will identify when a person is within 100 meters of a favorite merchant.

Square’s Director of Products Megan Quinn explains that when a shopper is within range, a tab at that establishment will automatically open — without that person ever touching his or her iPhone. Once the user places an order and goes to pay, all they have to do is give their name.

The merchant will see on its iPad that a tab has been opened in that person’s name from inside the Square app.

Once a customer gets outside of the 100-meter range again, the tab will automatically close, whether a transaction was conducted or not. In theory, this means it would only be open for a few minutes if the shopper simply walked by a coffee shop and didn’t stop.

In addition to having to have an iPhone with the latest operating system, the consumer will also have to designate shopping establishments at which tabs could be automatically opened.

Since Square opened it up eight weeks ago, 20,000 merchants nationwide have joined the Card Case app’s directory.

In May, Square unveiled its mobile payments strategy for small retailers, including the iPhone and Android applications for consumers and the iPad software for merchants. Before that, it had focused primarily on allowing small businesses to accept credit cards using a swipe accessory plugged into a smartphone’s headphone jack.

Quinn said the most obvious benefits to the new features are speed and ease of use; however, there’s a more touchy-feely reason, too. “We’ve removed the artifacts from the experience, so it’s about the interaction between the merchant and the customers.”

In other words, it’s like walking into Cheers, where everybody knows your name.

[Photo credit: Wikipedia.]

Facebook's Brand of Loyalty

Emily Steel — Mon, 03 Oct 2011 11:30:24 +0000

Companies have spent the past few years trying to amass Facebook fans for their products and services. Now they’re trying to figure out how to squeeze value out of them.

That’s prompting marketing companies to develop new offerings that seek out more detailed information about Facebook fans, with the aim of sending targeted messages, offers and promotions.

Merkle Inc., Lithium Technologies Inc. and other marketing companies are helping companies build applications for consumers to download on Facebook, which will allow customers to access a company’s loyalty program, what promotions they might qualify for and check their points. In exchange, the consumer gives the company permission to access their personal information like name, gender and email address on the social-networking site.

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Wrapp to Open Up Its New Group-Gifting Service in the U.S.

Tricia Duryee — Tue, 27 Sep 2011 23:48:46 +0000

You’ve heard of “group buying,” where large masses of people commit to buying something at a discounted price. Now a company is pitching the idea of “group gifting.”

A Swedish-based company called Wrapp is creating a new way for people to easily give gift cards to their friends through social channels like Facebook, where mutual acquaintances will also be able to contribute additional funds to the card if they wish.

To provide incentive to consumers, Wrapp is partnering with retailers to give the first $5 or $10 off the card.

The logic is that no one will actually give only the minimum. But even if they do, it might drive traffic to the stores and get consumers to buy something when they normally might not have.

Wrapp was founded by a number of successful entrepreneurs from companies you’ve probably heard of.

The company’s co-founder and CEO, Hjalmar Winbladh, previously helped start Sendit, a mobile Internet company purchased by Microsoft; he later co-founded Rebtel, a mobile VoIP company. Also participating is Andreas Ehn, the founding CTO of music phenom Spotify, and Carl Fritjofsson, an advisor to Groupon.se.

The service launched two weeks ago in Sweden, and now the executives are focused on launching in the U.K. and the U.S. before the end of the year.

“Gift cards are a $100 billion business in the U.S., and it has not had that many innovations,” Winbladh said. “It went from a piece of paper with manual logs to a piece of plastic that is integrated with the cash register. It’s still a physical product.”

There’s a ton of social-gifting sites experimenting with different models, including Giftiki, Thoughful, Shareagift, Friendfund, Friendgiftr and eBay’s Gifts Project.

Here’s how Wrapp works: Download the app to either an iPhone or Android phone; log in to your Facebook account; click on a friend, who might be celebrating a birthday or anniversary; pick from one of the gift cards available, which can be targeted based on the intended recipient and contribute as much money as you want.

The recipient will receive a message on their Facebook wall, saying that they have received a gift. Other friends will see the message and have the chance to contribute.

The recipient then shows the mobile application at check-out to redeem it.

Windbladh said many of the gift cards will come with $5 already stored on them.

“If I’m cheap, maybe other common friends will add more money, or maybe I will add more money. The average gift card in the U.S. is $20 to $30,” he said.

But he figures, if someone walks into the store, that’s cheaper than most advertising campaigns.

