Mobile Apps Happening But In a Rotary Dial Way

An art lover can walk into the Art & Frame of New York on the Upper East Side this December, decide that she needs a custom frame and then use a 20 percent off coupon using her cellphone.

She doesn't go the low-tech route and hand the merchant a printed coupon. This holiday shopper also opts to not go high-tech, deciding to neither beam the coupon to the store's POS nor to have the coupon's value added to her store account. She opts for the sneakernet version of mobile commerce: she shows the cashier her phone's screen, which depicts the coupon. The cashier enters the unique number on the coupon and, voila, a discount is framed.

This mobile money magic comes courtesy of a tiny startup called 8coupons.com. Like many mobile commerce apps this holiday season, they leverage one high-tech attribute of a smartphone and then wrap up the transaction however it can.

What makes smartphones so attractive to retailers is the telephone-book-length of the number of its attributes that can be used. Consider:
  • It can talk, with a speaker and the ability to create a wide range of sounds. The ability to carry 1,000 ringtones means the device can also communicate words and other sounds. Example: At the ultimate line buster at a McDonalds in South Korea, consumers have to download a McDonalds applet onto their phone to place an order while they sit at a table. When the order is ready, their phone rings.
  • It can see, with a digital camera that can also create videos. Example: A Japanese chain called Amusement Café Maids plays interactive games with customers. To get clues to win, they use their phone's camera to access digitally watermarked images printed on drink coasters. Another examples use 2D barcodes in digital signage or a plain poster. In either case, when the camera scans the barcode, it launches the smartphone's browser, which connects it to a very deeplink within a Web site, which displays information.
  • It can hear, with a microphone, to have 2-way voice or audio communications.
  • It can write, either through quick text messages or through detailed E-mails with attachments.
  • It can display pictures, movies or documents, slides and spreadsheets.
  • It's a working computer, which means it can have an embedded RFID chip and become a smart credit card. It has a CPU and memory, which means it can network many of the above capabilities together.
  • It has several viable unique identifiers, including its phone number and the number of the device.
  • It can access satellite communications, for a wide range of geographical potential. Example: Some franchisees of the Subway sandwich chain are trying to use the location information from cellphones to send coupon alerts to current customers when they approach a Subway they've never used.

    And yet, despite all of this potential, retailers in the U.S. are using only the smallest portion of those capabilities. Generally, just like 8coupons.com, it's marrying one of those high-tech attributes with a very low-tech workaround.

    Landy Ung, the co-founder of 8coupons.com, said she sees the U.S. as being so far behind the rest of the world because, ironically, we were so far ahead for years. The strength of U.S. telecom allowed the U.S. market to stay with landlines far longer than anyone else. Much of Asia "skipped that whole landline infrastructure and went straight to mobile. It's now been there forever," she said, giving them a huge advantage in terms of both retail comfort with the technology and working out the bugs.

    But there are also lots of corporate political issues at play as well. In much of Europe and Asia, the government plays a major role and wireless carriers are not nearly as powerful as they are in the U.S.

    The U.S. cellphone systems are "all so fragmented. Take Verizon Wireless. Their system in the South is different than their system in the North."

    Another good example is a mobile commerce rollout by bookstore chain Barnes & Noble. This holiday season, their customers will be able to review books and related products—"between one and two million SKUs," said a B&N manager--on their Blackberry handhelds.

    "We show the cover image, price and availability and basic product description," said Miles Williams, the book chain's director of online partnerships. But the service is limited to Blackberry users and doesn't much exploration beyond the basics. The Web site and the stores are designed for browsing and finding what might be interesting, he said. The mobile experience is pretty much limited to customers "that know what they want."

    The initial version—created by a mobile commerce company called Digby—is much more pushing content out than in providing an interactive experience, either for the user or for the retailer's IT staff. "Digby has zero integration with our stores at this point," Williams said, adding that inventory lookups, more sophisticated loyalty data and geography awareness are on his future wishlists.
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