The Mobile Choices At Macy's, Best Buy

Macy's and Best Buy this summer will launch programs that let the retailers interact with customers while they are using their mobile phones. Both programs will leverage consumers' GPS-revealed exact location and the barcode-scanning capabilities of their phones. But which of several approaches each chain will use has yet to be determined, according to the CEO of the vendor (Shopkick) providing the software.

Setting aside the fact that it's highly unlikely either huge chain will deploy this summer when a plan hadn't been finalized by early June—given the IT work and associate training involved—the options the retailers are considering show the range of mobile decisions that need to be made.

Consumers must first download the software onto their smartphones. Once the app is launched, GPS geolocation can begin. It can communicate whether a consumer is at a Macy's or a Best Buy at that moment and, if so, which one. GPS would likely be unable to pinpoint anything more specific, so detectors in the store would need take over to determine, for example, what department and aisle the consumer is in and possibly even which products he/she is standing in front of.

Either way, the software identifies the customer and alerts the store. But on what basis are offers made? Are they self-selected, where the consumer browses through a lengthy list of offers? Or perhaps the consumer selects options when the software is first downloaded and those choices dictate all offers?

The store could integrate this selection with customers' purchase history, assuming consumers associate their apps with their loyalty cards. Those histories could drive the offer choice. Or the demographics the customer fills in (age, income, gender, education level, marital status, etc.) could drive those offer selections.

Both Macy's and Best Buy have already decided to limit this summer's trial to data customers volunteer in the application, with CRM history and demographic recommendations being considered for the future, said Shopkick CEO Cyriac Roeding.

The application will then allow customers to select offers and redeem them. But, again, both chains have lots of options for how that happens. The phone could be shown at the POS to a store associate, who manually keys in the digits presented. Or the phone could display a barcode, which is scanned at checkout directly from the phone's screen. An even easier route for the consumer would be integrating the system with the store network. (Note: The easier it is for consumers, the harder it is for IT. Such is life.)

Such integration might work by having the offer/reward selection saved into a customer's CRM account. Then when that customer uses his/her loyalty card, the POS automatically shows the offer to the associate and it can be applied instantly, assuming the customer purchases the incentivized items.

That last option, although the hardest for IT to integrate (especially for a technology that is on trial), may prove to be the most secure. As Target and Starbucks discovered last month, having a cashier trust that an image displayed on a consumer-controlled (and owned) smartphone is dangerous.

What's to prevent a cyberthief from making a bogus image that offers a 98 percent discount on a $5,000 item? Limiting the phone to handling customer input keeps all of the tender side of the equation on the other side of the firewall. By limiting the phone in this way, it sidesteps much of the mobile data risk and simultaneously makes it easier for the consumer to use.