A New Wireless Registry for 50 Billion Things

When Cisco’s CEO, John Chambers, took the stage at CES in Vegas this year and announced that there was a difference between The Internet of Things (IOT) and the Internet of Everything (IOE), many cried “semantics”. But there is a difference and one that ripped across the US to the National Retailer Federation (NRF) Big Show at the Javits Centre in New York.

IOT, according to Chambers, is made up of billions of connected objects; however, IOE are the smart networks that are required to support all the data these objects generate and transmit.  What will help move the IOT into the IOE and drive what Chambers predicts to be a $19 trillion in new revenue by 2020?

IOE requires a universal solution to tie the billions of sensor data into an intelligent device and system agnostic solution.

To our detriment, we are so focused on the idea of a hardware (IOT) solving all our problems that we neglected that simple insight that all these hardware solutions require a method of managing the people and service behind them.

The industry needs a wireless domain (DNS) naming solution that can provide profile, tools and privacy controls to enterprise and the consumer.

When I was invited to sit on a panel at the launch of the new wireless registry (www.wirelessregistry.com) at the NRF show and I realized that this registry could be the silver-bullet platform.

50 Billion Things

When Cisco, Qualcomm, IBM and other set up shop at NRF to talk retail, the IOT verse IOE discussion continued.  Brand agencies such as Ogilvy were pitching a solution using Qualcomm’s wireless Gimbel platform to solve retail engagement in the store. Qualcomm’s Gimbel platform is essentially an IOE riding on Apple’s IOT’s iBeacons? Mobile Location Analytics (MLAs) companies that collect consumer behavioural analytics, are a big data IOE play riding on the IOT emitting from the phone and anchored to its MAC address

There are a proliferation of IOE solutions using different technology that require different CAPEX and resources.

Presently there are an estimated 10 billion sensors globally. This is predicted to grow to 50 billion sensors by 2020. Imagine the wireless noise we can anticipate as we move from city to city, street to street, aisle to aisle.

There are barriers everywhere:

  • On the consumer side we have option paralysis but more importantly simple human inertia.
  • On the retailer and brand side we have incumbent investments and IT budgets to navigate.
  • On top of all this stasis we have the DC beltway privacy folk crying “do-not-track”.

How will the consumer navigate this noise? How will the retailer, brand, entertainment provider select from the exploding list of vendors selling various solutions using LTE identification, WiFi MAC identification, Bluetooth MAC, IMEI, etc.

My Wireless Name

The phone in 2014 is becoming less of a Cracker Jack container that acts as a repository of millions of sundry apps, and more of an intelligent device that performs as a server that can manage our world through smart profiling and APIs.

Think about it. We have been hoodwinked by the OEMs to believe that an application store tethered to a phone can deliver any service, entertainment, widget. The app store was a marketplace to the world: clocks, measuring tapes, cash registers, coupon dispensers, shopping lists, ad infinitum.

Google’s acquisition of Nest is good example of the changing landscape where the app will live in the IOT and the device will simply be the profile and the auto-controller. The 94Fifty smart basketball, the Sensible Baby smart sensor monitor, the remote Vibeasy vibrator: all use the phone as the remote control manager.

A service such as The Wireless Registry can offer a naming protocol that can work agnostically with all the in-market sensor solutions and offer a central repository for a retailer, brand, and entertainment provider’s identity. Any existing wireless signal (SSID) that a coffee shop or a big-box retail transmits can now have a name (Starbucks, GAP, Walmart) with an accompanying sophisticated profile. A consumer that has a phone, tablet and PC can now attach a personal name and wireless profile to their MAC addresses.

When the retail and consumer wireless signals bump in the proximal world, the consumer profile can do a simple look up can see what offers, services, commerce is available to them based on their specific identity. The consumer can also block unwanted solicitation answering Jules Polonetsky and the Privacy Commission’s concerns around “do-not-track”.

