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Version 1.0.0
2010/05/21
A Joint White Paper sponsored by the
National Retail Federation
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Mobile Retailing Blueprint
This blueprint is the culmination of research by retailers, vendors, and standards organizations,
working together for the benefit of the retail industry. It would not have been possible without
the assistance of the following people:
Chairs
Richard Mader, Chairperson ARTS
Jonatan Evald Buus, Vice Chair Cellpoint Mobile
David Dorf, Vice Chair Oracle Retail
Cathy Medich, Vice Chair Smart Card Alliance
Administration
Richard Halter ARTS
Bart McGlothin Cisco Systems Inc
Contributors
Andrew Paradise Aisle Buyer
Jay Heavilon ARS eCommerce
James Schildknecht CellPoint Mobile
Kristian Gjerding CellPoint Mobile
Nuria Gema Fernandez Fernandez El Corte Ingles
Juan Jose Monge Fernandez El Corte Ingles
Francisca Vicente-Tamarin El Corte Ingles
Miguel Ligero El Corte Ingles
Paul Gay Epson
Mike Julson Escalate Retail
Brian Walker Forrester
Wendy Neuberger IBM
Sophie Vu Kony Solutions
Dana Warsona Motorola
George Throckmorton NACHA
Debbie Arnold NFC Forum
Dennis Stokely Safeway
Tim Hood SAP
Arish Ali Skava
Renee Schaffer Sonic Corp
Mickey Haynes The Home Depot
Rine le Comte To Increase
Dennis Blankenship Verizon Business
David Tran Verizon Business
Asif Batada Verizon Business
Mohammad Khan ViVOtech
Tom Zalewski ViVOtech
Participants
Ed Johnson BJ Warehouse
John O’Dell Darden
Will Anguish Darden
Tom Reichert Family Dollar
Al Garton GS1
Rich Richardson GS1
Ed Gawronski Kohls
Nada Aried Limited Brands
Steve Miles Massachusetts Institute of Technology
Krystal Kolodziejak sasktellabs
Bill Klearman Sonic Corp.
Gaurav Pant TCS
George Shaughnessy Yum! Brands
Rajat Agarwal Wincor-Nixdorf
Pete Kinkead West Marine
Copyright © National Retail Federation 2010. All rights reserved.
This document and translations of it may be copied and furnished to others, and derivative works
that comment on or otherwise explain it or assist in its implementation may be prepared, copied,
published, and distributed, in whole or in part, without restriction of any kind, provided that the
above copyright notice and this paragraph are included on all such copies and derivative works.
However, this document itself may not be modified in any way, such as by removing the
copyright notice or references to the NRF, ARTS, or its committees, except as needed for the
purpose of developing ARTS standards using procedures approved by the NRF, or as required to
translate the document into languages other than English.
The limited permissions granted above are perpetual and will not be revoked by the National
Retail Federation or its successors or assigns.
This blueprint was developed with assistance from the following organizations:
CONTENTS
1. EXECUTIVE SUMMARY ................................................................................................................................ 1
1.1 CONSUMER OPPORTUNITIES ............................................................................................................................. 1
1.2 OPPORTUNITIES WITHIN THE RETAIL ESTABLISHMENT ................................................................................... 3
1.3 HOW THIS DOCUMENT CAN HELP.................................................................................................................... 3
2. INTRODUCTION .............................................................................................................................................. 5
2.1 WHAT IS MOBILE RETAILING? ......................................................................................................................... 5
2.2 MOBILE DEVICES DEFINED .............................................................................................................................. 6
2.3 MOBILE APPLICATION TECHNOLOGY ............................................................................................................... 8
2.3.1 Browser-Based Applications.................................................................................................................. 8
2.3.2 Message-Based Applications ................................................................................................................. 9
2.3.3 Downloaded and Native Applications ................................................................................................. 10
2.3.4 Thin-Client Architecture ...................................................................................................................... 10
2.4 MOBILE RETAIL AND SOCIAL MEDIA ............................................................................................................. 11
2.5 MOBILE RETAIL APPLICATION CATEGORIES .................................................................................................. 12
2.5.1 Mobile Marketing Applications ........................................................................................................... 13
2.5.2 Mobile Commerce Applications........................................................................................................... 13
2.5.3 Mobile Operations Applications .......................................................................................................... 13
2.5.4 Mobile Application Providers .............................................................................................................. 13
2.5.5 Day-in-the-Life Examples .................................................................................................................... 14
2.5.6 Mobile Market Statistics ...................................................................................................................... 15
2.5.7 Mobile Retailing Ecosystem................................................................................................................. 20
3. MOBILE MARKETING ................................................................................................................................. 22
3.1 ADVERTISING AND MARKETING..................................................................................................................... 22
3.1.1 Brand Marketing .................................................................................................................................. 22
3.1.2 Digital Signage .................................................................................................................................... 22
3.1.3 Augmented Reality ............................................................................................................................... 23
3.1.4 Example Applications .......................................................................................................................... 23
3.1.5 Technology and Standards Employed .................................................................................................. 24
3.1.6 Benefits and ROI .................................................................................................................................. 25
3.1.7 Implementation Considerations ........................................................................................................... 25
3.2 CUSTOMER SERVICE ...................................................................................................................................... 26
3.2.1 Store Locations/Hours ......................................................................................................................... 27
3.2.2 Example Applications .......................................................................................................................... 28
3.2.3 Wish Lists, Shopping Lists, Gift Registries .......................................................................................... 30
3.3 SHOPPING TOOLS ........................................................................................................................................... 35
3.3.1 Case Studies ......................................................................................................................................... 36
3.3.2 Technology and Standards Employed .................................................................................................. 36
3.3.3 Benefits and ROI .................................................................................................................................. 37
3.3.4 Implementation Considerations ........................................................................................................... 37
3.4 PRODUCT INFORMATION ................................................................................................................................ 38
3.4.1 Transaction Process ............................................................................................................................ 39
3.4.2 Product Information from Friends....................................................................................................... 41
3.4.3 Transaction Process ............................................................................................................................ 41
3.4.4 Product Comparisons .......................................................................................................................... 42
3.4.5 Transaction Process ............................................................................................................................ 42
3.4.6 Case Studies ......................................................................................................................................... 43
3.4.7 Technology and Standards Employed .................................................................................................. 44
3.4.8 Benefits and ROI .................................................................................................................................. 44
3.4.9 Implementation Considerations ........................................................................................................... 44
3.5 LOYALTY PROGRAMS .................................................................................................................................... 45
3.5.1 Transaction Process ............................................................................................................................ 46
Copyright © 2010 National Retail Federation. Page vi
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Mobile Retailing Blueprint
Figures
FIGURE 1: AVAILABLE RETAIL CHANNELS ..................................................................................................................... 2
FIGURE 2: MOBILE RETAILING CLASSIFICATIONS .......................................................................................................... 3
FIGURE 3: THE RETAIL STORE OF THE FUTURE .............................................................................................................. 6
FIGURE 4: U.S. DEVICE TYPE AND OPERATING SYSTEM MIXES ..................................................................................... 7
FIGURE 5: TWO AMERICAN AIRLINES WEB SITES: NON-MOBILE (LEFT) AND OPTIMIZED FOR MOBILE (RIGHT) ........... 9
FIGURE 6: THIN CLIENT ARCHITECTURE ...................................................................................................................... 11
FIGURE 7: WORLDWIDE SMARTPHONE MARKET SHARE .............................................................................................. 16
FIGURE 8: MARKET SHARES OF SMARTPHONE OPERATING SYSTEMS WORLDWIDE AND IN NORTH AMERICA ............. 17
FIGURE 9: RETAILER INTEREST IN DIFFERENT M-COMMERCE CAPABILITIES ................................................................ 18
FIGURE 10: GARTNER APRIL 2009 PROJECTIONS OF MOBILE PAYMENT TECHNOLOGIES ............................................. 20
FIGURE 11: MOBILE RETAILING ECOSYSTEM ............................................................................................................... 21
FIGURE 12: 2-D BAR CODE ON A BILLBOARD .............................................................................................................. 23
FIGURE 14: PROCESS FLOW FOR A DEVICE WITH GEOLOCATION OR GPS CAPABILITIES .............................................. 28
FIGURE 15: WISH LISTS, SHOPPING LISTS, GIFT REGISTRIES ....................................................................................... 31
FIGURE 16: LIST CREATION TRANSACTION PROCESS ................................................................................................... 31
FIGURE 17: LIST CONSUMPTION TRANSACTION PROCESS ............................................................................................ 32
FIGURE 19: REVIEW PRODUCT INFORMATION AT E-COMMERCE SITE TRANSACTION PROCESS .................................... 39
FIGURE 20: REVIEW PRODUCT INFORMATION WITH RETAILER’S APPLICATION TRANSACTION PROCESS..................... 40
FIGURE 21: RETRIEVE ITEM INFORMATION FROM A PICTURE TRANSACTION PROCESS ................................................ 40
FIGURE 22: READ FRIEND'S RATINGS TRANSACTION PROCESS .................................................................................... 41
FIGURE 23: POST TO MY FRIEND'S SITE TRANSACTION PROCESS ................................................................................. 42
FIGURE 24: PRODUCT COMPARISON TRANSACTION PROCESS ...................................................................................... 42
FIGURE 25: EXAMPLE LOYALTY PROGRAM PROCESS FLOW ........................................................................................ 47
FIGURE 26: MOTOROLA MOBILE LOYALTY SYSTEM ................................................................................................... 48
FIGURE 27: NFC CHIP OPTIONS ................................................................................................................................... 54
FIGURE 28: BEST-PRACTICE MOBILE WEB HIGH-LEVEL ARCHITECTURE .................................................................... 60
FIGURE 29: TYPICAL MOBILE WEB HIGH-LEVEL ARCHITECTURE................................................................................ 61
FIGURE 30: MOBILE APPLICATIONS HIGH-LEVEL ARCHITECTURE ............................................................................... 64
FIGURE 31: PURCHASING A DSB TICKET BY USING AN IPHONE APPLICATION ............................................................ 65
FIGURE 32: SIMPLIFIED ARCHITECTURE FOR DSB TICKETING APPLICATION ............................................................... 66
FIGURE 33: MOBILE REMOTE AND MOBILE CONTACTLESS PAYMENTS ........................................................................ 77
FIGURE 34: CURRENT MOBILE PAYMENT OPPORTUNITIES ........................................................................................... 78
FIGURE 35: MOBILE REMOTE PAYMENT STORED VALUE PAYMENT FLOW .................................................................. 80
FIGURE 36: SMS TRANSACTION PROCESS .................................................................................................................... 84
FIGURE 37: INTEGRATION OF MOBILE APPLICATIONS USING DIFFERENT SUBCHANNELS WITH THE RETAILER'S BACK
OFFICE ..................................................................................................................................................... 88
FIGURE 38: MOBILE INFRASTRUCTURE THAT HANDLES ESB OPERATIONS .................................................................. 89
FIGURE 39: MOBILE INFRASTRUCTURE MANAGING MNO CONNECTIVITY .................................................................. 90
FIGURE 40: MOBILE PHONE WITH WALLET SOFTWARE ............................................................................................... 92
FIGURE 41: EXAMPLE OF NFC-ENABLED MOBILE PHONE PROVISIONED WITH WALLET AND SECURE ELEMENT ........ 94
FIGURE 42: NFC PHONE WALLET USED IN BART/JACK IN THE BOX PILOT PROGRAM ............................................... 95
FIGURE 43: MOBILE CONTACTLESS TRANSACTIONS: PROVISIONING AND PURCHASE .................................................. 96
1. EXECUTIVE SUMMARY
Mobile phones have come a long way since their introduction over 30 years ago. Phones
are smaller, weigh less, and do more, carrying data as well as voice. Phones not only
make telephone calls, they send e-mail and text messages, take and send photographs,
play games, and access and browse the Internet. And mobile phones are everywhere. By
the end of 2009, mobile cellular subscriptions worldwide numbered approximately 4.6
billion. 1 Neither age, nationality, nor economic status represents a barrier to owning and
using a mobile phone. The first phones may have been novelties, but mobile phones now
are a necessity, especially for the under-35 demographic.
Mobile phones are changing the way retailers conduct business. Because they are always
with us—and always on—they connect retailers to current and potential customers
regardless of location or time of day. In 2015, shoppers around the world are expected to
use their mobile phones to purchase goods and services worth close to $120 billion. That
amount represents about 8 percent of the total e-commerce market. 2 In addition, payment
for goods or services and money transfers initiated from a mobile phone will reach almost
$630 billion by 2014, up from $170 billion this year. 3 There is no doubt that mobile
technology for retail is a hot topic worldwide.
1
Richard Heeks, "ICT4D 2.0: The Next Phase of Applying ICT for International Development," IEEE
Computer 41 (6): 26–33. doi:10.1109/MC.2008.192
2
http://www.abiresearch.com/press/1605-Shopping+by+Mobile+Will+Grow+to+%24119+Billion+in+2015
3
Juniper Research, "Mobile Payments Markets: Strategies & Forecasts 2010-2014.”
Copyright © 2010 National Retail Federation. Page 1
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preserved.
Mobile Retailing Blueprint
Cross Channel
Franchise
Catalog
Mail order
Call center
e-commerce
Web Affiliates
Social commerce
Native applications
Mobile Mobile Web sites
NFC hardware
Mobile Retailing
Consumer Employee
2. INTRODUCTION
Shelf Edge
RFID Gondola
Displays XBOX 360
Labels
$399
Bottom of Basket
Detection
Holographics
In-store
kiosks
Electronic
Menu Boards
Bluetooth Interactive Self Serve
Wireless POS Cashless Biometric
Customer Contactless Readers
Peripheral Scales Displays Payments
Feature Significance
Bluetooth wireless Used to connect mobile phones to other devices (such as a headset)
connectivity without a cable. Bluetooth allows shoppers to be “hands-free.”
Still or video camera Useful for taking pictures of products, receipts, and bar codes.
Compass Useful for directing a person to a store, or for recognizing in which direction
a person is facing. This feature is currently available only on the newest
mobile devices.
Interactive display A larger display than that available on a traditional mobile phone that
includes the ability to run a browser. Some phones include touch screens
or screen-addressable keys.
Internet access To be useful, a mobile device must be connected to the Internet either
though the cellular network or Wi-Fi.
Location recognition The ability to determine location using GPS satellites, cell tower
triangulation, or Wi-Fi reference.
Feature Significance
Multimedia Messaging A message service, useful for sending and receiving rich content, such as
Service (MMS) pictures or audio.
Short Message Service A message service, useful for sending text. Most mobile phones can use
(SMS) SMS to send and receive short text messages. Certain mobile devices,
however, such as the iPod Touch or iPad, cannot communicate using
SMS.
Figure 5: Two American Airlines Web Sites: Non-Mobile (left) and Optimized for
Mobile (right)
Support for two important technologies, HTML5 and WebKit, is currently emerging in
mobile browsers. These technologies allow retailers to create mobile shopping sites that
take full advantage of smartphone capabilities without being tied to a specific mobile OS.
Mobile Web site developers will be able to provide a rich, “application-like” user
experience on mobile Web sites. The technology is currently available in the Apple
iPhone OS, Google Android OS, and Palm WebOS devices, as well as in new RIM
BlackBerry devices and other smartphones.
2.3.2 Message-Based Applications
The second type of application, the message-based application, uses Short Message
Service (SMS) or Multimedia Messaging Service (MMS) to exchange messages with the
user. While not nearly as easy to use as the other types of applications, message-based
applications work on the largest number of mobile phones. It is often more cumbersome
to have to start the browser on the phone and then access a URL than to send a simple
text message. Almost all mobile phones throughout the world support SMS for short
messages. Services like TextBuyIt, used by Amazon, can interact with consumers, who
can find and order products over the mobile phone.
online social media imprint, providing many retailers with a customer following that they
can begin to engage with mobile promotions and incentives.
Customers can opt into a retailer’s social media mobile rewards program directly,
through the on-line social media environment, through their mobile phones in a retailer’s
mobile Web environment, or by texting a unique keyword to a particular short code. The
objective is to present relevant messages that encourage customers to sign up for a
retailer’s mobile rewards club or program. For example, a prominently placed window
(mobile prompt) embedded on a retailer’s Facebook fan page could include a request to
join the retailer’s Mobile Rewards Club. Customers would not have to move to a new
mobile page but could enter core information, along with their mobile number, directly
into the window. Customers would then send the information and potentially receive in
return an immediate incentive, such as a mobile coupon or a link to multiple offers on the
retailer’s mobile Web page. A similar approach could use a retailer’s Twitter feed;
however, because not all customers have unlimited data plans, retailers might instead
embed a static link or banner prompting customers to opt into the program by sending a
unique alias to a dedicated short code. Both approaches should reward the customer with
an immediate incentive.