Wrapp is focused on partnering with large big-box retailers, like Best Buy or Target, which have large marketing campaigns, an interest in seeing their brand on Facebook, and absolutely no interest in offering a daily deal on Groupon or one of its competitors.

The business model it is proposing to retailers is that Wrapp doesn’t get paid until someone redeems the gift card. Then if someone uses it, Wrapp collects a commission on both what the retailer’s contributed to the card and what others contributed beyond that.

So far, the company has raised seed funding from Swedish angels, and is looking to raise money in the next three to six months to support the roll-out in the U.S. Today, it has 15 employees, but will be beefing up its presence in San Francisco for its U.S. launch.

BuyWithMe Attempts to Link Daily Deals to Customer Loyalty

Tricia Duryee — Tue, 27 Sep 2011 16:22:43 +0000

One of the biggest unknowns in the daily deals business is figuring out the lifetime value of an offer for a merchant.

Does it bring in new customers? And will they ever come back?

Certainly the giants in the industry, like Groupon and LivingSocial, will have to grapple with these problems, but for now, it appears that the smaller players in the space are being more vocal about how to close the loop.

New York-based BuyWithMe is announcing today that it is rolling out card-linked offers to some of its merchants. By doing so, merchants will have the ability to track the success of a promotion and reward loyal customers who return to their stores after redeeming the initial vouchers.

San Francisco-based Bloomspot also talks about the concept of rewarding consumers who spend more or return to the merchant after the deal is sold.

The card-linked offer space is not new.

It is similar to the way your credit card company offers you discounts on rental cars or hotel rooms. But now many companies are trying to open it up as a third-party ad network, which will be able to create discounts and offers that are tailored for individuals based on their actual spending habits.

In the same way, BuyWithMe hopes to be able to give its merchants access to aggregated information that will allow them to track the success of the promotion.

For instance, BuyWithMe says merchants will now be able to get answers to key questions: Did customers spend more than the value of the voucher at redemption? Did customers return to make repeat purchases? How much did the average customer spend? What is the most popular day of the week to redeem the voucher? And what is the average lifetime value of a customer?

BuyWithMe says the information is gathered in aggregate, so that a consumer’s privacy is not violated. Additionally, consumers will have to opt into the program and will be able to opt out at any time.

Presumably, consumers will be motivated to sign up if they continue to receive offers that they find valuable.

In a statement, BuyWithMe’s CEO Jim Crowley said, “We have long maintained that the success of BuyWithMe is dependent on the satisfaction of our merchant partners. Our commitment is to help them build a better business and establish long-term customer relationships by offering specific data and insight into the success of their customer acquisition and loyalty campaigns.”

The product, which BuyWithMe is calling MerchantConnect, is launching this month in Boston, New York City, Los Angeles and Washington, D.C., and will be rolling out nationally later this fall.

Photo Credit: Images_of_money.

Heading Off Privacy Problems -- Before They Arise

Julia Angwin — Mon, 26 Sep 2011 20:14:24 +0000

When General Electric Co. was getting ready to launch a home energy-monitoring appliance last year, it called in an unusual expert: the company’s chief privacy leader, Nuala O’Connor Kelly.

Ms. Kelly quizzed the product developers on how they planned to use the data collected by the device and advised them on what to write in the appliance’s “energy data privacy policy” for consumers.

Welcome to the new world of corporate privacy.

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The Really Smart Phone

Robert Lee Hotz — Mon, 25 Apr 2011 12:00:51 +0000

Apple and Google may be intensifying privacy concerns by tracking where and when people use their mobile phones–but the true future of consumer surveillance is taking shape inside the cellphones at a weather-stained apartment complex in Cambridge, Mass.

For almost two years, Alex Pentland at the Massachusetts Institute of Technology has tracked 60 families living in campus quarters via sensors and software on their smartphones–recording their movements, relationships, moods, health, calling habits and spending. In this wealth of intimate detail, he is finding patterns of human behavior that could reveal how millions of people interact at home, work and play.

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RIM's BlackBerry PlayBook Tablet Stands A Chance…in 2012

Sarah Rotman Epps and Ted Schadler — Mon, 18 Apr 2011 14:30:18 +0000

Business has changed since the first BlackBerry smartphone hit the enterprise in 2002. Individual workers, rather than CIOs and IT departments, have more influence now: Forrester’s data show that more than half of U.S. employees say they have better technology at home than at work, and 37 percent of U.S. information workers bring technology to the workplace that they use first at home. When it comes to tablets especially, there’s little distinction today between the enterprise and consumer market.