Now the consumer is in full control of their identity and the phone becomes an intelligent server interacting with the world of wireless signals based on that consumer preferences.

While this solution can interface with existing apps on the phone, ultimately the profile and preferences can be baked into the OS as part of the devices DNA.

Until later. Yours truly from my MAC address aka “MOBILEGUY

Mall Busting with Wal-Mart, Facebook & Zappos

Samsung strikes a deal with the beleaguered Best Buy to subsidize their rent with a store-in-a-store initiative. Borders exits the mall and last-man-standing Barnes & Noble seems to becoming a living room chachka vendor with more book browsers than book buyers. Zappos Labs runs field research in malls and Facebook launches a commerce strategy (again).

Is a retail dust bowl about to blow through the mall nationally? Or is this a digital tempest in a tea cup?

We know that online commerce is booming but it still accounts for a small slice of America’s mall business. Undeniably, this $200 billion digital business (ComScore) is expanding scope daily.

If there was ever a digital demarcator, it is the soap business. When Unilever and P&G, the markets main consumer package goods companies, begin to sell soap on Amazon, and when Wal-Mart begins to ramp up its online business, leveraging its 4,000 stories and 158 warehouses as an online distribution network, then mall property owners possibly need to rethink their role in bricks and mortar.

Inertia as a strategy

Malls are entertainment destinations. Always have been. We go to the mall for a movie or latte just as we bundled the family into the Buick 60 years ago to go shopping. But if Best Buy and Barnes & Noble leave the mall, what is left to attract the consumer? Hours of gizmo browsing and cook-book thumbing gone.

Browse-verse-buy business has whittled way the margins of many stores making Blockbuster and Gamestop digital road kill. It forced Target Chief Executive Gregg Steinhafel and Kathee Tesija, Target’s executive vice president of merchandising to cry uncle on “showrooming” in a memo to its suppliers in 2012.

However, muscling your supplier’s prices down is a pharic victory. Even with the volume sales of Target and Wal-Mart know that they need to move some of their business into the cloud. During Wal-Mart’s August 2013 earnings call it announced that eCommerce sales rose by 30 percent in two trailing quarters. Neil Ashe, Wal-Mart’s CEO indicated its total online sales could pass $10 billion in fiscal year 2014.  This is only two percent of the stores earning and only 12 percent of Amazon which sales totaled $61 billion in 2012 but it is a marked trend and a harbinger of the exodus of earns from the mall.

What incumbent stores presently have in their favor is inertia.  The cloud and the mall are still not fluidly connected. Although each shopper is armed with a mobile computer which has the capability of scanning, sourcing and saving the consumer in every aisle, there are too many hurdles and friction between the idea of digital buying and the products within arms reach.

The mandate of any red blooded digital retailers is to eliminate this inertia.

No-click Cloud Checkout

Apple’s iTunes, Amazon and Paypal built their business on simplifying checkout: making sure that the act of buying does not get in the way of intent to buy.

One-click checkout or combining stored customer credentials with a simple password is the sole reason that these companies continue to grow their market share. Their UX team would tell you that every informational and graphic design is based on optimizing clicks to checkout. Each click makes a precipitous drop off and abandoned shopping carts litter the web.

But digital checkout demands trust and mindshare. Even online real estate barons such as Facebook have been unable to enter this market.  Although “Social” and “commerce” seems natural allies, Facebook has not been able to delivered on its promise to leverage its millions of customers to shop cross-channel.  The company launched Facebook Credits in 2009 and phased them out last year. “F-commerce” experiments abound. Remember Facebook + Amazon + P&G partnering in 2010 to change the world. Unilever followed suit launching a storefront on Facebook for its Dove brand. Retailers including JCPenney and Gamestop have attempted to monetize their Facebook community by opening stores inside the Facebook network. After underwhelming results they shut their virtual doors.