Retailers should integrate their social media mobile strategy with their customer
relationship management (CRM) database, to profile customers more accurately based on
interests and behaviors, and to help manage future two-way communication. Customers
are interacting in a number of socially focused channels. Retailers will be able to
understand better which on-line communities and social networks customers are
frequenting and through which they are choosing to engage with the mobile offering.
This approach to a social media mobile strategy will enable retailers to extend their
current CRM efforts, adding the ability to leverage their community building activities
using the social web and automate the conversation process. A retailer can then craft
appropriate messages through the different communication channels.
Both social media and mobile have unique communications attributes. Retailers must be
aware of these attributes to give customers consistent and coordinated information.
Retailers need a single view of each customer to maximize the results of a campaign.
Retailers who treat social media and mobile as separate and independent channels, as
opposed to coordinated channels, will fail to achieve respectable response rates and
weaken their customer relationships rather than building customer communities.
By recognizing these best practices, retailers will be better positioned to improve the
customer experience, providing a new touch point for customer acquisition and
strengthening loyalty building programs through mobile devices.
4
Association for Retail Technology Standards, SOA Blueprint for Retail, version 1.2, http://www.nrf-arts.org
5
Association for Retail Technology Standards, Cloud Computing for Retail White Paper, http://www.nrf-
arts.org
Copyright © 2010 National Retail Federation. Page 14
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preserved.
Mobile Retailing Blueprint
7
Share of 2009 smartphone shipments by operating system, by Canalys; North American smartphone
market share (2009 shipments, 2010 forecast), Canalys (http://www.fiercewireless.com/press-
releases/north-american-smart-phone-shipments-exceed-65-million-units-2010)
8
Joe Skorupa, Shopping Mall in Hand, RIS News, March 2010.
9
"Insight Research Says Financial Applications on Cell Phones to Attract 2.2 Billion Users," eNewsChannels,
April 22, 2009, http://enewschannels.com/2009/04/22/enc6821_192943.php
10
“Mobile ACH Payments: Request for Comment,” NACHA, September 9, 2009
11
Money in Mobile —European Transactions, Frost & Sullivan, October 14, 2009.
Copyright © 2010 National Retail Federation. Page 18
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preserved.
Mobile Retailing Blueprint
• Research and Markets (Dublin) predicts that "Global mobile payment transactions
are expected to reach $110.1 billion in 2013, at a 105 percent compound annual
growth rate." 13
• Gartner reports that worldwide adoption of mobile payments in 2009 grew by 70
percent, to 73 million people. Gartner forecasts that 190 million people will adopt
mobile payments worldwide by 2013 and estimates that 3 percent of the U.S.
population will be using mobile payments by 2012. 14
Analysts are also forecasting rapid adoption of NFC-based mobile contactless payments.
While adoption of such payments has centered in Asia and Europe, analysts predict
global growth as NFC-enabled phones are launched worldwide.
• According to Juniper Research, 15 one in every six mobile subscribers globally
will have an NFC-enabled device by 2014.
• Juniper Research is forecasting that the global gross value of NFC transactions
will exceed $110 billion by 2014. Of this total, global NFC-based mobile
payment transaction values are forecast to exceed $30 billion by 2012. 16
• Juniper Research predicts that 123 million NFC-enabled handsets, equivalent to
46 percent of today’s U.S. wireless subscribers, will come on line in North
America by 2013. 17
Driving these forecasts for growth in mobile payments is strong consumer interest.
• Yankee Group (United States) states that "most consumers, 84 percent, are
interested in mobile payments." 18
• Wired reports that a majority of respondents to a recent survey said they were
interested in using their phones to purchase items at a cash register just as they
would use a credit or debit card. 19
2.5.6.4 Mobile Payment Technology Projections
The mobile technologies most often used for payment include SMS, wireless application
protocol (WAP), unstructured supplementary service data (USSD), and NFC. Figure 10
shows Gartner's estimates for the growth of each technology. 20 Mobile payments as
defined by Gartner include transactions that use banking instruments such as cash, bank
12
"Mobile Payments Surging Ahead with Opportunities in Emerging Markets,” Arthur D. Little, April 2009,
http://www.cellular-news.com/story/37169.php
13
“What paying by cellphone will mean for the marketing world," Advertising Age, October 5, 2009,
http://www.allbusiness.com/marketing-advertising/marketing-techniques/13170333-1.html
14
Gartner, "Wallet of the future? Your mobile phone,” CNN.com, August 13, 2009,
http://edition.cnn.com/2009/TECH/08/13/cell.phone.wallet/index.html
15
Juniper Research, "1 in 6 mobile subscribers to have NFC Mobile Phones by 2014, according to Juniper
Research," press release November 9, 2009,
http://juniperresearch.com/shop/viewpressrelease.php?pr=163
16
Juniper Research, "Transaction Complete! NFC Solutions," September 2009.
17
"What paying by cellphone will mean for the marketing world," Advertising Age, October 5, 2009,
http://www.allbusiness.com/marketing-advertising/marketing-techniques/13170333-1.html
18
Ibid.
19
"2010: The Year of Mobile Banking & Payment," Wired, January 30, 2010,
http://www.wired.com/epicenter/2010/01/mobile-banking-payment
20
Gartner, "Dataquest Insight: Mobile Payment 2006-2010," April 27, 2009, ID: G00168197
Copyright © 2010 National Retail Federation. Page 19
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preserved.
Mobile Retailing Blueprint
accounts, or credit/debit cards, and non-mobile operator stored value accounts (such as
travel cards, gift cards, or PayPal). The forecast does not include transactions that use the
mobile operators' billing systems (such as the purchase of mobile content) or telebanking
by mobile to a service center that uses an interactive voice response (IVR) system. The
forecast does include IVR transactions when used in combination with other mobile
channels (such as SMS) to verify user information.
Mobile Payment Transactions by Technology (in Millions)
3500
3000
2500
2000
1500
1000
500
0
2007 2008 2009 2010 2011 2012
21
Digital Transactions: Trends in the Electronic Exchange of Value, Volume 7, No. 5, May 2010,
http://www.digitaltransactions.net/files/DigitalTransactionsMay10.pdf
Copyright © 2010 National Retail Federation. Page 20
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preserved.
Mobile Retailing Blueprint
Each category in the ecosystem has unique requirements that must be accommodated by
an overall integrated architecture. The payment category requires secure interfaces to an
authorization system, regardless of whether payment is contactless or remote. Mobile
marketing must securely interface with a customer or loyalty system for targeted
marketing opportunities. Mobile operations must securely interface with a variety of
applications used in operating a store. The supporting applications in all three categories
can exist either on the phone or in a data center accessible over the Internet.
Figure 11 is an overview of the mobile ecosystem. This ecosystem is described in more
detail in Section 5.2.3.
3. MOBILE MARKETING
Mobile marketing represents a simple first step for retailers who want to embrace and
benefit from m-commerce. It can transform the way they interact with their customers.
Mobile marketing activities can be categorized as follows:
• Advertising and marketing
• Customer service
• Shopping tools
• Product information
• Loyalty programs
• Promotions and coupons
Consideration Implementation
Security n/a
Privacy n/a
Consideration Implementation
Figure 13: Process Flow for a Device without Geolocation or GPS Capabilities
As Figure 13 shows, when a device has no geolocation or GPS capabilities, the process is
as follows:
1. A customer selects the Find Store option.
2. The customer enters location information, such as a postal code, street address,
city, state, country, or cross streets.
3. The customer initiates the action.
4. The system returns a list of the nearest stores.
Customer
Store Location/Hours
Selects Send GPS Display Selected
“Find Store” Coordinates Store Locations
Store App
Find Closest
Store Locations
Figure 14: Process Flow for a Device with Geolocation or GPS Capabilities
As Figure 14 shows, when a device has geolocation or GPS capabilities, the process is as
follows:
1. The customer selects the Find Store option.
2. The device transmits the customer’s location, using GPS coordinates.
3. The system returns a list of the nearest stores. The screen on which the list is
displayed should offer the option of entering a location manually, to enable a
consumer to find the stores close to an alternate location.
The list of stores is typically limited to 5–10 stores. The store location information
includes operating hours and maps for each store.
3.2.2 Example Applications
Examples of customer service mobile applications are described in Table 4.
• GPS capabilities add the mobile user’s location to a query. Location information
gives consumers more accurate information and allows them to receive answers to
questions such as “where is the nearest store?”
• A link to a mapping capability can help consumers get to a store quickly. Web
services protocols to invoke/embed the mapping functions are available from
many providers, such as Google, Yahoo, and Bing.
• A GS1 Global Location Number (GLN) can identify a location, uniquely where
required.
3.2.2.2 Benefits and ROI
Implementing these customer service functions is intended to drive more traffic to a
retailer’s physical stores. However, it is very difficult to measure the effectiveness of
such functions. There is no measurable link between their invocation and store sales.
Measuring marketing effectiveness suffers from a similar problem.
3.2.2.3 Implementation Considerations
Table 5 lists considerations applicable to implementing customer service applications.
Consideration Implementation
Security n/a
Privacy n/a
Consideration Implementation
2. The list type is defined (perhaps implicitly), and relevant list attributes (event
dates and other details) are defined. It is important to include enough detail to
enable other shoppers to find the appropriate list.
3. The list is created.
• The list can be created by using the mobile device to select items in the store
or at home. An item can be selected by scanning the item’s bar code or RFID
tag. Size, color, style, and quantity information can be added. The current in-
store price should be displayed (and not the online price if it differs).
• As an alternative, the list can be created based on past purchase history.
Figure 17 illustrates the list consumption transaction process.
Consideration Implementation
Data source Product information, like price and inventory, must be kept
current.
Application development costs Applications can be written in house, but using one of the
many available outside development firms may be more
cost effective.
Consideration Implementation
Ease of use on mobile device Typing on a mobile device is cumbersome. So the ease
of navigating the site and selecting the items are of
paramount importance.
behavior. Retailers who can become trusted advisors to their customers will
establish long-term relationships that can be very profitable.
3.3.1 Case Studies
Examples of shopping tools mobile application are described in Table 8.
Consideration Implementation
Security n/a
Privacy n/a
Consideration Implementation
Ease of use on mobile device Many of the tools from third parties are limited by
their access to information. Providing high quality
and timely data can give retailers an edge over
the competition.
22
Motorola Global Holiday Shopper Study, January 11, 2010,
http://85.133.72.103/ImageLibrary/detail.aspx?MediaDetailsID=861
23
Gartner, February 2009.
Copyright © 2010 National Retail Federation. Page 38
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preserved.
Mobile Retailing Blueprint
Figure 18: Likelihood of U.S. Consumers to Use Mobile Phones for Shopping
1. The customer uses a mobile phone to log in to the retailer’s application, using an
e-commerce login ID and password. (As an alternative, customers can use social
networking credentials, such as a MySpace/Gmail ID to sign in or authenticate
themselves to the application.)
2. A home page is presented that is optimized for mobile. This condensed page
includes all the top-level categories.
3. The customer navigates to a category, selects it, and is then presented with all the
products within that category.
4. The customer selects a product image, displaying a product information page
optimized for mobile. The item can be added to the customer’s shopping cart, a
product comparison list, or a mobile shopping list.
A simpler process, shown in Figure 21, allows a customer to review product information
by first identifying the product.
3. The mobile phone retrieves the product information and displays it to the
customer.
4. The product image and a rich set of item information are displayed on the screen
and include, for example, additional information about the product, related items,
and reviews.
3.4.2 Product Information from Friends
Mobile social networking is a growing phenomenon that is extending to retail in the form
of social commerce. Shoppers have mobile access to a wide range of digital content
created by others, including ratings, reviews, and images. Content can be shared with
others over the mobile device. Rich community content can be tied to an item and
identified by a bar code that the mobile device reads and displays. Shoppers can share
specific information with specific friends.
3.4.3 Transaction Process
Two processes can allow friends to share product information. In the first process
(Figure 22), a customer displays product information and is given the option to read
ratings and reviews posted by other shoppers. (In the social context, this information can
be filtered or sorted by friends.)
Customer
Product Information
application
Retailer’s
Friends
The second process (Figure 23) allows a customer to display product information and
provides an option for posting a new rating and reviewing the item.
1. The customer displays the retailer’s home page, optimized for mobile.
2. The customer finds the product category and displays a list of all of the products
in the category.
3. The customer selects two products for comparison.
4. The mobile device displays a condensed comparison page that lists the attributes
of both products in a table. The products can then be compared quickly, based on
attributes and price.
Consideration Implementation
Privacy n/a
Consideration Implementation
Ease of use on mobile device The most difficult part is identifying the product.
The easiest method seems to be by using a
camera to read a bar code. Several libraries of
application software are available for this purpose.
allows consumers to manage their accounts, typically using a Web site. Mobile phones
allow all three functions to be combined in such a way that a consumer has constant
access to the loyalty program. This convenience benefits both the program participant
and the retailer.
The ability to tie a loyalty membership number to a mobile phone not only dramatically
increases consumer participation in a loyalty program, it also enhances the data that is
collected about that consumer. The average household belongs to 14.1 loyalty programs
but is only active in 6.2. 24 The main reasons for this discrepancy are typically a lengthy
sign-up process, not understanding the program, not being able to quickly redeem the
rewards, or simply not wanting to carry multiple cards or key fobs. The mobile phone
can address all of these issues while allowing the program owner to develop data in
addition to data about what the consumer does at the POS.
3.5.1 Transaction Process
Typical examples of current mobile-based loyalty programs range from SMS-based text
or mobile applications with bar codes or numeric codes to RF chips attached to cell
phones. NFC-enabled phones and terminals allow consumers and retailers to interact
directly on loyalty point updates, tracking, and redemption. Figure 25 illustrates one
typical loyalty program process flow. Figure 26 illustrates an alternative (this specific
implementation is included for illustrative purposes only).
24
Report by Colloquy, 2009, http://directmag.com/crm/news/less-half-loyalty-membership-colloquy-
0413/?smte=wr
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Mobile Retailing Blueprint
Today’s solutions all provide similar functions. Customers can opt in to the programs
from their cell phones by sending a short text message or going to a Web site. Once they
have joined the program, customers using a bar-code based system are sent a phone
application that contains an image of a unique bar code. As an alternative, the customer
can receive the bar code through a multimedia messaging service (MMS) message or be
sent something as simple as a text code, delivered using SMS. Follow-on coupons are
sent to the customer, who can redeem them by having the bar code scanned at the store’s
POS system. (An SMS text code can be entered manually at the POS by a store
associate.)
Another solution that works in much the same way uses special codes that are sent to the
customer in a text message (avoiding the need to download an application). The customer
opts in to the program in the same way as in the bar code system. Text messages are sent
with the latest offers, which customers can redeem on line or in the store by providing the
code at checkout.
NFC allows terminals to send loyalty points back to an NFC-enabled phone at the time of
purchase or redeem them when the phone is held close to a contactless POS reader.
Interim alternatives use RF tags affixed to cell phones or integrated into removable
microSD cards that include NFC. Weekly specials or coupons are then sent out in a text
message or picked up by the consumer touching a smart poster with an NFC-enabled
25
Mobile Marketing Associations, U.S. Consumer Best Practices Guidelines for Cross-Carrier Mobile
Content Programs, V5.0, April 2010.
phone. To redeem the coupon, the customer’s phone is tapped on the POS terminal.
While neither the customer’s name nor any personal information is shared with the
retailer, the customer’s buying behavior is tracked through an ID number assigned to
each phone. Future offers can be tailored to specific items, times of visit, or other
purchase data.
3.5.2 Case Studies
Examples of loyalty program mobile applications are described in Table 12.
restaurants:
• Dairy Queen
• Qdoba (Mexican fast-casual)
• Arbys
• Hot Box Pizza
The ability to collect ”closed-loop“ data allows a retailer to deliver more relevant and
personalized one-to-one offers over time at a fraction of the price of using mass market
media. When a consumer views, indicates interest in, and ultimately redeems an offer,
data points can be collected, analyzed, and used to determine the next offer the consumer
sees. The more data that is collected on an individual or across a population segment, the
more intelligent a program owner can be about what drives consumer behavior and,
therefore, what should and should not be sent in the future.
