Richard Edgley

Serendipity strikes again. It's often the unexpected results from research that can prove the most interesting. This seems to be the case with an experiment conducted by Jonathan Stark - Mobiquity's Vice President of Application Architecture.

Jonathan has been gearing up for the Google Wallet by researching paying things with his iPhone. This involved trying out the Starbucks My Card app on his iPhone 4. He found the process generally good but the needless to say the user experience around registration and set-up was not ideal. This seems to be a common problem for mobile payment apps and might deter some. Anyway, his experiment proved interesting on number counts, one anticipated and the others less so.

Loyalty behaviour induced by reward - increased visits to Starbucks rewarded by loyalty points. While this is not a new insight, it does demonstrate that the combination of mobile payments with loyalty and offers programmes will be a compelling proposition for many retailers.

Jonathan then downloaded the Android version of app to his Nexus S but discovered he could not have one Starbucks payment card associated with two phones. To get round this he took a screenshot of his Starbucks barcode from his iPhone version and emailed it to his Nexus and saved it has an image. He then bought a coffee using an image of the barcode - not the actual barcode in the app. Essentially buying something with a picture. Interesting. Shifting the notion of methods of payment - highly portable and transferable.

He then blogged about this and included the screenshot of his Starbucks barcode. He had loaded his card with $30 and offered readers of his blog to use it to purchase a coffee. He asked people to limit purchases to $3:00 and to let him know how it went. The results were interesting.

• People not associated with him could use an image of his unique barcode to purchase a coffee. He was essentially broadcasting money!

• He discovered that his balance was increasing. People were topping-up his account!

Jonathan then wrote a bot that posted to Twitter every 15 minutes broadcasting how much money was on the card so that people would know before using it.

It seems that after 5 days, Starbucks shut the account. What's interesting is that an image of a unique barcode could be used to make a payment. That the payment could be made by anyone. It's also interesting to see the behaviours demonstrated by people using his card; the gratitude, the kindness, the sharing and the topping-up of the account.

You can read all about his experiment on his blog, here are a couple of links:

http://jonathanstark.com/blog/2011/06/20/mobile-payments-starbucks-app/

http://jonathanstark.com/blog/2011/07/14/broadcasting-mobile-currency/

Tesco has come a long way since they opened their first store in 1929 in Burnt Oak, Edgeware, Middlesex. Tesco is now a global brand, recognised not only as a leading grocery retailer but also as a company which strategically diversifies into other consumer markets ranging from clothing to telecommunications and financial services.

Tesco have been in South Korea since 1999 where they are partnered with Samsung and operate under the brand Homeplus.  Traditionally Tesco has sought to increase market share through expanding their store footprint. In 2008 the company purchased the South Korean Homever chain from Carrefour. While this has been successful, they wanted to expand their presence without opening new stores. Now, 82 years since the first stored opened in the United Kingdom, Tesco has launched a 2D store in a subway in South Korea.

According to research, South Koreans are one of the most hard working people in the world and as a result time poor. Tesco have responded to this insight by launching virtual grocery stores at locations where consumer footfall is high and people are likely to have dead time that could be used for shopping - subway stations.

Tesco have used backlit wall-length billboard posters to replicate the shelves of a traditional supermarket. The posters have product images together with a corresponding QR code (quick response code). The idea being that a commuter can browse the product range and shop by scanning the QR codes with their smart phones. The groceries are added to the basket and the process completed in the same way as typical online shopping - checkout, payment and home delivery.

The results from the campaign have been good so far:

• 10,287 visits by consumers to Homeplus via smart phones
• New registered members rose by 76%
• Online sales increased 130%
• Now no.1 in the online market in South Korea 

Tesco commissioned the Seoul office of advertising agency Cheil to plan and engineer the campaign.

Here is an interesting youtube video outlining the approach and results:

This is certainly an innovative approach - making use of smart phone and QR technology and capitalising on the waiting time of time poor shoppers. Not sure how easy to use the virtual stores are in peak commuter times. It would be interesting to see the idea being used in other locations where people can linger longer. It will also be intriguing to see what NFC (Near Field Communications) and the concept of the digital wallet might add to the proposition.

While the use of QR codes is relatively recent in the United Kingdom, they are widely used in Japan and South Korea. I can see the concept working in Japan where kiosk or vending machine shopping is common. But not at the peak times at a Tokyo metro station!

But would the idea work in the United Kingdom?

Last Christmas Waitrose used QR codes in their seasonal advertising. Perhaps if QR codes become more common. It could be used to create an advertising buzz. I can imagine the idea working if a supermarket chain turned a selection of their in-store recipe cards into billboard posters with a QR code. You could be enticed at Waterloo station, scan the QR code and then the ingredients added to your online shopping basket. As a means to do the weekly grocery shop, I suspect the commuting shopper would prefer investment in effective smart phone apps like those Tesco and Ocado have today.