Here lies the challenge of Research In Motion (RIM), maker of BlackBerry smartphones and now, the PlayBook tablet: To conquer the enterprise–which has historically been RIM’s stronghold because of its White House-level security and lack of competition–it needs to sell tablets to consumers.

This isn’t impossible. Apple has had remarkable success selling the iPad to consumers and businesses. In a Forrester survey of U.S. consumers conducted in January 2011, 34 percent of iPad owners reported using their device at work. With enhanced security and dedicated support (“business specialists” at Apple Stores), we’ll see more companies join Mercedes-Benz and GE in buying iPads directly for their employees. But Apple’s success has come precisely because it puts consumers first. A typical statement we hear from executives at firms considering buying tablets is, “We’d really like a tablet that integrates better with our back-end systems, but we’re going with iPads because we want employees to like them.” Businesses care about how workers feel about technology.

Contrary to popular belief, RIM is pretty successful selling its devices to consumers, too. BlackBerry smartphone shipments, subscribers, and revenues continue to rise quarter after quarter, even in mature North American markets. Most important, BlackBerry consumer customers (“BlackBerry Internet Service,” or BIS) now outnumber BlackBerry enterprise customers (“BlackBerry Enterprise Service,” or BES).

But the PlayBook is a complicated product to sell to consumers. For starters, the “BlackBerry Bridge” feature, which displays email and BlackBerry messenger content only when in Bluetooth-range of a BlackBerry smartphone, has security appeal for CIOs but is potentially confusing to consumers. Yes, you can still get Web-based email like Gmail on the device, but there’s no native email application like there is on the iPad—and email is the No. 1 activity consumers do on tablets today. Second, compared with the iPad the PlayBook has relatively few native apps designed for the platform; it supports Android apps but only those designed for Gingerbread, not Honeycomb (not that there are many of those, either). Apps don’t matter to all tablet shoppers, but they do matter to some: 23 percent of consumers considering buying a tablet rank “Number of available apps” in their top-three criteria; 19 percent say the same about Flash support, which the PlayBook browser will have.

Whereas Apple owns its own channel–the Apple Store–to educate and sell the iPad to consumers, RIM will be relying on the Blue Shirts at Best Buy to sell its device, as well as its carrier partners and other local retailers (20,000 stores worldwide). It’s going to be a tough sell. While the PlayBook has dazzling performance and multitasking—for example, the ability to switch apps and keep a video or game running in the background—and solid hardware design, consumers will be comparing a first-generation PlayBook with a second-generation iPad. iPad will dominate tablet sales in 2011. But this is a marathon, not a sprint, and we see a path for RIM to gain market share in 2012. An improved version-two PlayBook must have native email, built-in security and more native apps for QNX, the RIM’s recently-acquired operating system for the PlayBook. To get there, RIM will need to port QNX to its smartphones to expand the platform’s reach and make it more appealing for developers.

Even so, the PlayBook’s appeal is likely limited to BlackBerry smartphone customers, and to win them over, RIM’s marketing execution needs to be flawless. With the recent departure of CMO Keith Pardy, RIM’s new leadership needs to step up and define and execute a vision for this product that puts consumers on par if not ahead of CIOs. Without that vision, RIM will have an expensive product failure on its hands.

Ted Schadler is a vice president and principal analyst and Sarah Rotman Epps is a senior analyst at Forrester Research.

HTC's Net Profit Nearly Triples

Lorraine Luk — Fri, 08 Apr 2011 16:45:40 +0000

HTC Corp. said Friday its first-quarter net profit nearly tripled, driven by strong growth in handset shipments.

HTC’s strong results reflect rising demand for smartphones as consumers continue to switch from traditional cellphones to gadgets that allow them to browse the Internet, write emails and watch videos.

The Taiwan-based smartphone maker, which is best known for making phones using Google Inc.’s operating system, has been growing at a rapid clip and is neck-and neck with Nokia Corp. in terms of market capitalization.

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Flash Sales Site Focused on Indian Fashion Expands to Travel

Tricia Duryee — Thu, 07 Apr 2011 17:01:14 +0000

Exclusively.In, a flash sales site focused on importing Indian jewelry and apparel to U.S. consumers, has launched a travel vertical that focuses on sending those consumers abroad.