3.5.5 Implementation Considerations
Table 13 lists considerations applicable to implementing customer loyalty program
applications.
Consideration Implementation
Consideration Implementation
26
http://www.nearfieldcommunicationsworld.com/2009/04/03/3928/eagle-eye-solutions-and-vivotech-to-
offer-retailers-nfc-mobile-vouchers/
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Mobile Retailing Blueprint
not want to call such programs coupons or promotions, thinking that the concept of using
coupons may not be well received by their typical customers. They are bundling coupons
or promotions with their mobile loyalty programs, for which consumers sign up by
providing their cell phone numbers and preferences. A consumer is given a contactless
sticker on which a loyalty number is coded and asked to put the sticker on the back of the
mobile phone. Merchants are seeing better participation from their customers with such
loyalty programs (as offered, for example, by Zapa Technologies in Europe or Tetherball
in the United States) as compared to traditional programs.
The NFC-enabled phones with built-in contactless technology that are starting to emerge,
such as the Samsung Star Smartphone, represent another option. Wallet software can be
provided with NFC phones that allow consumers to carry their payment cards and loyalty
cards, provision coupons into their phones over the air (OTA), touch smart posters to
download coupons of interest, and redeem coupons electronically by tapping the phone to
a contactless-enabled POS system. Figure 27 depicts different options for enabling
phones with NFC chips.
specific (a discount coupon for Pizza Hut) or product specific (a discount coupon for a
six-pack of Coke). The coupon or promotion can be redeemed through a 2-D or three-
dimensional (3-D) bar code on the coupon or through a numeric code that is entered
manually by a sales clerk. (Some retailers accept such coupons manually.)
Text- or SMS-based offers require a consumer who signs up for a promotion program
with a merchant to give the merchant a cell phone number. The merchant then uses text
messages or SMS to send coupons and promotions directly to the consumer’s phone.
Loyalty-program-based offers allow consumers who sign up for a loyalty program to
receive coupons, instant awards, and real-time redemptions. Coupons are sent by SMS or
MMS and redeemed by tapping NFC-enabled phones on a contactless-enabled POS.
Coupons and promotions are settled through the back-end server (cloud based).
To receive offers in a smartphone-based wallet, consumers download a coupon
management application to the smartphone. Consumers can search for and receive
coupons using SMS or MMS. The coupons can be redeemed manually, by displaying the
coupon on the screen and showing it to a sales clerk, or automatically, through a back-
end server.
Consumers can also receive offers in an NFC-enabled phone-based wallet, downloading
personalized coupons and promotions. They can receive a coupon by tapping the phone
on a smart poster or shelf tag, or retailers with permission to do so can send them
coupons and promotions. Consumers can carry and manage their coupons and
promotions at all times and redeem them electronically by tapping their phones on a
contactless-enabled POS reader.
One factor that is critical to the success of mobile advertising, coupons, and promotions is
that consumers must be allowed to trigger the mobile marketing programs. A consumer
should be able to request (or opt in to) anything the consumer wants, whenever the
consumer needs it, such as a promotion, coupon, or product information. An SMS-based
proactive promotion campaign may be a good way to get started; however, a consumer
may not always welcome SMS-based coupons or offers. Retailers want to avoid the
spamming problems with which e-mail message campaigns contend. Currently such
messages typically end up in the e-mail junk mailbox.
The contactless capability offered by NFC-enabled phones gives the consumer a greater
level of control and making it easier for consumers to trigger a promotion or a loyalty or
merchandising program by tapping their phones on a shelf tag, smart poster, or POS
terminal.
3.6.2 Case Studies
Examples of promotions and coupon mobile applications are described in Table 14.
Consideration Implementation
Security n/a
Customer support Mobile offers are a great way to interact with the
customer to increase customer loyalty. The only
requirement is an interface between the loyalty or
coupon application and the scanner.
Consideration Implementation
4. MOBILE COMMERCE
Mobile commerce (m-commerce) refers to the sale of products and services over
handheld devices and wireless networks. m-commerce activities can be grouped into two
categories:
• Mobile browser-based m-commerce, which delivers Web sites optimized for
mobile devices with which the consumer interacts using the mobile device’s Web
browser.
Customers browse, search, research, select, save, and purchase from a retailer in
much the same manner as through the retailer’s e-commerce Web site. The major
difference is that the interface is optimized for the resolution and display space
available on the mobile device.
• Application-based m-commerce, which relies on applications (special-purpose
software) that are downloaded to and run natively on a smartphone or other
mobile device.
Customers browse, search, research, select, save, and purchase from a retailer
using the application and within the environment created by the application. The
application is tied to the retailer’s IT systems through an application programming
interface (API), through which content and shopping information is
communicated to the consumer and order and customer information is integrated
with the retailer’s systems.
In either case, m-commerce involves the exchange of money for goods and services using
a mobile device.
4.1 Mobile Browser-Based m-commerce
The mobile Web is how many consumers interact with commerce opportunities over their
mobile devices. Unlimited data plans are available from certain wireless carriers, so the
costs to consumers of using the mobile Web can be low, and use of the mobile Web is
becoming increasingly common. For smartphone owners, using the mobile Web is almost
the same as using a PC-based Web browser to surf the Web. But the typical mobile Web
user today is probably frustrated. Mobile Web access currently suffers from
interoperability and usability problems. These problems stem from the fragmentation of
mobile device platforms and mobile operating systems and the variety of Web browsers
found on different devices. Challenges are raised by screen resolution, screen size, speed
of content delivery, and the wide variety of user input methods, which cover the map
from touch screen to stylus to buttons.
It is currently difficult for a retailer to design and manage the variety of mobile Web
templates that render well on all browsers on all different platforms and phones. In some
cases, it may be just as hard to support all browsers as it is to support native applications
for different mobile operating systems. Standards exist with which most or all mobile
phones comply (specifically, XHTML MP and WCSS) that are very useful for
Figure 29 illustrates an approach in which specific content is provided for each mobile
device type. While this approach is effective, it is not efficient and can lead to
inconsistencies. Therefore, the approach is not recommended as a long-term design.
27
Forrester Research.
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Mobile Retailing Blueprint
28
Forrester Research.
features are bandwidth intensive and difficult to implement on the mobile Web but can be
executed seamlessly within an application.
The ability of applications to leverage key device capabilities can enable the provision of
location-aware content, such as store locators or promotional offers, map integrations,
and push notifications that inform a customer of changes and offers. Cameras in mobile
devices can play a key role in mobile applications, scanning bar codes and QR codes and
taking pictures of products to share socially. Application ability can extend to include
features such as integration with a list of contacts or an address book, giving consumers
easy access to address information while shopping.
Offline browsing is key for users of devices that do not have cellular access, such as the
iPod Touch, or users who may want to interact while not on a network. Being
independent of a network for key portions of the customer experience allows the
customer to shop and interact and then place an order when connected to the network.
4.2.2 Disadvantages
Some retailers are reporting very strong growth from mobile applications. eBay, for
example, expects to generate $1.5 billion in sales using mobile applications in 2010. 29
However, as exciting as mobile applications are to retailers, there are barriers to be
considered, including:
• Platform selection
• Maintenance in a shifting environment
• Content- and commerce-services integration
• SOA and cloud computing
Platform choices depend on the retail market and the customer demographics, and
choosing to support multiple platforms may be problematic from a cost and support
standpoint. Currently, for example, choosing a platform may involve any or all of the
following considerations:
• Apple’s iPhone operating system (OS) is now on version 3.2, with 4.0 to be
available in the near future.
• Google’s Android OS is less than 3 years old.
• Multiple versions of the Research In Motion (RIM) OS are in distribution,
powering a diverse assortment of devices.
• Symbian, while powering the largest number of devices in the world, lacks an
effective software development kit and marketplace for distribution.
• Windows Mobile 6.5.1/Windows Phone 7.0.0/Windows 7 appears to be taking the
same approach as Apple, building a closely controlled ecosystem.
29
“We clearly see that people want to shop on the go – last year we saw $600 million in eBay merchandise
volume come through mobile devices and we expect to more than double that this year with $1.5 billion.”
Steve Yankovich, vice president of mobile at eBay, San Francisco, CA.
http://www.mobilecommercedaily.com/ebay-expects-to-generate-15b-in-merchandise-via-its-mobile-
platform-in-2010/
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Mobile Retailing Blueprint
Table 16 summarizes the current situation with regard to applications running on the
most common platforms.
30
Source: Forrester Research.
The application is designed to require minimal user input by providing intelligent defaults
for most choices. For example, the application uses the iPhone’s GPS feature to
determine the customer’s current location. Tickets can then be purchased by specifying
the destination and authenticating the purchase with a user-defined password.
The application is fully integrated with DSB’s back office, ensuring that purchases are
registered correctly in all relevant back-office systems. Payment is handled through PCI-
compliant payment software that allows the consumer to pay with a payment card. Cards
can be stored for future use. Access to stored cards is based on two-factor authentication
to provide an appropriate level of security. Tickets are delivered both as an image and as
UIC-918-3 compliant 2-D bar codes in AZTEC format.
The application integrates with several systems through HTTP(S), to access the necessary
data and comply with standard certifications such as PCI. Figure 32 is an architectural
overview of the data exchange between the different systems.
By using a mobile payment platform integrated with their e-commerce payment service
provider (PSP), DSB ensures that PCI compliance is pushed to the PSP while maintaining
an optimal user experience during the payment process. Strong integration between the
mobile payment platform and relevant back-office systems ensures that all transactions
are completely transparent.
Payment is handled using a card or stored card scheme that enables spontaneous use of
the ticketing application but ensures the lowest available transaction cost and provides the
traveler with the ability to sign up for the service using a mobile device. This service
enables tourist access to the payment application.
4.3.2 Other m-commerce Applications
Table 17 shows selected portions of the interface with the consumer (screens) and
indicates the functionality provided by other current m-commerce applications.
Application
Sample Screen Key Functionality
Type/Retailer
Browser-based/ Mobile optimized Web-based e-commerce
Columbia site
Sportswear
Application
Sample Screen Key Functionality
Type/Retailer
Downloaded • Search and browse the product
application/ assortment
Tommy Hilfiger • Check out
• Persistent cart with Web-site based e-
commerce site
• Account integration with Web-based e-
commerce site
Application
Sample Screen Key Functionality
Type/Retailer
Hybrid native • Full-sized browser site handles
and browser- transactions
based/ • Daily timed promotions
Target
• Entire product catalog for on-line and
brick and mortar assortments
• Full catalog search
• Access to gift registries and lists
• Ability to check balance, manage, and
purchase stored value cards
• Review local promotions on products
• Product UPC bar code scanning to
locate deep product information
• Store locator
Application
Sample Screen Key Functionality
Type/Retailer
Hybrid native • Full-sized browser site handles
and browser- transactions
based/ • Weekly ads
Home Depot
• Do-it-yourself videos
• Deep product content
• Both on-line and brick and mortar
assortments
• Advanced search
• Store locator
• Shopping list
Consideration Implementation
Security n/a
Consideration Implementation
Application development costs Applications can be written in house, but using one of the
many available outside development firms may be more
cost effective.
Ease of use on mobile device To achieve widespread use, applications must be useful
and very easy to use. No documentation should be
required.
Consideration Implementation
new solutions are emerging from the banking and telecom industries. (For more
information about payment, see Section 5, “Mobile Payment.”)
4.5.2 Integrated Order Management and Customer Care
The m-commerce solution should integrate with the retailer’s e-commerce and direct
channel order management and customer care capabilities. Otherwise, costs will increase
and customer satisfaction will be significantly affected. Enabling a persistent and
“portable” cart that allows a consumer to shop not only over the Web or on a mobile
device (and, in the future, through other interfaces) but also over other channels
simplifies the customer experience and provides benefits for the consumer. Such a
capability also helps retailers measure the multichannel effect of m-commerce. This
capability requires a consistent customer authentication capability.
The return from virtual goods is primarily based on a revenue share model. For each
virtual good sold, a certain percentage goes to the copyright holder, a certain percentage
goes to the distribution platform (for example, Farmville), and a certain percentage goes
to an aggregator, if one is involved. (Depending on how expensive the products are,
there may also be cases where dollar advances are involved.) This space is a relatively
low margin–high volume space, but one that involves a large population, which in turn
may create a unique distribution and promotional outlet alongside incremental revenue
streams.
Payment for virtual goods can be made by consumers registering their credit cards, using
their profiles, or by mobile payments, which is a relatively new method that is
implemented by placing a “pay by mobile” button next to the virtual goods. Buyers
indicate how many credits they want to purchase, type in their mobile number, press
send, and receive a message requesting purchase validation; if they reply to the message
in the affirmative, the purchase is added to their mobile phone bill. Those credits are then
applied to a user’s profile, making the purchase of virtual goods safe, easier to
accomplish than with a credit card, and much faster.
5. MOBILE PAYMENT
Payment for goods or services initiated from a mobile phone or similar device (such as a
personal digital assistant or smartphone) is mobile payment. Juniper Research has
estimated that the "total value of mobile payments for digital and physical goods, money
transfers and NFC (Near Field Communications) transactions will reach almost $630bn
by 2014, up from $170bn this year, representing the gross value of all purchases or the
value of money being transferred." 31 Juniper further forecasts that by 2014, the mobile
payments market for physical goods will be $100 billion.
According to the Federal Reserve Bank of Boston, mobile payments generally fall into
two categories (Figure 33):
• Mobile remote payments, which are payments made to a retailer who is remote
from the mobile consumer
• Mobile contactless payments (also referred to mobile proximity payments), which
are payments made to a physical retailer with the consumer present at the POS
A wide variety of mobile payment approaches and technologies are currently available in
both commercial and pilot deployments. Figure 34 illustrates current mobile payment
approaches by technology, payment size, mobile payment type, and typical purchase
type.
31
Juniper Research, "Mobile Payments Markets: Strategies & Forecasts 2010-2014.”
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Mobile Retailing Blueprint
The mobile phone's power and flexibility can enhance the payment process, supporting
applications that are coupled with payments (e.g., loyalty, coupons, rewards) or providing
the consumer with additional payment choices through mobile wallet software running on
the phone. A mobile wallet or a connection to an online wallets allows the consumer to
pay for purchases using a wide variety of payment types:
• Network-branded credit and debit cards
• Private label credit cards
• Prepaid cards
• Stored value cards
• Automated Clearing House (ACH)/electronic checks
• Gift cards
• Loyalty points
• Coupons
It is important to note that such payments can be implemented as either mobile remote
payments or mobile contactless payments. How the payment accounts are provisioned
for consumer use and how the consumer accesses the accounts will depend on the mobile
payment type and technology.
32
Smart Card Alliance, "Proximity Mobile Payments: Leveraging NFC and the Contactless Payments
Infrastructure," September 2007.
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The following sections describe mobile remote payments and mobile contactless
payments in more detail. The focus is on mobile payments from a consumer to a retailer,
including the use of ACH for mobile payments; the area of person-to-person payments,
an emerging mobile payment area, is beyond the scope of the document.
capabilities for physical goods, paying a retailer for a purchase of digital goods, or paying
at a vending machine. Mobile remote payments can be implemented using either the
existing financial payments infrastructure (e.g., for payment to a Web retailer) or a
closed-loop mobile payments system.
Mobile remote payments are ideal for use in markets that use person-to-person payments
and for under-banked consumers and retailers who are not part of the normal POS
acquirer payment process, such as flea market vendors and seasonal outside vendors.
Figure 35 shows the flow for a mobile remote payment stored-value transaction. ARTS
Digital Receipt schema can be delivered through any of these subchannels, thus reducing
the need to print a physical receipt.
Mobile remote payments can use a variety of mobile phone data channels to initiate a
transaction. 33 Most mobile phones deployed over the last 5 years are equipped with the
functionality to enable remote mobile payments.
Mobile remote payment applications typically employ one of three approaches: SMS
messages, a mobile browser that accesses a mobile Web site, or an Internet-based
alternative payment provider. These approaches are described in more detail in the
following sections.