Apple and Amazon have proven that community plus one-click checkout works. These digital wallet holders started their business explicitly to sell stuff. And they are poised to remove the inertia from online shopping and with it the last refuge of the mall owner. Online shopping provides advantages with an endless aisle allowing for access to more sizes and categories. According to Nielson the average basket size is much larger for consumer package goods ($80 online to $30 offline) and beauty purchase ($30 online to $10 offline).

The question is that when the households put soap and diapers on their shopping list will they log into Amazon to buy Dove Body Wash 24 Ounce Bottles (Pack of 4) and Pampers Sensitive Wipes 7x Box?

Baked Beans & Apple Pie

The last refuge of the American mall maybe a can of baked beans and fresh produce. If the household shopper wants to grabs a can for dinner tonight or smell the oranges and squeeze the melons before buying, then off to the store they will go. Grocery stores are big box convenience stores.

However, should mall owners that are grocery-anchored feel safe? Their clientele should come from a weekly shopping list.

Well, hold your Kraft peanut butter!

The traditional grocery retailers are faced with increased competition. In March, Wal-Mart opened grocery concept stores about a tenth of the size of their supercenters. With big box and online retailers entering the grocery space, specialty grocers capturing the “foodie culture” consumer and brands creating direct relationship with the consumer, perhaps this is not a safe bet for mall owners.

Google Wallet, ISIS and other phone wallets promise to make in-store shopping more digitally fluid, but what is the digital wallet never makes it to the mall.  Online grocery shopping has grown five fold over the past eight years to $25 billion. Tablets devices have made shopping more leisurely and couch commerce has accelerated.  With CPGs moving their diaper and detergent business into the mainstream online stores like Amazon, the inertia may soon come from the home.

Poaching People

Since Tesco opened their virtual grocery store on the subway in Seoul, Korea two years ago, scan and shop on-the-go signage has become more common. While it is still a media gimmick, it has the potential of becoming a way of luring the shopper online. In every mall or transit hub America at least one brand has attempted to use the in-mall media to engage with the shopper and move them into their cloud store.

In CNET interviews with Zappos Labs’ (an Amazon-owned online retailer) the Director, Will Young, confesses that his team sits around malls stalking shoppers. Their goal is to emulate these shoppers’ behavior online. Young is asking “How can you make the digital experience feel like the in-store experience?”

Whether they succeed or not, there is no question that malls need to re-evaluate their passive media deals. When a brand buys signage on an ad impression basis but uses this media to poach customers then this signage perhaps should not be sold as an impression but as a “mini-storefront”.

Mall owners nationally are holding strategy sessions to evaluate how technology is affecting their business. These stakeholders need to re-evaluate their real estate assets and start to see media as leasable square footage.

Part Two: Mapping the Mall (to be continued)

SCREEN WARS (Digital Media Forum Keynote 2013)

In Dubai talking to agencies and brands about “digital velcro”. How linking content seamlessly between one screen plus other consumer screen equals a multiple of value for a brand.  20  mins – view here.

Premature Technology Arousal (PTA) in Barcelona

To sum up Mobile World Congress 2013, I will borrow from Peter Marx, head of business development at Qualcomm Labs. Peter talks about a tendency for PTA or (for those in the know) Premature Technology Arousal in the mobile industry.

Much of the MWC 2013 floor area at the new Fira Gran Via venue exhibited PTA or Premature Technology Arousal. Solutions that are excited about being solutions. Solutions that are too early. Solutions that are missing reach and frequency. Things that are just not simple enough to drive adoption.

Even before 70 thousand executives hit the show floor, there were signs of “PTA”. From the Near Field Communications (NFC) show name tags that tried to emulated plastic (but that few used because you still needed to show the plastic) to tapping on Coke dispensers with cloud-base wallets that are many quarters away for mainstream adoption.