Exclusively.In, which launched in June and raised $2.8 million from investors such as Accel Partners, has launched Palaces to Paradise, a companion site to its retail site that will offer discounts on travel packages to Asia.

Travel has been an obvious niche vertical that other flash sales and daily deal sites have readily expanded into.

Gilt Groupe launched Jetsetter in September 2009, and already has two million people signed up to receive its deals by email. About two-thirds of the membership overlaps with the other Gilt sites. Other daily deals sites have expanded into travel, including LivingSocial’s Escapes and Overstock.com.

Just like its apparel site, Exclusively.In is focused on offering travel experiences from Asia. The four travel deals that are live on the site starting today are: A boutique hotel in Udaipur, Rajasthan; a jungle lodge located in Kanha National Park in India; a beachside resort in India; and a villa located in Koh Samui, Thailand.

As an example, the five-bedroom villa in Thailand, which sleeps 10 and includes a full-time Thai chef, normally costs $1,290 a night but has been marked down to $1,095. The deal will be available until May 31.

Trying to Define the Opportunity for Commerce on Facebook

Tricia Duryee — Sat, 19 Mar 2011 02:50:10 +0000

Earlier this week, we wrote about how Payvment had launched a Facebook Mall, where consumers can shop among 50,000 retailers and add items to a single shopping cart.

The day the mall went live, Payvment said its customers’ sales quadrupled, compared to sales when they were limited to a shopping tab on their individual fan pages.

Now, Payvment’s competitor, Adgregate Markets, which also helps brands build storefronts on Facebook, is releasing data that helps define the size of the opportunity for e-commerce on Facebook.

In a study commissioned by Adgregate and conducted with the help of Webtrends, Adgregate looked at the impact of Facebook fan pages on traditional e-commerce sites.

To be sure, the idea of social commerce is so new, it’s difficult to give too much weight to early studies like these, but because everything on the topic is unknown, it’s worth taking the data into consideration.

Generally, what Adgregate found was that Facebook was generating a ton of visits to brands’ Facebook pages, providing an opportunity to convert the traffic into sales, especially as brands see visits to their traditional web sites shrink.

The study highlighted one example. Delta Airlines recently enabled customers to book tickets directly on its Facebook page. While traffic to Delta’s site lost more than a million unique visitors over a three month period, its Facebook page gained more than a 1,000 new fans.

The study analyzed the unique visits to the websites of the Fortune 100 as well as their Facebook fan pages.

From Adgregate’s customer base, the study makes a number of conclusions:

• Following the launch of a Facebook store, wall posts generate on average 1,673 percent spikes in store traffic.

• Facebook stores on average generate a 17 percent social engagement rate (merchandise “likes” and “shares” per visitor).

• Facebook stores generated on average 5.9 pages views per visit.

• Facebook commerce conversion rates range from 2 to 4 percent, which is on par with e-Commerce websites.

• Average order value of $104 with 24 percent growth month-over-month (although this largely is dependent upon retail vertical).

Another Sign that Videogame Sales are Going Digital: Prepaid Cards

Tricia Duryee — Fri, 11 Mar 2011 01:45:12 +0000

How big is online or digital gaming becoming?

One indicator is the sales of prepaid gaming cards that are purchased at Walmart, Target, 7-11 and many other retailers.

While the game cards are typically purchased in person, they can be used for a range of things, from buying virtual goods within FarmVille to buying a game that’s digitally delivered over the internet via Xbox Live.

Today, NPD released industry sales figures for February today, reporting that prepaid game cards now account for 22 percent of all accessories sold and that sales have increased 52 percent compared to a year-ago.

Meanwhile, in the same time period console software sales only increased by 2 percent.

NPD’s Analyst Anita Frazier said the jump in game card sales points to the increased importance of digitally distributed content sales within the games industry, and that last month marked the best February on record for accessory sales.

The top-selling item was the Xbox 360 1,600 points card.

Overall, NPD reported that physical retail channel in the U.S. generated video game hardware sales in February of $467 million, increasing 10 percent. Video game software, including console and portable totaled $601.4 million, dropping 5 percent, and video game accessories totaled $257 million, increasing 22 percent.