5.1.1.1 Message-Based Payment
SMS is the technology used most often for mobile payment, mainly because of its
ubiquity and ease of use. A consumer sends a payment request to a common short code,
or CSC (a telephone number), and a premium charge is applied to the consumer’s phone
bill or mobile wallet. Several SMS or MMS exchanges with the retailer are usually
required to complete a transaction. The retailer is informed that the payment has
succeeded and can then release the item purchased to the consumer. Ordering and
confirmation use SMS; delivery of rich content uses MMS or a link through which
content is downloaded. MMS can also deliver bar codes to the consumer, which can then
be scanned to confirm payment and match the consumer to the item purchased.
The advantages of an SMS implementation are that it requires no investment in a mobile
network or user devices and can be completed within a short time. The disadvantage is
that users need to memorize a command and a short code (which can vary by
transaction), and the level of encryption is defined by the mobile network and therefore
typically minimal.
Items purchased using SMS implementations are usually digital, because typically a
trusted delivery address has not been given. Commonly purchased items include music,
ringtones, and wallpapers.
SMS payments were popular in the early stages of mobile payment. However, they may
not provide the best long term option for the following reasons:
1. Poor reliability. Payment can easily fail if messages are lost.
2. Slowness. Sending messages can be slow, and it can take hours for a retailer to
receive a payment. Consumers do not want to wait for more than a few seconds.
3. Lack of security. SMS encryption ends at the radio interface, resulting in a plain
text message.
4. High costs. Many high costs are associated with this method of payment,
including the costs of setting up short codes and paying for the delivery of media,
and the customer support required to account for messages that are lost or
delayed.
5. Low payout rates. The high costs to operators of running and supporting
transactional payments result in payout rates to retailers as low as 30 percent.
33
Candidate data channels use SMS, WAP, or USSD protocols.
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Mobile Retailing Blueprint
6. Low follow-on sales. Once the payment message has been sent and the goods
received, there is little else the consumer can do. It is difficult for consumers to
remember where something was purchased or how to buy it again, which also
makes it difficult to tell a friend.
7. Poor risk management and no protection for consumers or retailers. Operators
provide no risk management for purchases made using a mobile billing system,
and retailers are not guaranteed to receive their money, despite confirmation from
the operator billing systems that the charge has been applied. Consumers receive
no purchase protection and must contact the mobile operator to dispute any
charge. Merchant settlement typically takes place after the consumer pays their
mobile bill, which can delay payment for 30–90 days.
Even with these shortcomings, it is predicted that SMS will maintain its position as the
most popular technology for delivering mobile payments through 2012. 34
5.1.1.2 Browser-Based Payment
Browser-based payment relies on a consumer using the mobile phone's browser to access
a Web page to make a payment. Sensitive data can be communicated securely over SSL.
The mobile experience is very similar to the computer-based experience, with the
resulting benefits:
1. Follow-on sales. Mobile browser-based payments can lead the consumer back to
the retailer's URL, making future access or sharing with friends easier.
2. Familiar user interface. Consumers appreciate the quickness and predictability of
the payment pages. In addition, a mobile payment is as easy to make as a PC
payment, because the Web pages and processes are familiar.
This approach involves several implementation challenges:
• Gartner estimated in 2008 that mobile Web users account for only 16 percent of
mobile users in North America and 28 percent of mobile users in Western
Europe. 35
• Mobile Internet is perceived by consumers to be expensive.
• In research conducted by Nielsen Mobile in April 2008, 23 percent of respondents
cited air-time charges as a reason for not engaging in mobile commerce. 36
• Small devices make entering payment information tedious.
5.1.1.3 Payment Using Internet-Based Alternative Payment Providers
Alternative payment providers, such as PayPal, BillMeLater, Amazon, and Secure Vault
Payments, were originally developed to facilitate Internet purchases and bill payment.
However, the leading alternative payment providers already include mobile purchase
capabilities, and it is likely that all providers will support mobile payments in the near
34
Gartner, “Dataquest Insight: Mobile Payment 2007-2012,” April 27, 2009, G00168197.
35
Ibid.
36
Ibid.
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Mobile Retailing Blueprint
future. Adoption rates for alternative payment methods have continued to increase, and
industry analysts project an even higher market share in the next 3 years.
The traditional business case arguments for Internet retailers to offer multiple payment
types include lower shopping cart abandonment rates, additional sales, and lower
transaction costs. These same arguments apply to mobile purchases. The consumer with
an Internet-capable phone can browse the Web to shop at optimized Web sites that
provide simple navigation for the mobile device, or in some cases, retailers can push
product information using SMS. The consumer can select a link that leads to a check-out
screen. The payment provider commonly offers a more convenient form of authorization.
This authorization usually takes the form of a shorter pass code or account identifier,
which is issued to the consumer on request.
Risks can be associated with these types of payments and, as a result, larger ticket items
or those that tend to be subject to higher fraud rates may not eligible for alternative
payments. In addition, using these payment types for POS purchases can require a
consumer to perform several actions to complete the payment request. However, it is
likely that as the mobile infrastructure continues to develop, and with the introduction of
new roles such as the trusted service manager (TSM), hybrid solutions will be developed
that offer consumers several alternative payment options.
5.1.2 Use Case
A project currently in progress uses mobile remote payment for consumable goods. The
objective of the service is to offer customers the ability to order and pay in one process,
such as for a drive-through pickup transaction, for a delivery, or to avoid a line at a POS.
Actions such as sign up, top up, and presetting favorite menus/combos can be done using
the Web, WAP, or a native application, enabling spontaneous use. (Customers who use
WAP, browser-based, or native app transaction processes for ordering and payments have
more options available to them than customers who use the SMS-based payment
process.)
The service offers coupons and split-tender payments among coupons, as well as stored-
value, credit, and debit payments. At signup, the consumer creates a password and
selects various payment settings (e.g., additional phone numbers assigned to the account).
The customer can initiate the process by using SMS, reloading a WAP page, or launching
a native app.
There are no metrics as yet, nor is the messaging text used final. The implementation
uses CellPoint Mobile mPoint, and Mobile Enterprise Framework (MEF) technology,
coupled with a third party PSP. The system is installed at the client data center and
integrated with the business intelligence (BI), enterprise resource planning (ERP),
finance, and POS systems.
5.1.2.1 SMS Transaction Process
The SMS-based transaction process is typically appropriate for transactions of $30 or
less. A mobile originator (MO) message designating the order and location/delivery
address is sent to the common short code. A confirmation mobile terminated (MT)
message is returned to the customer, detailing the order, price, and location, and
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Mobile Retailing Blueprint
Denmark CellPoint Mobile Commercial Mobile payment using SMS, WAP, and
native app, based on PSMS, WAP billing,
stored payment card, and stored value
account.
Denmark Den Blå Avis (e-Bay) Commercial Mobile payment using PSMS.
United States Starbucks Pilot Mobilization of prepaid loyalty card for the
iPhone using 2-D barcode technology.
United States PayPal Commercial Ability to check accounts and transfer funds
service to other PayPal accounts (PayPal Mobile
and PayPal iPhone application). PayPal
Bump application allows iPhone users to
transfer funds by "bumping" devices.
Primarily a consumer-to-consumer
payment method.
United States Tommy Hilfiger Application Browse collections, use search and filters
to find the latest styles by category, size or
price range. Pan and zoom images to view
details, add to a shopping cart, and check
out with quick-fill capabilities for entering
shipping and billing information.*
* Retail Info Systems News, "Four Retailers Win RIS Mobile App of the Year Awards," April 9, 2010,
http://www.risnews.com/ME2/dirmod.asp?sid=&nm=&type=MultiPublishing&mod=PublishingTitles&mid=2
E3DABA5396D4649BABC55BEADF2F8FD&tier=4&id=9E8F423FE882470CBB8D24F7BFE6D92F
The central mobile platform should ensure compliance with regulatory requirements
(such as the Payment Card Industry Data Security Standard [PCI DSS]) for each of these
payment methods to minimize the PCI overhead. It is not reasonable to expect each of a
retailer’s m-commerce applications to handle PCI compliance. Figure 37 illustrates the
integration points for mobile applications developed for the different subchannels.
Figure 37: Integration of Mobile Applications Using Different Subchannels with the
Retailer's Back Office
include supply chain management systems (to update stock availability), CRM systems
(to update customer information), and ERP systems (to retrieve product information).
The mobile infrastructure must be able to handle ESB operations for legacy environments
when there is no centralized service bus, as illustrated in Figure 38.
• Complete audit trail tracking across all mobile applications, for both messaging
and data communication.
• Billing to associate transactions with the relevant application, thereby providing
finance with a complete traffic report organized by each of the retailer’s
departments.
• Statistic recording, to further increase the level of detail by associating
transactions with a specific application, carrier, and price.
• Transformation between different data formats to simplify integration with the
retail environment.
• Integration into the retail environment, including integration into security and
surveillance systems as well as standard back-office applications such as CRM
and finance.
To support mobile remote payment in particular, the platform should support several of
the following features:
• Carrier billing, such as premium SMS or WAP billing, through integration with
the wireless carrier’s billing systems.
• Payment card-based billing, to allow the retailer to benefit from the payment
infrastructure that is currently commonly used and trusted for e-commerce.
• Stored payment cards, to ensure that an optimal user experience can be offered
and to enable familiar e-commerce features such as one-click shopping.
• Stored value accounts, to offer retailers improved cash flow by allowing
consumers to create prepaid accounts as an integrated part of the payment flow.
• Loyalty points, to allow retailers to provide returning customers with a powerful
incentive to make additional purchases.
• Integration with legacy retail systems such as loyalty systems or retailer-branded
card systems.
The payment accounts and cards on an NFC phone can be thought of as “soft cards." The
images of the soft cards displayed by the wallet software can incorporate the card issuer’s
branded look and feel, as on a plastic card. The images can be displayed at the time of a
purchase, to allow consumers to choose a payment account or card using the mobile
wallet.
A mobile wallet gives consumers flexibility in choosing a payment option and can
support a variety of use cases. For example:
• The wallet can be set up with a consumer-defined default payment card that is
used unless the consumer selects a different card. To use the default card to
complete a transaction, the consumer simply holds the mobile phone close to a
contactless POS terminal.
• The wallet can be set up to support issuer-defined rules for when to require
additional consumer authentication (e.g., a pass code). The requirement for
additional consumer authentication can be determined transaction by transaction,
using the two-way communication capability between the POS and the mobile
phone.
• The wallet can be set up to allow the POS terminal to prompt the wallet to use a
specific payment card in the wallet (e.g., a store-branded card). The consumer
would still have to confirm that selection.
The payment application, issuer’s secret key, and consumer's financial information, such
as an account number and expiration date, are stored in the NFC phone's secure element
(which provides hardware-based cryptography for data security37 ). Depending on the
implementation, the secure element can be:
• A secure smart card chip (similar to the one used for contactless payment cards or
EMV contact smart cards)
• The memory of the phone’s subscriber identity module (SIM), enhanced with
further security to meet payment industry requirements
• An add-on accessory, such as a sticker, microSD card, or phone sleeve
Location of the secure element in a phone is still being debated by the financial industry
and may vary by mobile network type (SIM-based vs. non-SIM based). 38 Regardless, the
secure element is certified by the payment brands and ensures that the consumer's
payment account information and issuer data are stored securely and can only be used for
authorized applications. Vendors are starting to offer SIMs with additional cryptographic
capability that allow for secure storage of not only the consumer's payment account
information, but also the branded contactless payment applications being supported by
the financial industry (such as MasterCard PayPass or Visa payWave).
Figure 41 is an example of an NFC-enabled mobile phone provisioned with wallet
software and a secure element.
37
While the secure element may vary by mobile network, in most cases it will be implemented as a smart
card chip. Smart or "chip" cards are used globally in payments, identity, security, and telecommunications
applications. The subscriber identity module in a GSM phone is a smart card, and the EMV ("chip and
PIN") credit and debit cards being issued in Europe, Asia, Latin America, and Canada are smart cards.
Smart cards have built-in tamper resistance and the unique ability to store large amounts of data securely,
carry out their own on-card functions (e.g., encryption and digital signature), and interact intelligently with
a smart card reader.
38
"Alternatives for Banks to Offer Secure Mobile Payments," Mobey Forum white paper, March 2010,
http://www.mobeyforum.org/?page=white-paper-alternatives-for-banks
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preserved.
Mobile Retailing Blueprint
Figure 41: Example of NFC-Enabled Mobile Phone Provisioned with Wallet and
Secure Element
Consumers could request that soft cards be issued OTA by clicking a few buttons on their
NFC-enabled phones and identifying themselves to the issuers as the correct account
holder. The soft cards would then be downloaded over the mobile network from the card
issuer, facilitated by a TSM, and stored in the mobile phone's secure element. Enhanced
OTA management capabilities could enable issuers to activate cards or cancel lost, stolen,
or over-limit cards. (Section 5.2.3 provides additional details on the mobile contactless
payment flow and the participants in a payment transaction.)
Pilots implementing mobile contactless payment have focused on implementing credit
and debit card payment that leverages the current contactless payment acceptance
infrastructure. However, mobile contactless payment is not limited to this infrastructure.
For example, an NFC pilot, conducted in the San Francisco Bay area in January–May
2008 by Sprint, First Data, and ViVOtech, tested an NFC phone wallet loaded with a
BART transit card and a Jack in the Box prepaid card. Both coexisted in the wallet and
could be used to ride BART trains and pay for meals at Jack in the Box restaurants.
Figure 42 illustrates the wallet used in this trial.
Figure 42: NFC Phone Wallet Used in BART/Jack in the Box Pilot Program
39
Impress, "K-tai White Paper 2010."
40
Smart Card Alliance, "Security of Proximity Mobile Payments," May 2009
Copyright © 2010 National Retail Federation. Page 95
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preserved.
Mobile Retailing Blueprint
United States Sheetz, Wright Pilot Drivers used Sheetz Fleet Business Advantage Card
Express, completed loaded onto NFC-enabled mobile phones to make fuel
ViVOtech in May and convenience store purchases at Sheetz locations.
2009 http://www.progressivegrocer.com/progressivegrocer/cont
ent_display/supermarket-industry-
news/e3i7ee3d207fbb1fda3276468ecc9b11b2b
41
NFC and Contactless Mobile Projects Resource, http://www.nfctimes.com/nfc-projects, lists 118
pilot projects
Copyright © 2010 National Retail Federation. Page 98
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Mobile Retailing Blueprint
United States US Bank, Pilot 6-month trial with US Bank associates and students at
(Washington) McDonald's, Jack completed; Gonzaga University using MasterCard PayPass payment
in the Box, 7- launched in application in NFC-enabled phone
Eleven, Vending Jan. 2008 http://www.nfctimes.com/project/us-us-bank-tests-paypass
at Gonzaga
University,
Venyon,
MasterCard,
Nokia (6131)
United States Sprint, BART, Pilot 4-month NFC pilot. Consumers could use stored value
(California) Jack in the Box, completed; accounts to pay at Jack in the Box, pay transit fares, and
ViVOtech, launched in tap smart posters to get special offers and directions to the
Samsung, Cubic, Jan. 2008 nearest Jack in the Box.
Western Union, http://www.nfctimes.com/project/us-multiapp-trial-involves-
NXP, Acumen transit-agency-fast-food-restaurant
Transit, BAH, First
Data
United States Cellular South, Pilot 3-month NFC pilot with 50 retailers; MasterCard PayPass
(Mississippi, Bank of America, completed; application on NFC-enabled mobile phone.
Tennessee) MasterCard, launched in http://www.nfctimes.com/project/usa-small-telco-handset-
ViVOtech, June 2007 maker-trial-nfc
Obopay, Kyocera
United States Cingular, Citi, Pilot 6-month pilot with MasterCard PayPass application on
(New York) G&D, Venyon, completed; NFC-enabled mobile phone. Consumers could use phone
ViVOtech, launched in at contactless-enabled retailers and on the NYC Transit
MasterCard, NXP, Jan. 2007 subway.
Nokia http://www.nfctimes.com/project/us-citi-tests-tapping-
subway-fares-nyc
Citi is reported to be launching a sticker-based product in
2010.
United States First Data, Tyfone, Prepilot Organizations are announcing support for NFC microSD
Visa, cards to enable mobile contactless payment prior to NFC-
DeviceFidelity enabled phones being available.
