May 31, 2007

Future Flop: HP's New Shopping Assistant

hp-shopping-assistant.jpg

In its latest much-ado-about-nothing press release, HP has unveiled an in-store kiosk designed to keep track of your purchase history and offer you coupons. *Yawn*

People don't want this in their stores. I don't see how they can continue to develop this "new idea" year after year after year.

When you go shopping you just want to find what you want and get out, not play with the latest in-store technology. If it's playing with technology you want, you'll go home and connect your brain to a video game, not peer intently into a coupon kiosk or interact with a klunky laptop strapped to your grocery cart. These systems will never take off. Not because they are invasive, but because they're a pain.

That's why the industry wants the automatic data capture capacity of RFID readers in entrances and spychips in loyalty cards. That's the only way they can be sure of getting people's data when their other schemes fail.

Of course, all of this watching will be good for stores and bad for consumers, as John Vanderlippe and I have been saying for years. (See our NoCards.org website) The article below about the "new" HP retail assistant says it pretty plainly, too:

"The system offers retail marketers granular control over the number of items that they can sell, and allows them to provide discounts to their most loyal and profitable customers."

Of course, offering discounts to selected, profitable customers who can afford to drop large sums at the store means no longer offering them to the customers who actually need them.

"A supermarket, for instance, could offer a discount on a steak to a customer who tends to buy expensive wine, rather than a low-income family that uses the lower prices to stock up."

I rest my case.

-Katherine Albrecht

Click "more" below to read the entire story here, or find it online here:
http://www.toptechnews.com/story.xhtml?story_id=133008V1YHDT

HP Unveils Personal Shopping Assistant
By Tom Sanders
May 30, 2007 10:43AM

HP's Retail Store Assistant allows retailers to push excess inventory by offering personalized rebate deals, and to prevent an item running out by discontinuing a promotion or even by discounting alternative products. The system offers retail marketers granular control over the number of items that they can sell.

HP Labs has unveiled a Retail Store Assistant kiosk that provides customers with a personalized shopping experience while allowing retailers to better target marketing campaigns.
The kiosk is placed inside retail stores, and customers log in with their loyalty card to access personalized offers, a shopping list and information such as instruction videos or recipes.

The system also prints out shopping lists and personalized discounts and indicates their location inside the store.

Retail Store Assistant allows retailers to push excess inventory by offering personalized rebate deals, and to prevent an item running out by discontinuing a promotion or even by discounting alternative products.

The system offers retail marketers granular control over the number of items that they can sell, and allows them to provide discounts to their most loyal and profitable customers.

A supermarket, for instance, could offer a discount on a steak to a customer who tends to buy expensive wine, rather than a low-income family that uses the lower prices to stock up.

The kiosk is a research project for now, but HP is talking to retailers about live testing. The first kiosks could show up in retail stores in about two years.

Retail marketing currently relies on printed brochures and mass media marketing campaigns.

Mohamed Dekhil, manager of retail applications at HP Labs, described the Retail Shopping Assistant's granularity as a bricks-and-mortar version of Google's AdSense online advertising program.

The in-store kiosks also offer HP a way to differentiate its products in an age in which PC and server makers compete solely on price, according to Dekhil.

"If you go to a retailer and tell them that you have the biggest and fastest server in the world it is not really exciting for them," he said at a meeting with reporters at HP Labs in Palo Alto, California.

"The question is what can it do for the retailer? How is it going to enhance the loyalty of its customers?"

HP also envisions itself as a trusted third party between store operators and the makers of brand name products. As a retailer's brands often compete with brand name products, the two are often reluctant to share sales information.

The kiosks are just part of what HP sees as a future shopping experience spanning Web sites and mobile devices.

A store could also opt for a model equipped with a camera, allowing shoppers to scan an article and talk to a specialized salesperson who can answer questions and offer tips on how to use the item.

This is important because the average staff turnover rate for retail stores can reach six months for entry-level employees and 18 months for managers. This makes specialized knowledge about products a rare and expensive commodity.

Posted by Katherine Albrecht at 8:10 AM | Comments (0)

January 11, 2006

RFID: a pathway to your soul?

Retail consultant Kevin Coupe of MorningNewsBeat tells us the average American household spends $1,500 a week on necessities -- along with a whole lot of useless junk. (My paraphrase.) When you combine all those households, American Demographics reports that Americans spend more each week than the entire annual gross domestic product of Finland. That's a lot of spending.

Kevin Coupe thinks it's great, since "this level of spending has helped to keep the U.S. economy relatively healthy" (though he acknowledges that much of the spending is done on credit cards, contributing to our crushing debt load). He also praises the skyrocketing growth of the U.S. population as "another healthy sign." (Hey! Yeah! Let's make more consumers! Then Americans can consume every last thing on the planet!) But the real jaw-dropper is this advice he gives to marketers about the bloated spenders. In addition to capturing their money, Coupe suggests going straight for their souls.

He writes:

These are our customers. Understanding them is the first step in serving them. And that means understanding them in fundamental ways... It means going beyond demographics.... Demographics is the study of what makes people the same. Psychographics is the study of what makes them different, and ultimately, we believe, is a better tool for figuring out a pathway into consumers' souls.

Our souls? We'll charitably assume he didn't really mean that. But RFID coupled with our personal data would be the ultimate marketing tool. Coupe explains:

We've become a culture that is able to generate enormous data on almost every customer we have....It is time for the knowledge-based retailer to serve the knowledge-based society. Some technologies, such as RFID, will make this easier...(Think of the powerful, knowledge-based marketing engine that Wal-Mart will have once its RFID efforts really get traction, and it owns banks and can issue credit cards/smart cards to its customers.)

Yes, indeed. I think of the "powerful, knowledge-based marketing engine" now gaining traction every day. But do we really want Wal-Mart owning banks and tracking people around the store with spychipped credit cards? And more importantly, do we really want them having an RFID pathway into our souls?

I don't.

- Katherine Albrecht

Posted by Katherine Albrecht at 8:14 PM | Comments (5)

January 4, 2006

The duct tape wallet - a sign of the times

RFID-laced credit cards with names like "Blink" and "ExpressPay" are in the mail, and concerned consumers are fighting back--with duct tape. Yikes!

Desperate times call for desperate measures, and an enterprising tech type has come up with a duct-taped, aluminum foil wallet that promises to keep invasive radio waves from siphoning card data--though you might have to suffer with an oozing, gooey back pocket on steamy days. Anyone familiar with the properties of duct tape can get a mental snapshot of that pending laundry disaster.

Here's a better idea: send back the spychipped cards. Yep. Just refuse them. We've been told that credit card companies will send you the familar low-tech mag striped cards if you insist. Better still, switch credit card companies in protest and opt to use anonymous cash whenever possible.

Cash: use it or lose it.

Liz McIntyre

Posted by liz at 1:49 AM | Comments (8)