Clovr Raises More Cash for New Ad Units That Link Coupons to Credit Cards

Tricia Duryee — Thu, 10 Mar 2011 22:26:08 +0000

Clovr Media has raised $8.3 million in a second round of funding as it sets out to build a new type of loyalty program that links a user’s credit card to a coupon displayed in a banner ad.

The idea piggy-backs on other loyalty programs already in the market, such as those of credit card companies that offer discounts when customers visit certain hotels or rental car companies.

But with Clovr’s platform, advertisers and brands can enable consumers to associate coupons directly with a credit card.

For instance, a banner ad could offer a 10 percent discount to an electronics store. Instead of printing out a coupon, the user can opt to link the deal to a credit card. The discount is activated only if the consumer uses that credit card at the register.

Since coming out of stealth mode late last year, Clovr has been fine-tuning its approach to the market.

Initially, it envisioned working directly with banks to make the service available to customers. But since advertisers want a large audience to target, the company’s co-founder and CEO Tom Burgess said today, the company realized it had to make the platform more widely available.

To that end, it partnered with credit card processing companies to enable 99 percent of debit or credit card holders in the country to participate in the offers. Burgess said that Clovr is now entering beta and that its first offers will start appearing in May when it is commercially available.

Clovr is part of a new market that is leveraging old technology called Card Linked Offers, or CLOs for short.

Coincidentally, one of Clovr’s biggest competitors is also being backed by someone Burgess knows all too well.

Yesterday, Clovr’s close competitor, Offermatic, announced it had raised $4.5 million in a first round of funding. Investors include Kleiner Perkins Caufield & Byers, Ron Conway and Omar Hamoui.

Hamoui was the founder of AdMob, the mobile advertising company purchased by Google for $750 million in 2009. And Burgess was the founder of Third Screen Media, a mobile ad network that was acquired by AOL in 2007.

Today, Offermatic is Burgess’ West Coast competitor, much like AdMob was his West Coast competitor when both he and Hamoui were executives in the mobile advertising space.

A third company competing in the space is Atlanta-based Cardlytics.

Burgess said there’s one main difference between Clovr and Offermatic. Clovr is a platform that any ad network can use. It does not have a sales team and is not offering deals directly to consumers.

Offermatic launched its beta in December, and sends discounts to consumers based on their spending history. Similarly, it links a consumer’s credit and debit cards to its system so that people receive the discount automatically.

To be sure, all three companies are trying to solve the problem of low redemption rates of physical coupons or vouchers.

Clovr’s second round of funding was led by Bain Capital Ventures. Clovr Media seed investors Kepha Partners and Common Angels also participated. In total, the company has raised nearly $10 million.

Adobe's Omniture Group Unveils Tools to Track a Brand's Buzz on Social Media

Tricia Duryee — Wed, 09 Mar 2011 13:00:25 +0000

While companies often feel the pressure to have a presence on Facebook, Twitter, YouTube, mobile and other platforms, it’s hard to quantify why.

To that end, Adobe is unveiling new features today that will enable marketers to monitor, measure and monetize platforms, where consumers are having conversations about their products and brands.

As an example, Aseem Chandra, VP of Marketing for Adobe’s Omniture Business Unit, said the product will be able to alert a company to a spike in traffic on Twitter, and track down the original source.

What they might find out is that Justin Bieber, who has nearly eight million followers, tweeted about his favorite jeans, which was read and spread by thousands of others on Twitter or Facebook.

With that information, the tools could then enable a brand to make decisions on future celebrity partnerships, or more likely, on what keywords to buy on Google.

Chandra said one reason it has gotten so difficult to see where the traffic is originating from is that a ton of activity is also coming from mobile devices, including the proliferation of tablets. “How do you measure that, and where does it originate from? You want to be able to correlate those two and encourage the behavior,” he said.

The new SocialAnalytics features, which are apart of Adobe’s Online Marketing Suite, is expected to be unveiled this morning at Adobe’s Omniture Summit in Salt Lake City. The tools track more than 40 different social networks and gather positive, neutral or negative sentiments. A beta was introduced last year, and since then 75 customers have been using the platform. The product will be available more widely in the third quarter.

Chandra said the past year has shown them how important social media is to media, entertainment and e-commerce companies.

“Everything we do as consumers and professionals is informed by social. That’s going to stay regardless. The conversation we are having with CMOs is that they see that, and are asking us how do I make the important decisions around their business, marketing programs and campaigns? …There’s a lot of activity and it’s well deserved.”