• First Data announced plans to offer Tyfone's NFC
microSD cards for mobile contactless payments.
http://www.nearfieldcommunicationsworld.com/20
10/03/16/33237/first-data-to-offer-tyfones-sidetap-
nfc-microsd-cards-will-run-first-trials-in-us-from-
mid-2010/
• Visa and DeviceFidelity announced plans to offer
the Visa PayWave contactless payment with
DeviceFidelity's NFC microSD card.
http://www.theinquirer.net/inquirer/news/1592422/
visa-sticks-nfc-microsd-card.
Canada Rogers, Royal Pilot Pilot with RBC, Visa, and Rogers using SIM-based NFC
Bank of Canada, completed, mobile phones with Visa payWave credit card application.
Visa, Gemalto, Sept. 2009 Consumers made everyday purchases at local merchants.
Motorola http://www.nfctimes.com/project/canada-royal-bank-
canada-and-rogers-wireless-test-paywave
Canada Bank of Montreal, Pilot in Pilot with BMO, MasterCard, and RIM associates using
MasterCard, G&D, process; contactless PayPass stickers attached to a Blackberry
INSIDE launched in smartphone. Users can pay with the sticker and get
Contactless, RIM Nov. 2009 confirmation e-mail messages for each transaction sent to
Blackberry their phones.
http://www.nfctimes.com/project/canada-mastercard-and-
bank-tests-paypass-sticker-blackberrys
Canada Bell Canada, Pilot in Pilot using contactless stickers that are linked to the
Rogers, Telus, process; prepaid Zoompass mobile cash account. Subscribers can
EnStream, launched in make purchases at any contactless-enabled retailer.
Peoples Trust Feb. 2010 http://www.nfctimes.com/project/canada-telco-joint-
Bank, venture-trials-contactless-stickers
MasterCard, G&D, http://blog.zoompass.com/2010/03/03/the-zoompass-tag-
INSIDE and-your-mobile-phone-all-you-need-to-make-purchases/
Contactless
UK O2, Transport for Pilot Consumers were able to use Oyster and Visa payWave
London, completed on a Nokia 6131 NFC-enabled mobile phone to pay for
Barclaycard, Visa in May public transport and retail purchases.
Europe, TranSys, 2008 http://www.mobilemarketingmagazine.co.uk/content/o2-
Nokia, AEG launches-major-london-nfc-trial
http://www.mobilemarketingmagazine.co.uk/content/o2-
hails-nfc-trial-success
Spain Telefonica, Visa, Pilot 6-month trial with consumers able to use their NFC-
La Caixa, announced enabled phones to make purchases at 500 shops in
Samsung in Feb. Sitges, with plans to extend the trial to Barcelona.
2010 http://www.nearfieldcommunicationsworld.com/2010/02/11
/32661/telefonica-announces-nfc-trial-in-sitges-spain/
Colombia Redeban Pilot Pilot to be launched in the first quarter of 2011 in Bogota,
Multicolor, Comcel announced with POS terminals accepting PayPass transactions from
in May NFC-enabled mobile phones.
2010 http://www.nfctimes.com/news/paypass-nfc-trial-planned-
colombia
Australia Telstra, National Pilot 3-month pilot with consumers able to pay with NFC-
Australia Bank, completed enabled mobile phones.
Visa in Nov. http://www.nearfieldcommunicationsworld.com/2009/02/24
2008 /3780/australias-first-nfc-trial-hailed-a-success/
Singapore SingTel, NETS, Pilot Subscribers used NFC-enabled mobile phones to pay with
ViVOtech, Nokia, completed; NETS e-purse at contactless enabled retailers, download
NXP launched coupons from smart posters and redeem them at the
July 2008 POS, and top up mNETS cash cards.
http://www.nfctimes.com/project/singapore-singtel-trial-
enables-ota-reloads-nets-purse
India Citi, Vodafone Pilot Consumers used NFC-enabled mobile phones to pay with
Essar, ViVOtech, completed; MasterCard PayPass application and redeemed mobile
Nokia, launched in coupons downloaded from smart posters.
MasterCard June 2009 http://www.nfctimes.com/project/citi-tap-and-pay
Japan KDDI, Orico, Jibun Pilot 8-month trial with consumers able to use NFC-enabled
Bank, Credit launched in mobile phones for a range of applications, including retail
Saison, Aiwai May 2010 payment, cinema ticketing, and mobile ID.
Card Services, http://www.nfctimes.com/project/japan-kddi-launch-
Toho Cinemas, multiapplication-nfc-trial-felica-country
ANA, Japan
Airlines, Toyota
Motor, Gemalto,
Toshiba,
MasterCard
Worldwide,
Hitachi, plus
others
Malaysia Maxis, Visa, This was the first commercial launch using the NFC
Maybank phone with an embedded secure element.
http://www.maxis.com.my/mmc/index.asp?fuseaction
=press.view&recID=373
Table 22 lists mobile contactless payment commercial deployments in Asia. The projects
in Table 22 are based on contactless devices that are not considered full-featured NFC
devices (they do not implement all three of the communication technologies mandated by
the NFC Forum). However, the technology used in these projects is a subset of the
technology promoted by the NFC Forum, and the use cases and applications are
essentially the same as a fully NFC-enabled implementation.
S. Korea Many: SK Telecom, 63% of citizens have made payments using mobile
KSSC/T-money, LG phones; 3.5 million citizens use mobile phones for
Telecom, KT contactless payments. More than 1 million subscribers
use T-money (electronic cash).
http://www.itif.org/files/2009-mobile-payments.pdf
informational material (e.g., displays that indicate merchant acceptance) may also
be valuable at the POS to promote consumer use of mobile contactless payments.
9. Whether training is required for sales clerks to support the use of phones for payment.
5.2.6.2 Store Requirements to Support Mobile Contactless Payments
One basic requirement for accepting mobile contactless payments is installation of a
contactless payment acceptance infrastructure that, at a minimum, accepts branded (e.g.,
American Express, Discover, MasterCard, Visa) contactless credit/debit/prepaid cards.
Retailers should also be sure that the contactless payment solution they select can accept
the retailers’ own branded or other closed-loop credit, prepaid, gift, and loyalty cards and
support PIN-enabled ATM/check/debit cards, coupons, vouchers, digital receipts, and
club/membership validations. Even if support for these applications is not currently
required, the contactless POS solution should be capable of supporting these applications
in the future by accepting new software downloads.
Retailers should also consider several additional implications of supporting consumers
who use the mobile phone instead of a card as the payment device:
• Most people can generally access their phones more quickly than they can access
a wallet storing a card.
• Consumers typically have to juggle less material at the POS to complete payment
(i.e., physical wallet, separate payment and loyalty cards, sometimes attached to a
keychain, multiple coupons, split tender transactions requiring multiple payment
cards).
• Paper receipts are unnecessary.
• Consumers are accustomed to paying with a card and can do so fairly
automatically, with little thought. Using a mobile phone to make a payment may
initially take additional thought, depending on how the application is
implemented and the number of keystrokes required (i.e., entering a password to
unlock the phone wallet or payment card).
• Combining payment, loyalty, and coupon redemption in one transaction may
require additional software at the POS and additional interaction with the mobile
device. (This additional interaction will cease to be an issue as the consumer
becomes more familiar with mobile payment and the applications become more
streamlined.)
Taking the above points into consideration, retailer management should address the
following requirements:
• Place the contactless reader on the counter so that it is easily seen as consumers
approach the POS. Consumers can then begin to access their mobile phones
earlier.
• Train cashiers so that they understand the processes for accepting contactless
payments, the authorization processes (if required), and what to do if a transaction
fails.
• Perform research, evaluation, and related efforts to employ the most seamless
contactless integration solutions and hardware that also allow for easy future
upgrades.
• Give consideration to minimizing what is required to initiate the payment
application, making it as simple as possible for the consumer.
• Plan properly to incorporate loyalty or other CRM programs into a contactless
payment rollout as part of a phased approach.
5.2.7 Phased Approach for Implementing Mobile Contactless Payments
Although a mobile contactless payment program could initially offer multiple features
and services, the consumer’s ability to change behavior and comprehend and take
advantage of a full-featured contactless experience immediately may be a limiting factor.
In addition, launching a full-featured solution right off the bat can be complex. A
carefully phased approach can fine-tune features and interactions as they are introduced
and used. Adopting a phased approach, however, does not negate the need for good
planning at the beginning to reduce the likelihood that unexpected issues will arise.
Retailers may decide that the following phased implementation approach addresses their
business needs:
• Phase 1: Branded contactless and mobile payments
• Phase 2: Retailers’ own brand or closed-loop payment or loyalty cards
• Phase 3: Redemption of coupons, vouchers, offers, club/membership validation
• Phase 4: Delivery of digital receipts, coupons/promotions, coupon redemption,
or other information from the POS to the mobile phone
A retailer could decide to implement one or more of these phases simultaneously.
It is important that the contactless POS solution chosen to implement whatever phase is
the first phase is a solution that can also support subsequent phases without requiring any
hardware changes.
5.2.8 Roadblocks to Mobile Contactless Payment
Two major roadblocks stand in the way of mobile contactless payment:
1. Cost and ROI of implementing a contactless POS acceptance solution
2. Lack of NFC-enabled mobile phones
Two types of costs are involved in implementing a contactless POS acceptance solution:
the cost of the hardware and software, and the cost of deployment, disruption, and
training. Combining the contactless enablement project with another planned POS
project (for example, implementation of PCI-approved pads or end-to-end encryption)
can cut the cost of implementing the contactless POS solution almost in half. It is also
important for the retailer to consider how compatible the contactless payment
infrastructure will be with any desired future mobile contactless capabilities.
Within the United States, multiple pilot projects have demonstrated strong consumer and
retailer demand for NFC-enabled mobile phones; however, currently such phones are not
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preserved.
Mobile Retailing Blueprint
42
Fujitsu, "ROI: Proof, Not Promises," http://www.fujitsu.com/caribbean/news/inthenews/roi.html
43
CIOview, "Business Benefits of Utilizing ROI Analysis,"
http://whitepapers.techrepublic.com.com/abstract.aspx?docid=25936
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preserved.
Mobile Retailing Blueprint
44
One lower-cost payment alternative is already available: ACH transactions, which some retailers already
use (for example, PayPal Mobile).
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preserved.
Mobile Retailing Blueprint
45
Cellular-news, "Mobile Retail Market to Exceed $12 Billion by 2014," March 9, 2010, http://www.cellular-
news.com/story/42311.php.
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For quick service restaurants, mobile payment may reduce product waste. If customers
use a mobile device to order what they want before they get to the restaurant, fewer
products must be prepared ahead of time.
5.5.3 ROI Model
To help determine potential ROI, a self-assessment tool was developed in conjunction
with this document that can be used to identify the costs and benefits of supporting
mobile payment and deliver an ROI estimate.
Every retailer’s ROI analysis is unique. Most cost and benefit factors are the same, but
actual cost and benefit amounts are peculiar to each retailer’s situation. The following
ROI model uses a hypothetical example to identify the major cost and benefit factors
related to accepting mobile payments and mobile coupons at the POS. The ROI model
assumes that new technology (such as smart card contactless technology or an NFC-
enabled smartphone) is available at the POS to supplement or be integrated with
traditional card swipe technology.
The model does not consider ramp-up time for consumer adoption. A proof-of-concept
pilot is highly recommended to minimize risk and evaluate consumer reaction.
The ROI model is divided into two major sections: benefit factors and cost factors. Each
section is broken down into more detailed components. Within each section, current state
and future state columns (Figure 47) indicate how revenue and processing costs change.
BENEFIT FACTORS
Current State Future State
1. Sales Information
2. Transaction Payment Information 100% 100%
3. Transaction Payment Processing Cost Factors
4. Annual Transaction Payment Processing Costs
5. Total Benefits
COST FACTORS
1. Store Information
2. Hardware Infrastructure Unit Cost Extended
3. Software Infrastructure
4. Implementation Costs Unit Cost Extended
5. Total Cost
Table 24: Parameters in the Sales Information Section of the ROI Model
Benefit Factors
Current State Future State
1. Sales Information
Annual Revenue $ 500,000,000 $ 501,000,000
Annual POS Transactions 10,000,000 10,010,000
Average Sales / Transaction $ 50.00 $ 50.05
Incremental % Increase of Sales N/A 0.10%
Incremental % Increase of Transactions N/A 0.10%
Margin Contribution N/A 40%
existing payment types is therefore entered in the Future State column. For example, if
mobile payments will reduce cash payments by 5 percent and current cash payments are
20 percent, then enter 15 percent in the Future State column for cash payment type. The
percentage for current and future states must total 100.
Table 25: Parameters in the Transaction Payment Information Section of the ROI
Model
Figure 49 shows a sample retail company’s current and future percentage of annual POS
revenue (as derived in Section 5.5.3.1) by payment type. In this example, New Mobile
Payments are projected to be 20 percent of Annual POS Revenue.
Benefit Factors
Current State Future State
2. Transaction Payment Information 100% 100%
% Cash Payments 20% 15%
% Credit Debit Interchange Payments 30% 25%
% ATM Debit Payments 35% 25%
% Check Payments 5% 5%
% ACH Payments 7% 7%
% Gift Card Payments 3% 3%
% Cobranded Credit/Debit Payments 0% 0%
% Private Label Credit Payments 0% 0%
% Stored Value Payments 0% 0%
% New Mobile Payments #1 - Fixed Fee per Transaction N/A 10%
% New Mobile Payments #2 - Fixed Fee per Transaction N/A 0%
% New Mobile Payments #3 - % per Transaction Amount N/A 10%
% New Mobile Payments #4 - % per Transaction Amount N/A 0%
Table 26: Parameters in the Payment Processing Cost Factors Section of the ROI
Model
Figure 50 shows an example of a retailer’s processing costs for each payment type. In
this example, the new mobile payment transaction fixed fee is projected to be $0.28 per
transaction.
Benefit Factors
Current State Future State
3. Payment Processing Cost Factors
Cost to Handle $100 in Cash & Coin $ 0.80 $ 0.80
Credit/Debit Transactions Interchange Rate 2.00% 2.00%
ATM Debit Fixed Fee per Transaction $ 0.59 $ 0.59
Cost to Handle Checks per Transaction $ 0.75 $ 0.75
ACH Fixed Fee per Transaction $ 0.59 $ 0.59
Cost to Handle Gift Card per Transaction 0.80% 0.80%
Cost to Handle Cobranded Credit/Debit per Transaction 1.00% 1.00%
Cost to Handle Private Label Credit per Transaction 1.25% 1.25%
Cost to Handle Stored Value Cards per Transaction $ 0.25 $ 0.25
Cost for New Mobile Payments #1 - Fixed Fee per Transaction N/A $ 0.279
Cost for New Mobile Payments #2 - Fixed Fee per Transaction N/A $ 0.279
Cost for New Mobile Payments #3 - % per Transaction Amount N/A 2.00%
Cost for New Mobile Payments #4 - % per Transaction Amount N/A 2.00%
PL Coupon Redemption Processing Cost % of Sales 0.0000% 0.0000%
Mfg Coupon Redemption Processing Cost % of Sales 0.0000% 0.0000%
Figure 50: Retailer’s Payment Processing Costs
Table 27: Parameters in the Annual Payment Processing Costs Section of the ROI
Model
Payment Processing Costs % of Annual Sales Total current Total future state cost as a
state cost as a percentage of future state
percentage of POS sales
current state
POS sales
Figure 51 illustrates a retailer’s annual transaction processing costs based on the inputs
from the previous sections. In this example, new mobile payment fees are projected to
cost $780,780 for processing 20 percent of all POS transactions.