Booth after booth in this 1.01 million square feet techno-playground displayed incredible solutions and screens.  But the real story to follow was how each solution quietly added value to a given business ecosystem. There was an invisible hand playing connect the dots. Here are a few examples:

The Invisible Google Hand

Google was almost absent – unlike the MWC of 2011 and 2012 where Google groupies ran from partner booth to partner booth in search of cute Android pins. But Google was most definitely on the floor. This year the company is wisely playing “powered by Google”. They are the dark silent type. Turn left or right in every hall, Android is the fuel this industry is consuming.

The same holds for Qualcomm. They are the chip manufacture that is quietly taking the lion’s share of the revenue on each global handset. (Intel just cannot seem to create a competitive landscape.) Qualcomm Labs is building in consumer identity and credentials onto its “platform” hoping to not only power the connected device but also own the big data behind the user. When Qualcomm demos a vision of a home of the near future, they power many of the moving pieces.

The Samsung Show

While Qualcomm’s chip and Google’s OS were the main stories in Barcelona, another key and not so silent player is Samsung. (So much so that my hotel concierge asked me if I was attending that “Samsung” show that was in town.)  The word that floated above the white new-age Samsung booth was “innovation” but the innovation is not just the 3D camera or the ubiquity of the new S-Pen. The innovation was in their business model connecting their screen across the consumer journey. The 3D camera sells their tablet and television. The S-Pen and its SDK allows for ergonomic continuity across their new tablets and fablets.

Mozilla is other important story in Barcelona. Using the Firefox browser on lower-end ZTE devices to run the camera, map and  . . . oh ya the browser was a definite tech-turn on. Moving the developer and more importantly the consumer out of the (Apple-invented and dominated) app store into the real world super-app is an inevitable step and fundamental to our mobile evolution. The quicker the industry can move away for relying exclusively on industrial design and the app storefront as the sales tool, the faster we will grow.

2014 Screen Wars

The most important leitmotif was the screen. Not only the proliferation of devices with new form factor and appliance, but the realization that it is in the connecting of these screen that the we can accelerate business models. Samsung, ZTE, Motorola, Nokia all address the consumer journey across all screens and throughout their day. Nearly all marketing VPs had spent their last few months and budget trying to tell this consumer story.

Again while many products had indecent “PTA”, the most important insight was not what was happening on the screen but what companies were doing to connect them seamlessly. The new battle ground this year moving into MWC 2014 will be centered around who can best manage big data, wallet credentials and identity between the screens.

Barcelona In Brief: Qualcomm, Samsung & Mozilla (BNN Interview)

Watch here. (6 mins)

Mobile Wallet Wars: Winner is the “Final Foot”

As VISA launches the digital wallet V.me, a “digital wallet” in a bid to be relevant in the proliferation of cloud payment credentials, VISA and other incumbent payment providers should be concerned that in a cloud-based economy, it may lose its position in the market.

Presently VISA owns the lion’s share of credit and debit/prepaid plastic in circulation globally. (VISA 2,400MM vs. MasterCard 1,000MM)

Up-starts such as Square and digital innovators such as Paypal are trying to challenge the status quo and change the way people pay with plastic. Google and Apple continue to disintermediate the card vendors by aggregating large volumes of transactions and pass them back to the banks as “prepaid”  with low interchange fees. All in all, new payment players are looking at the old business hegemony of VISA and MasterCard and going OTT (over-the-top).

It is not about eliminating plastic. And it is not really an issue of whether these plastic holders are going the way of vinyl; but more importantly an issue of the business model behind these card and card credentials. Roles are being commoditized.

Cards are simply a way to store and relay banking credentials to the POS in the store and the POS in the cloud. In the US this is no more than a number that is stored on a magnetic swipe and embossed in the plastic. In the rest of the world this number is housed more securely in a chip. A chip that can be emulated securely in the phone chip (or SIM).