Benefit Factors
Current State Future State
4. Annual Payment Processing Costs
Cost Related to Chargebacks $ - $ -
Cash Transactions $ 800,000 $ 601,200
Credit/Debit Transactions $ 3,000,000 $ 2,505,000
Debit Transactions $ 2,065,000 $ 1,476,475
Check Transactions $ 375,000 $ 375,375
ACH Transactions $ 413,000 $ 413,413
Gift Card Transactions $ - $ -
Cobranded Credit/Debit Transactions $ - $ -
Private Label Credit Transactions $ - $ -
Stored Value Cards Transactions $ - $ -
New Mobile Payments #1 Transactions N/A $ 279,537
New Mobile Payments #2 Transactions N/A $ -
New Mobile Payments #3 Transactions N/A $ 1,002,000
New Mobile Payments #4 Transactions N/A $ -
Private Label Coupon Redemption Processing Cost $ - $ -
Mfg Coupon Redemption Processing Cost $ - $ -
Total Current & Future Costs $ 6,653,000 $ 6,653,000
Payment Processing Costs % of Annual Sales 1.33% 1.33%
Figure 51: Retailer’s Annual Transaction Processing Costs
5.5.3.5 Benefit Factors—Total Benefits
The total benefits section of the ROI model calculates the following:
Benefit Factors
5. Total Benefits
BENEFIT FACTORS
Current State Future State
1. Sales Information
Annual Revenue $ 500,000,000 $ 501,000,000
Annual POS Transactions 10,000,000 10,010,000
Average Sales / Transaction $ 50.00 $ 50.05
Incremental % increase of sales N/A 0.10%
Incremental % increase of transactions N/A 0.10%
Margin Contribution N/A 40%
2. Transaction Payment Information 100% 100%
% Cash Payments 20% 15%
% Credit Debit Interchange Payments 30% 25%
% ATM Debit Payments 35% 25%
% Check Payments 5% 5%
% ACH Payments 7% 7%
% Gift Card Payments 3% 3%
% Cobranded Credit/Debit Payments 0% 0%
% Private Label Credit Payments 0% 0%
% Stored Value Payments 0% 0%
% New Mobile Payments #1 - Fixed Fee per transaction N/A 10%
% New Mobile Payments #2 - Fixed Fee per transaction N/A 0%
% New Mobile Payments #3 - % per transaction amount N/A 10%
% New Mobile Payments #4 - % per transaction amount N/A 0%
3. Payment Processing Cost Factors
Cost to handle $100 in cash & coin $ 0.80 $ 0.80
Credit/Debit Transactions Interchange Rate 2.00% 2.00%
ATM Debit Fixed Fee per transaction $ 0.59 $ 0.59
Cost to handle Checks per transaction $ 0.75 $ 0.75
ACH Fixed Fee per transaction $ 0.59 $ 0.59
Cost to handle Gift Card per transaction 0.80% 0.80%
Cost to handle Cobranded Credit/Debit per transaction 1.00% 1.00%
Cost to handle Private Label Credit per transaction 1.25% 1.25%
Cost to handle Stored Value Cards per transaction $ 0.25 $ 0.25
Cost for New Mobile Payments #1 - Fixed Fee per transaction N/A $ 0.279
Cost for New Mobile Payments #2 - Fixed Fee per transaction N/A $ 0.279
Cost for New Mobile Payments #3 - % per transaction amount N/A 2.00%
Cost for New Mobile Payments #4 - % per transaction amount N/A 2.00%
PL Coupon Redemption Processing Cost % of Sales 0.0000% 0.0000%
Mfg Coupon Redemption Processing Cost % of Sales 0.0000% 0.0000%
4. Annual Payment Processing Costs
Cost related to Charge Backs $ - $ -
Cash Transactions $ 800,000 $ 601,200
Credit/Debit Transactions $ 3,000,000 $ 2,505,000
Debit Transactions $ 2,065,000 $ 1,476,475
Check Transactions $ 375,000 $ 375,375
ACH Transactions $ 413,000 $ 413,413
Gift Card Transactions $ - $ -
Cobranded Credit/Debit Transactions $ - $ -
Private Label Credit Transactions $ - $ -
Stored Value Cards Transactions $ - $ -
New Mobile Payments #1 Transactions N/A $ 279,537
New Mobile Payments #2 Transactions N/A $ -
New Mobile Payments #3 Transactions N/A $ 1,002,000
New Mobile Payments #4 Transactions N/A $ -
Private Label Coupon Redemption Processing Cost $ - $ -
Mfg Coupon Redemption Processing Cost $ - $ -
Total Current & Future Costs $ 6,653,000 $ 6,653,000
Payment Processing Costs % of Annual Sales 1.33% 1.33%
5. Total Benefits
BENEFIT FACTORS
Current State Future State
1. Sales Information
Annual Revenue $ 500,000,000 $ 501,000,000
Annual POS Transactions 10,000,000 10,010,000
Average Sales / Transaction $ 50.00 $ 50.05
Incremental % increase of sales N/A 0.10%
Incremental % increase of transactions N/A 0.10%
Margin Contribution N/A 40%
2. Transaction Payment Information 100% 100%
% Cash Payments 20% 15%
% Credit/Debit Interchange Payments 30% 25%
% Debit Payments 35% 25%
% Check Payments 5% 5%
% ACH Payments 7% 7%
% Gift Card Payments 3% 3%
% Cobranded Credit/Debit Payments 0% 0%
% Private Label Credit Payments 0% 0%
% New Mobile Payments N/A 20%
3. Payment Processing Cost Factors
Cost to handle $100 in cash & coin $ 0.80 $ 0.80
Credit/Debit Transactions Interchange Rate 1.89% 1.89%
Debit Transaction Fee $ 0.59 $ 0.59
Cost to handle Checks per transaction $ 0.75 $ 0.75
ACH Transaction Fee $ 0.59 $ 0.59
Cost to handle Gift Card per transaction 0.80% 0.80%
Cost to handle Cobranded Credit/Debit per transaction 1.00% 1.00%
Cost to handle Private Label Credit per transaction 1.25% 1.25%
New Mobile Payment Transaction Fee N/A $ 0.39
New Mobile Payment % Rate per transaction N/A 0.00%
PL Coupon Redemption Processing Cost % of Sales 0.0000% 0.0000%
Mfg Coupon Redemption Processing Cost % of Sales 0.0000% 0.0000%
4. Annual Payment Processing Costs
Cost related to Charge Backs $ - $ -
Cash Transactions $ 800,000 $ 601,200
Credit/Debit Transactions $ 2,835,000 $ 2,367,225
Debit Transactions $ 2,065,000 $ 1,476,475
Check Transactions $ 375,000 $ 375,375
ACH Transactions $ 413,000 $ 413,413
Gift Card Transactions $ - $ -
Cobranded Credit/Debit Transactions $ - $ -
Private Label Credit Transactions $ - $ -
New Mobile Payment Transactions N/A $ 780,780
New Mobile Payment % Rate per transaction N/A $ -
Private Label Coupon Redemption Processing Cost $ - $ -
Mfg Coupon Redemption Processing Cost $ - $ -
Total Current & Future Costs $ 6,488,000 $ 6,014,468
Payment Processing Costs % of Annual Sales 1.30% 1.20%
5. Total Benefits
Table 28: Parameters in the Cost Factors Section of the ROI Model
Store Information
Hardware Infrastructure
Software Infrastructure
Implementation Costs
Figure 54 is an example of the cost factors section of the mobile payment ROI model.
Cost Factors
1. Store Information
Number of Stores 750
Average POS Devices / Store 1.5
Number of People in Call Center - Store Operations Support 10
2. Hardware Infrastructure Unit Cost Extended
Cost Avoidance 150 $ 168,750
New Hardware Cost - Per POS 600 $ 675,000
Installation Cost - Per POS 50 $ 56,250
Annual Service/Support POS 15 $ 16,875
Total Hardware Infrastructure Costs $ 579,375
3. Software Infrastructure
Cost Avoidance $ -
POS Software Customization $75,000
Mobile Coupon Redemption Application $ -
Total Software Infrastructure Costs $75,000
4. Implementation Costs Unit Cost Extended
Training Cost - Per Store 35 $ 26,250
In-Store Materials - Per Store 25 $ 18,750
Rework Store Layout for Pickup of Mobile Orders $ -
Call Center Training Cost 500 $ 5,000
$ 50,000
5. Total Cost
6. MOBILE OPERATIONS
Mobile devices used by associates can have a significant positive impact on the
efficiency of retail operations. Already, wireless devices have been in use for over 20
years in retail stores and distribution centers, increasing productivity, maintaining
inventory accuracy, and reducing expenses. This section focuses on the currently
implemented mobile operational functions—POS, workforce management, and internal
communications—and describes how to use mobile devices to improve operations in
those areas.
It is anticipated that the use of smartphones for internal operations will expand greatly, as
future phones are enhanced with new features (such as RIFD readers) and manufactured
to a high level of strength, reducing breakage and malfunctions. As functionality
increases, it is expected that retailers will move beyond their current top priorities—
mobile marketing, commerce, and payment—to incorporate the use of mobile devices
into additional operational processes. 46
46
The use of mobile devices in additional operational processes will be explored in future releases of this
blueprint.
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Mobile Retailing Blueprint
bar. The customer can use the dialog link to send a message to the waiter requesting
additional service. Throughout the meal, the waiter and customer can monitor and
influence the pace of the meal in an unobtrusive way.
When it comes time to pay the bill, the waiter can use a table-side mPOS device to
communicate with the customer’s mobile device and present the bill for payment. The
waiter can offer the customer several options for viewing the bill. For instance, a list of
items served and a total amount can be displayed. Alternatively, the customer may ask to
see what each person in the party ordered so that each can pay their own part of the bill.
Bill payment could then be authorized exclusively from the customer’s mobile device or
from some combination of the devices carried by the other members of the dinner party.
The waiter could accept any type of payment, such as:
• Chip and PIN card (debit/credit)
• Contactless card (debit/credit)
• NFC-enabled mobile phone
• Electronic cash transfer
After payment is processed, the customer can choose where the waiter sends the receipt:
to the customer’s device, an e-mail address, or a local printer.
The hostess can be notified that the customer is leaving and send a message thanking the
customer for coming and offering an incentive to return in the near future. This incentive
can be automatically stored in the customer’s mobile device. Upon the customer’s return,
the customer will be reminded that the incentive is available.
6.1.1.2 In-store Product Information to Aid Customer Merchandise Selection
An innovative approach to mobilizing product information would be to allow the
customer to use the mobile device for self-service. When a customer enters a store, the
customer’s mobile device is recognized by the retailer’s system, using technology similar
to that described in Section 6.1.1.1. The customer uses the device to enter the name of
an item or product category of interest, and the GPS in the mobile device guides the
customer to the product. A message is sent to the in-store controlling server recording
the customer’s interest. A sales assistant can be notified and sent to aid the customer.
In many cases, after customers narrow their product selections to a few choices, they
want additional information. A “Need Assistance” icon can be added to the mobile
device’s desktop. Selecting the icon sends a message to the store server, which sends a
message request to the nearest available store associate’s GPS-enabled mobile device and
directs the associate to the customer. The store associate may use the scanner on the
device to read a bar code or use an RFID tag, NFC tag, or some other identifier to retrieve
additional product information. The store associate may also forward other relevant
product information, such as data sheets, product comparison ratings, or manufacturer’s
product video presentations, to the customer’s mobile device to aid in final product
selection. In-stock information, pricing, and other incentives may be made available to
the store associate to help promote the sale.
If the sale is one that would require removing an item from store inventory, the sales
associate can determine the item’s availability and current location for efficient delivery.
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If the product is available and the customer wants to purchase it, the sales associate could
use the device to act as a POS terminal, conclude the purchase, and transfer a receipt to
the customer’s mobile device. If necessary, the sales associate could then send a message
to the fulfillment desk and make the product available for customer pickup.
6.1.1.3 Self-Service Checkout
Another potential use of mPOS is to implement self-service checkout. The customer can
walk up to the self-service checkout and notify it of the customer’s payment choice
(mobile wallet). The checkout scans the items in the shopping basket (for example, using
an RFID reader). After totaling the items, it sends the list to the customer’s mobile
device using NFC. The customer sends the total to the mobile wallet over the cloud, with
instructions to pay the total and report the payment to the POS at checkout. Upon receipt
of payment notification, the POS finalizes the transaction and the customer leaves the
store with the purchased items. A real benefit is that at no time is customer payment
information exposed in the store infrastructure and data systems. No customer payment
information is present in the store.
6.1.2 Technology and Standards Employed
The above examples require a number of cooperative tasks that have only recently
become possible and that rely on many industry standards. The recent and future
availability of a rich set of hardware and software solutions to offer the consumer an
enhanced user experience and create customer loyalty with the retailer depends on
standards. Some of these standards organizations are listed below; the standards
themselves are discussed in Section 6.1.4:
• Association of Retail Technology Standards (ARTS), which defines software
application-to-application interoperability, hardware connectivity, and a data
model that allows disparate systems to communicate.
• GS1 US (formerly the Uniform Code Council)
• NFC Forum
• European Payments Council (EPC)
• Smart Card Alliance (SCA)
• National Automated Clearing House Association (NACHA)
• EuroPay, MasterCard, and VISA (EMV)
• Global Platform
In addition to the standards defined by these organizations, mobile initiatives that include
a mobile payment component must adhere to the Payment Card Industry Data Security
Standard (PCI DSS).
6.1.3 Benefits and ROI
Allowing customers to use their mobile phones to obtain accurate product information
and pay quickly, with no checkout line delay, creates satisfied customers. Satisfied
customers shop more often in their favorite stores, increasing sales and margins. In
addition, the retailer’s payroll will be reduced, as the requirement for associate interaction
with customers to provide product information and process sales at POS is reduced.
6.1.4 Implementation Considerations
The backbone of the mPOS system is a highly reliable, responsive network. A secure,
seamless wireless connection must be available throughout the store to ensure that the
mobile devices can connect and interoperate. In addition, cell phone repeaters and GPS
triangulation nodes must be installed to ensure that mPOS devices and customer devices
can be located. Cost savings and increased levels of service will not be realized if store
associates or customers have trouble connecting mobile devices to the store’s
infrastructure.
One critical implementation consideration is the need to provide an infrastructure that
protects data. The data that the customer provides and the processing of sensitive
information during the payment process must always be completely secure.
ARTS has undertaken an initiative to create an end-to-end encryption standard that could
provide a high degree of transaction security. Any customer-sensitive data (credit card
numbers, authorization numbers) are encrypted at the customer data-entry point and
delivered through the network to the final point of decryption at a payment authorization
facility.
In addition, all levels of communication processing must use well established, secure data
transmission technologies to protect against data extraction and spoofing (a situation in
which a person or program successfully masquerades as another person or program to
obtain information) during transfer. For example, the wireless links must use robust
transport security to prevent possible data compromise through illegal data sniffing
(monitoring of data passing over a network).
Consumer data protection should be in place to protect customer data. In other words,
the retailer must never allow unprotected data to be transmitted. The best practice is
never to store customer sensitive data. If storage cannot be avoided, make sure the data is
encrypted.
monitoring services are managed and delivered. This model minimizes the infrastructure
footprint at the store, reduces the overall capital expenditure investment (the SaaS
provider invests in the hardware, software, and project costs), and simplifies the IT
systems management process.
Communi- Labor
Time
cation Budgeting,
and
and Forecasting,
Attendance
Planning Scheduling
Workforce
Hosted Workforce Management Portal
Manage- Central
Workforce
ment Management
Manage-
Planning Platform
ment
& Mobile Devices
Solution
Directives (cell phones, two-way radios,
biometric readers, NFC devices,
& location- based GPS devices)
Core Operations
(Buy, Sell, Move, Corp
Store Store
Managers Associates
and requests from store associates immediately. This information can be synchronized
seamlessly and sent back to corporate planners for workforce prioritization and planning
purposes.
6.2.1.2 Labor Budgeting, Forecasting, and Scheduling
Appropriate labor forecasting, labor scheduling, and labor management and budgeting
capabilities optimize both daily internal operations and corporate-driven tasks at a store.
For example, based on a predefined set of actions that are triggered as a result of the
latest sales and operations results, a corporate office can send instant alerts to a store
manager’s mobile device, instructing the manager to take an action, such as executing a
new directive, initiate a corrective action, or follow an updated schedule that is based on
the latest labor forecasts and budget. Store managers can in turn instruct store associates
in real time to follow these directives and actions, interacting directly with the associates
over their mobile devices. These directives and actions can then be executed
immediately.
Store managers can instantly request a certain number of associates to end their shifts
early or work overtime, sending the requests directly to the associates’ mobile devices.
These requests can be tracked, monitored, and sent to a corporate office in real time.
This capability gives the corporate office tighter control over the labor budgeting,
forecasting, and scheduling process, thus providing the ability to react quickly to changes
in market conditions.
6.2.1.3 Time and Attendance Tracking
Automated and self-service tools available over mobile and wireless networks enable
associates to perform schedule-related and administrative activities using in-store mobile
devices without supervision.
For example, associates can immediately access time and attendance tools loaded on in-
store mobile devices simply by logging in using their assigned associate numbers. They
can then clock in and out for shifts and breaks, change shift assignments, or check hour
balances. These actions and requests can then be forwarded to and updated on a store
manager’s mobile device for immediate review and approval. Having access to this
information in real time allows store managers to respond appropriately to requests in a
timely manner and address discrepancies in store associates’ time and attendance records
and information. Associates with NFC-enabled devices can also tap readers to access
secure areas, track time spent in a specific area, and perform security checks.
6.2.2 Technology and Standards Employed
The technology and standards used by a mobile workforce management solution can
vary, based on the solution vendor of choice; regardless of the vendor, the following key
areas merit consideration:
• Central management platform
• Technology used to connect to the workforce management solution
• Data integrity and accuracy
The central management platform serves as the central management system and connects
all clients (typically mobile devices and thin clients) to the workforce management
solution hosted at a central location (i.e., a corporate office or a third-party solution
provider). The central management platform is therefore the connection between the
store and the headquarters. It is typically set up and delivered through a SaaS model.
This platform typically provides a single Web-based portal for all service requests,
mobile device management, and monitoring services (see Figure 58, above).
People should be able to authenticate, connect, and interact with the workforce
management solution using several media supported by different technologies, such as
mobile devices (cell phones, two-way radios), biometric readers, NFC-enabled devices,
and location-based GPS devices. The services may also be available through
downloadable applications (iPhone, Blackberry, Droid), SMS messages, interactive voice
recorders, and e-mail. Appropriate security measures should be put in place to ensure
that communication between mobile devices cannot be compromised and that the data
exchanged is accurate and protected.
Two ARTS standards are applicable to this area: the Workforce Management XML
Schema and the Time Punches XML Schema (for more information about these
standards, see Section 8.3.5).
6.2.3 Benefits and ROI
Using the appropriate mobile technology solutions in conjunction with an existing
corporate workforce management platform can help retailers obtain better control of and
optimize their workforces across the entire enterprise.
The appropriate use of mobile technology can streamline communications and coordinate
planning. Store managers can have direct and frequent contact with corporate
headquarters and be involved in specific workforce planning functions (such as labor
forecasting, scheduling, and management). Managers can also ensure that their
workforces and tasks are aligned and prioritized appropriately without being tethered to
their desks. Store associates can communicate, collaborate, and coordinate with each
other and with store managers from multiple locations within the store. Having an
integrated communication channel and clear visibility into the entire workforce allows
store managers and associates to make their daily workforce management operations
more efficient. They can collaborate more effectively and make better decisions, which in
turn will improve customer service.
The use of mobile devices can also optimize labor scheduling. Assignments and
schedules based on local labor laws, store patterns, corporate directives, and associate
availability, skills, and work preferences can be delivered directly to both store managers
and associates. In addition, store managers using mobile devices can monitor key
performance indicators (KPIs), payrolls (i.e., timesheet approval), and overtime in real
time. By utilizing mobile workforce management devices and tools to optimize labor
scheduling, retailers can ensure that they have the right mixture of labor to complete both
corporate-driven tasks and daily operational tasks while meeting target customer service
levels. Store managers can interact in real time with associates from multiple locations
within a store (for example, to approve requests for time off).
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Mobile Retailing Blueprint
When time and attendance tracking is closely integrated with labor schedule solutions,
retailers have tighter control of associates’ schedules and can ensure compliance with
rules and regulations. Providing associates with access to mobile self-service workforce
management tools that integrate labor scheduling and time and attendance solutions
enable them to perform activities that are normally performed by store managers (i.e.,
work-hour tracking, punch-in/punch-out, vacation lookup, shift switching) from multiple
locations within the store, while ensuring that the associates comply with local labor laws
(i.e., work hours and overtime).
6.2.4 Implementation Considerations
Retailers should consider the following when implementing a workforce management
solution:
• Establish a workforce management process that is sustainable and focused on
execution and operational excellence across the entire retail enterprise.
• Ensure that the mobile workforce management solution can interface and
integrate with other information sources and solutions within the store (i.e., POS,
inventory system) and at headquarters (i.e., CRM, ERP, SCM).
• Select a solution that conforms to standards (i.e., ARTS, GS1) and incorporates
both SOA and a cloud-based architecture. Such a solution minimizes the
integration effort and maximizes interoperability with other solutions across the
entire enterprise.
• Evaluate ROI in terms of time to deploy and total cost of ownership.
exists as part of the back office, a browser-based application optimized for the mobile
devices deployed in the organization is most likely to be the simplest and cheapest
approach. However, if a large amount of information must be presented in order to
adequately represent an order/bill/transfer/purchase, a downloaded application is
probably a better, although more costly, approach.
Technology
Business Scenario Browser‐ Downloaded SMS Voice Wi‐Fi NFC Imaging GPS
Based Application MMS Bluetooth Bar
Code
Advertising & X X X X X X X
Marketing
Customer Service X X X X X
Shopping Tools X X X X X X X X
Product Information X X X X
Loyalty X X X X
Promotions & X X X X X
Coupons
Mobile Store X X X X X X
Mobile Remote X X X X X
Payment
Mobile Contactless X X X X X
Payment
Mobile Point of X X X X
Service
Warehouse X X X X X
Management
Workforce X X X
Management
Shelf Stocking X X X X
Internal X X X
Communication
Technology
Business Scenario Browser‐ Downloaded SMS Voice Wi‐Fi NFC Imaging GPS
Based Application MMS Bluetooth Bar
Code
Inventory Control X X X X
Price Verification X X X X X
Mobile Approvals X X X X
Table 30: Phone Operating Systems and the Associated Programming Languages
Operating System Programming Language
iPhone OS Objective‐C
Android Java
(several versions)
Symbian C
Development for each of these operating systems requires not only knowledge of
different programming languages but also a strong understanding of the underlying
environment. For instance, BlackBerry devices are known to run a number of different
versions of the BlackBerry operating system, which are not all compatible with each
other. Similarly, Android’s operating system can include different vendor-specific
extensions that cause additional fragmentation.
This fragmentation is only expected to increase as new iterations of the hardware and
software platforms introduce features that are not backwardly compatible across all
devices. A good example of such fragmentation is the multitasking capabilities of the
iPhone OS 4.0, which will be supported by the iPhone 4G and the iPhone 3GS but not the
older iPhone 3G.
Including support for low-end mobile phones capable of running applications written in
J2ME and Brew will lead to even further fragmentation, due to the vastly different device
profiles and packages. In the J2ME world, a device can be CLDC 1.0-, CLDC 1.1-, or
CLDC 1.2-compliant as well as MDIP 2.0- and MIDP 2.1-compliant. The first profile
describes the device connection capabilities, and the second profile describes its
multimedia capabilities. In addition, each vendor has been free to include an arbitrary
number of Java specification requests and, in some cases, even their own proprietary
extensions to the J2ME environment.
Mobile gaming companies (who must support a large variety of mobile phones) estimate
that they spend 20 percent of their research and development budget creating a mobile
game and 80 percent of the budget porting the game to different handsets. This figure is
for “smart” game developers who have outsourced their porting to Eastern European
software developers specializing in porting mobile applications.
Not only will retailers have to deal with fragmentation of the software platform, the
capabilities of different mobile device hardware can vary greatly. For example, high-end
smartphones are often equipped with GPS and high resolution cameras, whereas lower
end smartphones tend not to have GPS functionality and only include a low resolution
camera. If a retailer decides to use these features, additional restrictions are imposed.
47
Mobile Marketing Association, U.S. Consumer Best Practices Guidelines for Cross-Carrier Mobile Content
Programs , version 5.1( May 2010), http://www.mmaglobal.com/bestpractices.pdf.
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Mobile Retailing Blueprint
and transparent as necessary. Finally, a retailer must ensure that security and privacy
measures are appropriate for meeting industry security requirements, including end-to-
end encryption and strong authentication.
7.2.1 Mobile Governance
When a retailer initially begins implementing mobile services, it is important for the
entire organization to have a common understanding of and set of practices that govern
communication in the mobile channel. The mobile channel is the most personal way for a
retailer to communicate with customers. Great care should be taken to ensure that all
communication is relevant and that every message is appropriately personalized and
targeted to the individual customer.
By expanding the general IT governance policy to include a dedicated section describing
mobile governance, the retailer will be in a good position to ensure that all mobile
initiatives are in compliance with corporate values. The mobile governance section
should at the very least include the following:
• How outbound messages are aligned, to ensure that different parts of the
organization are able to coordinate their communication initiatives.
It is very important to ensure that messages sent to the customers are not
considered unsolicited messages.
• Which integration points must be covered to ensure an appropriate level of
transparency for transactions in the mobile channel.
One of the current challenges, especially with messaging-based communication,
is the absence of transaction transparency and the limited visibility afforded by
wireless carriers and mobile aggregators. A retailer should address this challenge
by ensuring adequate integration with key systems.
• What level of detail is required to establish an appropriate audit and billing trail
for mobile services.
The retailer should evaluate the level of detail required for audit and billing
records. The appropriate level of detail may vary, depending on the types of
mobile services that are launched. For example, a mobile service that includes a
mobile payment component will require much greater detail than a notification
service.
• What measures are required to deal with the “natural” delivery uncertainty of the
mobile channel.
The mobile channel is by nature a wireless channel and therefore prone to
interference from outside sources, which will inevitably lead to performance
degradation. This issue is even more critical for asynchronous communication
such as messaging; messages can be lost or delayed in transmission. The retailer
should therefore consider technical or procedural safeguards to ensure a
satisfactory level of service. As for all communication in the mobile channel,
these safeguards should be customized based on the customer’s profile. That is, a
different procedure should be invoked for a “gold” level customer than for a
customer with an unknown track record.
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Mobile initiatives today are often launched either by marketing or sales units without
coordination with other parts of an organization, such as IT. The mobile application for a
particular initiative is generally developed and hosted by a specialized third-party
software developer, who may understand mobility but may not be as conversant with
enterprise software. While this approach can allow a retailer to launch mobile services
quickly, it can also lead to “siloed” applications that do not communicate or share data
appropriately. Data for the same customer (although typically with slightly varying
profile data) can be present simultaneously in multiple applications that do not reference
each other properly. This situation leads to an increased total cost of ownership (TCO)
for each application and degradation of the user experience. The increased TCO often
results in a poor service level agreement (SLA) between the business unit and the IT unit
for mobile services, because the service is not properly integrated with core IT systems
such as surveillance and monitoring. In addition, mobile applications rarely comply with
established change-management procedures, thereby limiting IT control, increasing
coordination requirements, and resulting in higher maintenance costs.
As part of a mobile governance policy, retailers should seek to evaluate the
organizational impact of launching mobile services and ensure that all relevant parts of
the organization are adequately informed. Guidelines should also be established for
working with third-party mobile specialists. These guidelines should include integration
and hosting requirements to ensure compliance with the retailer’s standard procedures,
such as change management controls.
7.2.2 Achieving Control of the Mobile Channel
The technical responses to an established mobile governance policy should establish
central solutions for mobilizing core business processes that are designed to overcome the
challenges listed above and ensure that mobile services comply with defined policies and
quality standards based on best practices.
Like other critical IT systems, such as a retailer’s e-commerce platform, mobile services
may benefit from being launched on a central piece of infrastructure dedicated to dealing
with the mobile channel. This infrastructure component should provide high availability
through appropriate redundancy and serve as the central integration point to other core IT
systems for general requirements such as providing transaction transparency and creating
audit and billing records with the required level of detail. Figure 62 illustrates how
mobile applications can use centralized middleware to provide high availability and
generalized integration.
48
Mobile Marketing Association, op. cit.
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Mobile Retailing Blueprint
applications, the best practices described provide an excellent set of privacy guidelines
for retailers:
• The customer must actively opt into push services. Push services include
notifications, alerts, and other types of subscription-based services.
• The customer should always be provided with a simple way to opt out of a
service. Sending an SMS message with the word “STOP” is a good example of a
simple approach.
• The retailer should notify the customer in advance before charging the customer
for renewing a subscription. The notification should include the cost of renewing
the subscription as well as information detailing how to decline the renewal.
Other authorities within the mobile sphere, such as Apple, have adopted a similar
approach to approving mobile applications before offering them to users, and the retailer
should try to apply the guidelines listed above to all types of mobile applications
7.2.3.2 Authentication
The mobile phone provides a convenient way to enhance authentication processes to use
two-factor authentication (2FA). The retailer may automatically determine the customer’s
mobile number (MSISDN) through integration with wireless carrier networks or mobile
aggregators. The MSISDN provides the first authentication factor: something you have.
(Other alternatives are also possible, such as issuing certificates to the customer’s mobile
phone.) By using the mobile number to identify the customer and combining it with a
second factor, something you know (such as a password), the retailer can offer 2FA.
The following two guidelines are therefore critical to implementing authentication:
• Authenticate the user, not just the device.
• Restrict access to a service to the user’s device.
A number of off-the-shelf solutions are already available from vendors specializing in
providing 2FA in the mobile channel. The approaches differ from vendor to vendor.
Some base their solutions on wireless public key infrastructure (WPKI), based on the
SIM card, while others provide a solution that is implemented in Java, Objective-C, or
another programming language and that therefore resides in the phone’s application layer.
Each approach has its pros and cons; a retailer should carefully evaluate which approach
provides the best solution for the retailer’s needs.
Finally, mobile technology can be applied within the retailer’s own organization to
enhance authentication procedures, such as logging on to a virtual private network or
accessing data that is considered business sensitive.
7.2.3.3 Security
The different mobile-payment-related organizations have already done a lot of work on
security. In general, encryption technologies such as SSL or TLS are considered adequate
for securing data while it is being transmitted. All transmitted data are further encrypted
by standard network technology standards, such as GSM and CDMA. For applications
that incorporate mobile contactless payment functionality, the TSM, in cooperation with
the MNO and the issuer (who could be a retailer in the case of retail-branded or retail-
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preserved.
Mobile Retailing Blueprint
owned payment cards), will address concerns related to secure storage of a customer’s
payment details on the mobile phone. The mobile contactless payment transaction is
processed through the retail POS system in the same way as any other contactless
payment transaction, using the currently implemented POS security features.
For other retail-specific applications that contain or transmit sensitive data, the retailer
should apply standard security practices, including end-to-end encryption principles
based on standard encryption schemes such as PKI, SSL, and TLS.
8. MOBILE STANDARDS
To achieve universal consumer acceptance, mobile processing must be global. What
works in the United States must also work in Asia, the Pacific, and EMEA. The only
way to ensure this interoperability is to adopt global standards. Fortunately, many
organizations are already working to develop and promote these necessary standards
(many of whom are partners in preparing this document).
Some standards organizations define how technology should be enabled. Other
organizations define specifications that ensure the security of payment transactions. The
entities involved must address challenges that include determining an appropriate method
for testing individual mobile phone handsets and secure elements and resolving lifecycle
issues.
Numerous standards bodies are involved in mobile contactless payment operations.
Figure 63 identifies which standards body is responsible for standards that are applicable
to particular pieces of hardware and software.
Key to making mobile contactless payments work is the ability to provision the players
with the appropriate components. Figure 64 shows which standards bodies are involved
in the provisioning effort.
All standards organizations are interested in increasing the ease of access, global
interoperability, and security of mobile payment technology for consumers. For example,
for every payment network, someone is responsible for certifying the applications on the
network. Table 31 summarizes the responsibilities of the individual standardization and
specification organizations that play a role in current mobile payment implementations.
Area of Responsibility
Organization Responsibility
Mobile Other Payment
Handset Functions Applications
Area of Responsibility
Organization Responsibility
Mobile Other Payment
Handset Functions Applications
Network Range
Frequency Bit rate Set-up time
Type (m)
Network Range
Frequency Bit rate Set-up time
Type (m)
NFC Point-to-point < 0.2 13.56 MHz 424 kbit/s < 0.1 s
8.1.1.1 Wi-Fi
Wi-Fi is a network technology based on IEEE standard 802.11 that enables secure,
reliable wireless connectivity to a local network and to the Internet. Wi-Fi is supported
by the Wi-Fi Alliance, which is a global non-profit association.
Wi-Fi is widely adopted and is installed on many personal computers and smartphones.
It is the infrastructure on which many wireless networks are based.
8.1.1.2 ZigBee
ZigBee is an open, global-standard wireless networking protocol based on IEEE standard
802.145.4 for small, lower power digital radios, which also applies to sensors and control
devices. ZigBee is a collaborative effort by a global consortium of companies in the
ZigBee Alliance.