It is unlikely that the costly backend systems in the US and Europe that deal with fraud and regulatory issues will be displaced. And that the 2,400MM VISA cards and the 1,000MM MasterCard that use these systems will disappear. (*)

However, as VISA and MasterCard continue to be the trusted brands on every online and physical store they may find that their margins dipping. As banks try to revamp their mobile banking applications and ATMs to be more relevant to their peripatetic customer, fewer value added fees and services will impact their margins.

The question to ask is who owns the customers relationship because it is ultimately this relationship (the final foot) that they can monetize. The emergence of mobile and card-linked offers is making the point-of-sale systems in the cloud and eventually in the store, the new promotional depots for digital deals and coupons. So called “big data” and value added services will ultimately yield the most profit.

*(In emerging markets, where there little infrastructure, companies like M-Pesa service the unbanked via their mobile phone account. VISA has entered these emerging markets through acquisition of Fundamo and MasterCard through a partnership with Telefónica. Similar to the US, these companies are vying for the last-mile relationship.)

The End of Pennies & Amazon Coins from the Cloud

With the Canadian Mint abandoning the mighty penny and Amazon creating its own digital currency system called Amazon Coins (to be used to purchase apps in its Kindle Fire Tablet), where is cash heading?

In May, Amazon Coins will flood the market with “tens of millions of dollars” of virtual coins. The Canadian mint will remove the equivalent in copper.  This value transfer from cash coins to promotional coins is not connected but illustrative of the value of currency to drive engagement and what is often referred to as “big data.”

The penny and the dollar have not lost their value in our digital economy (*) but the ability for the data behind our purchase behavior may yield more value.

How we buy has changed so profoundly over the past few decades. Money and path to purchase has become more fluid. Days waiting for cash to clear is now instantaneous. Digital credentials such as Paypal and Paypass allow for seamless payments inconceivable few years ago.

We know that financial institutions and the new mobile wallets snub their nose at cash and hope that all transactions move through their gateway and pay a service toll. But more importantly for the Google’s and Apple’s wallets to tether a digital relationship that allows for incremental advertising and engagement opportunities.

As we move into digital wallets in the cloud and the store, look for more “Amazon” pennies from heaven. Or in this case, from the cloud.

* (Cash is a clumsy system and removing pennies can upset the countries cash register.  In 1971 the penny was axed in the UK. Cash confusion and many retail that were accused of rounding up rather than down allowed price increases that pundits attributed to increased inflation in the country for a quarter of a century. By the 70s, inflation was upward of 25%.)

Beware of Falling Apples: Business News Network interview

BNN: January 25, 2013 : Beware of Falling Apples: Smartphone Screen Size Wars

Is bigger better when it comes to smartphone screens? Gary Schwartz, CEO & President, Impact Mobile tells BNN why Apple is feeling gravity.

Mobile Retail Focus for 2013? (60min Business World interview)

In the following interview I discuss with , the preeminent business blogger (Blog Business World), that retailers need to embrace new strategies to reconnect with their customers. We discuss:

  • Strategies to win back customers who have left the malls, big box, and other retail outlets for their mobile devices.
  • How the behavior of mobile shoppers is different from both tethered online customers and from the traditional in store consumer.
  • Techniques for winning back those customers, reconnecting with them, and regaining their long term loyalty.
  • How to embrace mobile technology as a competitive advantage for your business, and place yourself in the forefront of the mobile shopping revolution.

http://www.blogtalkradio.com/FastShopper

10 mobile predictions for 2013 in under 75 words

1.      Substitute “Mobile” for more inclusive term “CONNECTED SCREENS
2.      Geo-LOCATION crucial to social strategy
3.      NFC continues to be far field
4.      For RETAIL: space between bricks and clicks most valuable
5.      For everyone: space CONNECTING screens most valuable
6.      Mobile viruses push SECURITY agenda
7.      More PRIVACY transgressions, More PRIVACY protection
8.      ANDROID increase the lead in a 3 horse race
9.      Operator CAPACITY drives new business models
10.  Through-The-Middle (TTM) services counter OTT