One of ZigBee’s key features is the ability to locate an object and identify how far away
it is. ZigBee is secure, low cost, and quick and easy to deploy. Other key features
include:
• A low duty-cycle, which provides long battery life
• Low latency
• Direct sequence spread spectrum (DSSS) modulation
• Support for up to 65,000 nodes per network
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Mobile Retailing Blueprint
49
http://www.nfc-forum.org.
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Mobile Retailing Blueprint
ISO/IEC 7816 is an international standard with 14 parts. ISO/IEC 7816 Parts 1, 2, 3 and
12 deal with contact smart cards only and define various aspects of the card and its
interfaces, including the card’s physical dimensions, the electrical interface, and the
communications protocols. ISO/IEC 7816 Parts 4, 5, 6, 7, 8, 9, 11, 13, and 14 are
relevant for all types of smart cards (contact as well as contactless).
Each payment type has its own standards and specifications and its own certification
requirements. The NFC Forum and Smart Card Alliance partners in developing this
blueprint can provide more information.
architecture, ARTS created an SOA blueprint, 50 the goal of which was to provide retail-
specific ideas for successful implementation of SOA in the retail segment.
8.3.2 Cloud Computing Blueprint
While SOA identifies the services required to perform specific functions, so-called cloud
computing provides the cost effective infrastructure needed to run those services (Figure
69). The consolidation of information required to execute retail planning, acquisition,
moving, and selling activities effectively requires significant computing capability. The
cloud can provide these services as elastic resources that can be used in current or new
applications, in a wide variety of application types, and by all types and sizes of
organizations and companies. ARTS created the ARTS Cloud Computing for Retail white
paper, 51 similar to the SOA blueprint, to explain the technology from a retailer’s
perspective.
ARTS provides standardized messages to communicate between the various SOA
services located in the cloud computing environment.
50
Association for Retail Technology Standards, SOA Blueprint for Retail, Version 1.1, July 4, 2008.
51
Association for Retail Technology Standards, Cloud Computing for Retail” Version 1.0.0, Decl 12, 2009.
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Mobile Retailing Blueprint
relational model that describes retail business functions and the retail process. It serves
as a guide for retail IT support, a database design for new applications, and a repository
for data storage.
8.3.4 ARTS UnifiedPOS
The ARTS Unified Point of Service (UnifiedPOS) is a standard APIspecification that is
platform independent (language and operating system neutral) for connecting 35 POS
devices, such as scanners, magnetic card readers, and printers, to POS terminals. New
devices required to connect mobile phones to POS are or will be included in UnifiedPOS.
The API specification is intended to enable interoperability between standard applications
and standard devices from multiple providers. The specification defines an architecture
for application interfaces to retail devices and a set of retail device behaviors sufficient to
support a range of POS solutions.
8.3.5 ARTS XML
The ARTS XML was created in 1999 to develop and maintain standard XML schemas
based on the structures and data elements within the ARTS data model to integrate
applications within a retail enterprise. There are 18 schemas in the ARTS inventory; the
following schemas are relevant to mobile retail:
• POSLog enables rapid integration with POS applications. Retailers planning to
implement mobile payment, coupons, and discounts will find that POSlog is a
required standard.
• Digital Receipt was recently updated to display receipts on mobile devices and
contain additional data.
• Payment defines payment as a service; it can now be removed from the POS
application, making it easier to use on mobile devices and still comply with PCI.
• Retail Transaction Interface defines services for ease of integration with POS and
allows multiple services/applications to use a common set of business rules.
• Product Content Management (PCM) supports the communication of images
(digital assets) between manufactures and retailers or any parties.
• Stored Value is a set of XML messages that support debit/gift cards, purchase,
redeem, recharge, and similar functions.
• Time-punch defines data messages to support recording associate work time, log
in, change assignments, log out, and similar functions.
• Associate Management identifies employees and records all relevant information,
including profiles and employment histories.
• Inventory tracks inventory by item by physical location, with all levels of
summary available
• Item Maintenance defines information about products from unique item (EPC) to
summary categories (styles and SKUs). Retailers planning to scan a bar code and
display product information will want to investigate the Item schema.
More information about ARTS standards is available at www.nrf-arts.org.
8.4 GS1
GS1 US is a not-for-profit global standards organization that assigns and manages
standard identification numbers to identify products, cartons, locations, and other entities.
These numbers are usually represented as the familiar bar code or electronic tag called an
EPC. GS1 standards enable the unique identification of products, services, locations,
logistics, and assets in the business-to-business community around the world. ARTS
partners with GS1 US to ensure that GS1 standards are included in ARTS business and
technical guidelines. 52
GS1 has recently launched an initiative to provide the B2C ecosystem of access to trusted
product data on entry of a GTIN.
52
For information on GS1 Identification Numbers, see
http://barcodes.gs1us.org/dnn_bcec/Standards/IdentificationNumbers/tabid/81/Default.aspx
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1-D bar code Linear (one-dimensional) bar code representation of data as widths (lines)
and spacing of parallel lines, such as a product’s universal product code.
2-D bar code Two-dimensional bar code representation of data in a geometric pattern
that is easy for mobile cameras to read. QR-Codes, GS-1 2D, and AZTEC
are 2-D bar codes.
2FA See two-factor authentication.
ACH Automated Clearing House
aggregator Entity that can aggregate messaging services between mobile network
operators and the retailer (for example, Open Market or mBlox).
API application programming interface
application (app) Small, dedicated-purpose software program designed to help a user
perform one or more specific tasks.
BI business intelligence
Bluetooth Proprietary open wireless technology standard for exchanging data over
short distances (using short length radio waves) from fixed and mobile
devices. Bluetooth can connect several devices, overcoming problems of
synchronization.
BREW Application development platform created by Qualcomm that can
download and run small programs for playing games, sending messages,
sharing photos, and the like. Application developers who use BREW can
easily port their applications between all Qualcomm devices.
browser-based Application that is hosted in a browser-controlled environment (e.g., a Java
application applet) or coded in a browser-supported language (such as JavaScript,
combined with a browser-rendered markup language like HTML) and that
relies on a Web browser to render the application executable.
CLDC connected limited device configuration
cell phone See mobile phone.
cloud computing Internet-based computing, whereby shared resources, software, and
information are provided to computers and other devices on demand, as is
the case with electricity and the electricity grid. These resources are
sometimes referred to as the cloud.
common short code A 3-7 digit “phone-number” used by companies to send and receive SMS
(CSC) and MMS messages that enable a simple action across multiple carriers in
a given geographic area. Common short codes are also known as short
codes and short numbers.
CRM customer relationship management
CSC See common short code.
CSS cascading style sheet
EMEA Europe, the Middle East, and Africa
Term Definition
EMV Standard for interoperation of chip cards (cards with an integrated circuit,
or IC) with IC-capable POS terminals and ATMs for authenticating credit
and debit card transactions. The EMV standard defines the interaction at
the physical, electrical, data, and application levels between IC cards and
IC card-processing devices for financial transactions.
ERP enterprise resource planning
ESB enterprise service bus
feature phone A low-end mobile phone that has less computing ability than a
smartphone; sometimes referred to as "dumb phones." Feature phones
can often run simple applications based on Java or BREW.
geofence Virtual boundary for a real-world geographic area. When a location-aware
device (such as a phone equipped with GPS) enters or exits a geofence,
the device receives a notification.
gift registry Mechanism for requesting items from others on special occasions, such as
weddings, graduations, and similar celebrations. The list compiler does not
intend to purchase these items but wants others to do so.
GPS global positioning system
GUI graphical user interface
handset On a telephone, the device the user holds to the ear to hear audio. Modern
handsets typically contain a microphone as well; in early telephones the
microphone was mounted on the phone itself, which often was attached to
a wall at a convenient height for talking. Handsets on such phones were
called receivers, a term often applied to modern handsets. On a mobile
phone, the entire unit is a radio transceiver that communicates through a
remote base station and is referred to as a handset.
high availability A system design protocol and associated implementation that ensures a
certain degree of operational continuity during a given measurement
period. Availability refers to the ability of the user community to access the
system, whether to submit new work, update or alter existing work, or
collect the results of previous work.
HTML, HTML5 hypertext markup language, hyper-text markup language version 5
HTTP hypertext transfer protocol
HTTPS hypertext transfer protocol secure
IMAP Internet message access protocol
IVR interactive voice response
Java Programming language that is not operating–system dependent. Java
applications can in theory be run anywhere.
JavaScript Object Lightweight, text-based open standard designed for human readable data
Notation (JSON) interchange derived from the JavaScript programming language.
Java specification Formal document that describes proposed specifications and technologies
request (JSR) for adding to the Java platform.
JME, J2ME Java Micro Edition
JSON See JavaScript Object Notation.
JSR See Java specification request.
KPI key performance indicator
LBS See location based services.
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Term Definition
location based services Feature that relies on knowing the approximate location of a mobile device.
(LBS)
m-commerce The full shopping experience on a mobile device, including product
selection, shopping basket, payment, checkout, and transfer of product or
service from retailer to consumer.
MEF mobile enterprise framework
MIDP mobile information device profile
microSD card Small, removable memory card commonly used in mobile phones, portable
media players, and other handheld devices. See also SD card.
MNO mobile network operator
MMS See multimedia messaging service.
MO mobile originated
mobile device Handheld wireless, portable device such as a media player, mobile phone,
e-reader, or tablet.
mobile marketing Set of practices that enables organizations to communicate and engage
interactively with an audience through any mobile device or mobile
network.
mobile operations Business process or transaction carried out using a mobile device. The
device must be capable of receiving a custom application developed by the
retailer.
mobile network operator Telephone company that provides services to mobile phone subscribers.
(MNO) MNOs are also referred to as mobile phone operators and cellular
companies, among other synonyms.
mobile payment Payment for goods or services initiated from a mobile phone or similar
device, such as a personal digital assistant or smartphone.
mobile phone (cell Handheld device connected to a mobile network operator that can make
phone) and receive calls and send and receive messages. Different mobile
phones can have different capabilities. See also smartphone and feature
phone.
mobile retail Use of a mobile device for the purpose of performing retail business
processes as a customer, an associate, or a business partner.
mobile wallet An electronic wallet that is stored on a phone. A mobile wallet can be
thought of as a data repository that holds enough consumer data to
facilitate a financial transaction from a mobile handset, and the intelligence
required to translate an instruction from a consumer into a message that a
financial institution can use to debit or credit bank accounts or other
payment instruments.
mobile Web application Web site that has been revamped to accommodate the limited screen size
available on a mobile device.
MSISDN Mobile Subscriber Integrated Services Digital Network Number
MT mobile terminated
Multimedia Messaging Standard way to exchange multimedia messages with a mobile phone.
Service (MMS) MMS extends the core ability of SMS and is most often used to send
photographs, for example.
Term Definition
native application Application written for a specific operating system that does not run within a
browser. Native applications typically contain more features and are able
to use a platform’s many capabilities.
NFC Near Field Communication
Objective-C Reflective, object-oriented programming language that adds Smalltalk-style
messaging to the C programming language. Used primarily on Apple's
Mac OS X and iPhone OS.
operating system (OS) The software on a computer that manages the way different programs use
the computer’s hardware and regulates the ways that a user controls the
computer. The combination of the operating system, the hardware
architecture, and other components (such as the user interface) is often
referred to as a platform.
OS See operating system.
OTA over the air
PCI payment card industry
PKI See public key infrastructure.
Plain Old XML (POX) Term used to describe basic XML as opposed to complicated, multilayered
XML specifications such as those that define Web services.
platform See operating system.
POS point of sale
POX See Plain Old XML.
PSMS premium billing SMS
PSP payment service provider
public key infrastructure Hardware, software, people, policies, and procedures used to create,
(PKI) manage, distribute, use, store, and revoke digital certificates that address
the problem of protecting private information that must be transmitted
publically.
QR code Matrix code (or 2-D bar code) created by Japanese corporation Denso-
Wave in 1994. The "QR" stands for "quick response," as the creator
intended the code to be decoded at high speed.
QR codes are common in Japan, where they are currently the most
popular type of two-dimensional codes. Most current Japanese mobile
phones can read this code with their cameras.
REST Lightweight request/response architecture that leverages HTTP methods.
RF radio frequency
RFID radio frequency identification
SaaS See software-as-a-service.
SD card Non-volatile memory card format developed by Panasonic, SanDisk, and
Toshiba for use in portable devices. It is widely used in digital cameras,
digital camcorders, handheld computers, netbook computers, PDAs,
media players, mobile phones, GPS receivers, and video games.
secure element Storage location in a mobile phone for information that needs robust
protection, such as information authenticating the identity of a payer.
There is no consensus on where the secure element should reside;
candidates include a SIM card, a secure memory card, an embedded
smart card chip, or an external device attached to the phone.
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Term Definition
service oriented Flexible set of design principles applicable to systems development and
architecture (SOA) integration. A deployed SOA-based architecture provides a loosely-
integrated suite of services that can be used within multiple business
domains.
shopping list List of items needed to be purchased by a shopper. Shopping lists are
typically not shared, but are intended strictly for the shopper’s personal
use.
short code See common short code.
Short Message Service Communication service that allows the exchange of short text messages
(SMS) on a mobile device. The term SMS is often used as a synonym for all types
of short text messaging.
short number See common short code.
SIM subscriber identity module
SOA See service-oriented architecture.
smart card A pocket-sized card (or other form factor) with an embedded integrated
circuit that can be either a secure microcontroller or equivalent intelligence
with internal memory or a memory chip alone. The card connects to a
reader with direct physical contact or with a remote contactless radio
frequency interface.
smartphone Mobile phone that can handle data as well as voice signals. Smartphones
offer advanced computing ability and connectivity, allowing the user to
install and run more advanced applications based on a specific platform.
Smartphones run complete operating system software, providing a
platform for application developers.
smart poster Posters, collateral, advertisements, or similar materials that include a small
and inexpensive NFC tag that can contain information or a link to a Web
site that an NFC-enabled phone can read by touching.
SMS See short message service.
SOAP (Simple Object Protocol specification for exchanging structured information in the
Access Protocol) implementation of Web services in computer networks. SOAP relies on
XML as its message format.
social media A group of Internet-based applications that build on the ideological and
technological foundations of Web 2.0, and allow the creation and
exchange of user-generated content (for example, Facebook).
software-as-a-service Software that is deployed over the internet and/or is deployed to run behind
(SaaS) a firewall in your local area network or on personal computer. With SaaS, a
provider licenses an application to customers as a service on demand,
through a subscription or a “pay-as-you-go” model.
SSL Secure Socket Layer
tablet Complete computer contained entirely in a flat touch-screen that uses a
stylus, digital pen, or fingertip as an input device instead of a keyboard or
mouse.
TLS transport layer security
triangulation Process of determining the location of a point by measuring angles to it
from known points at either end of a fixed baseline, rather than measuring
distances to the point directly.
Term Definition
trusted service manager Entity who securely distributes and manages a service provider’s services
(TSM) to the mobile network operator’s customer base. The trusted service
manager provides the single point of contact for service providers to
access their customers, and also performs life-cycle management services
for NFC applications.
TSM See trusted service manager.
two-factor authentication Use of any two of the three possible methods to authenticate that an
(2FA) individual is who the individual claims to be. The three possible methods
are something an individual knows (a secret, such as a PIN), something
the individual has (a possession, such as a passport), or something unique
to the individual’s physical makeup, such as a fingerprint (referred to as
something the individual is ).
UICC universal integrated circuit card
Unstructured Mobile phone capability generally used for mobile banking in developing
Supplementary Service countries where WAP is unavailable. In most countries, WAP is used for
Data (USSD) mobile banking and now mobile payment
UPC Universal Product Code
USSD See Unstructured Supplementary Service Data.
WAP wireless application protocol
WCSS wireless application protocol cascading style sheet
WebKit A layout engine designed to allow Web browsers to render Web pages.
The engine provides tools to display web content in windows and
implements browser features such as following links when clicked by the
user, managing a back-forward list, and managing a history of pages
recently visited.
Web template Tool used to separate content from presentation in Web design and for the
mass production of Web documents. Web templates can be used by any
individual or organization to set up a Web site.
Wish list List of items that the list compiler would like to purchase if possible. Wish
lists can be shared with others.
WPKI wireless public key infrastructure
XHTML extensible hypertext markup language