Future of Retail

Mobile Retailing Blueprint
Verbatim reproduction and distribution of this document is permitted in any medium, provided this notice is preserved.
A Comprehensive Guide for Navigating the Mobile
Landscape
Version 1.0.0
2010/05/21
A Joint White Paper sponsored by the
National Retail Federation

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
Copyright © 2010 National Retail Federation. Page
All rights reserved. Verbatim reproduction and distribution of this document is permitted in any medium, provided this notice is preserved.
ii

Mary Scoggan Yum! Brands
Eric Dewey Yum! Brands
Thomas Powell Yum! Brands
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.
iii

This blueprint was developed with assistance from the following organizations:
The Association for Retail Technology Standards
(ARTS) of the National Retail Federation is a retailer-
driven membership organization dedicated to creating
an open environment in which both retailers and
technology vendors work together to create
international retail technology standards.
GS1 is a leading global organization dedicated to the
design and implementation of global standards and
solutions to improve the efficiency and visibility of
supply and demand chains globally and across
sectors.
NACHA supports the growth of the ACH Network by
managing its development, administration, and
governance. NACHA brings together payments system
stakeholder organizations to encourage the efficient
utilization of the ACH Network and develop new ways
to use the Network to benefit its diverse set of
participants.
NRF's mission is to advance and protect the interests
of the retail industry and to help retailers achieve
excellence in all areas of their business. As the world's
largest retail trade association and the voice of retail
worldwide, the NRF’s global membership includes
retailers of all sizes, formats, and channels of
distribution as well as chain restaurants and industry
partners from the United States and more than 45
other countries.
The NFC Forum was formed to advance the use of
Near Field Communication technology by developing
specifications, ensuring interoperability among devices
and services, and educating the market about NFC
technology.
The Retail Advertising Marketing Association (RAMA),
a division of the National Retail Federation, provides
unique networking opportunities, industry research,
and educational programming for retail advertising and
marketing professionals. NRF members are able to
take advantage of the added value of participating in
RAMA as a benefit of membership with NRF.
The Retail Solutions Providers Association is the only
association dedicated to the retail technology industry.
Members include resellers, distributors, hardware
manufacturers, software developers, consultants, and
service providers who bring retail technology solutions
to the marketplace.
iv

Shop.org, a division of the National Retail Federation,
is a member-driven trade association whose exclusive
focus is to provide a forum for retail executives to share
information, lessons learned, new perspectives,
insights, and intelligence about on-line and
multichannel retailing.
The Smart Card Alliance is a not-for-profit, multi-
industry association working to stimulate the
understanding, adoption, use, and widespread
application of smart card technology.
v

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
3.3.3 Benefits and ROI..................................................................................................................................37
3.4 PRODUCT INFORMATION ................................................................................................................................38
3.4.1 Transaction Process ............................................................................................................................39
3.4.2 Product Information from Friends.......................................................................................................41
3.4.4 Product Comparisons ..........................................................................................................................42
3.4.6 Case Studies.........................................................................................................................................43
3.4.8 Benefits and ROI..................................................................................................................................44
3.5 LOYALTY PROGRAMS ....................................................................................................................................45
vi

3.5.2 Case Studies.........................................................................................................................................49
3.5.4 Benefits and ROI..................................................................................................................................51
3.6 PROMOTIONS AND COUPONS..........................................................................................................................53
3.6.1 Approaches to Mobile Offers...............................................................................................................54
3.6.2 Case Studies.........................................................................................................................................55
3.6.4 Benefits and ROI..................................................................................................................................56
4. MOBILE COMMERCE..................................................................................................................................59
4.1 MOBILE BROWSER-BASED M-COMMERCE......................................................................................................59
4.2 M-COMMERCE APPLICATIONS ........................................................................................................................61
4.2.1 Advantages...........................................................................................................................................61
4.2.2 Disadvantages......................................................................................................................................62
4.2.3 Future Considerations.........................................................................................................................64
4.3 CASE STUDIES................................................................................................................................................64
4.3.1 Mobile Ticketing..................................................................................................................................64
4.3.2 Other m-commerce Applications .........................................................................................................66
4.3.4 Benefits and ROI..................................................................................................................................72
4.4 IMPLEMENTATION CONSIDERATIONS .............................................................................................................72
4.5 OTHER KEY CONSIDERATIONS.......................................................................................................................74
4.5.1 Easy Payment Solutions.......................................................................................................................74
4.5.2 Integrated Order Management and Customer Care............................................................................75
4.6 THE VIRTUAL STORE .....................................................................................................................................75
4.7 PARENTAL APPROVAL....................................................................................................................................76
5. MOBILE PAYMENT......................................................................................................................................77
5.1 MOBILE REMOTE PAYMENT...........................................................................................................................79
5.1.1 How Mobile Remote Payment Works ..................................................................................................80
5.1.2 Use Case..............................................................................................................................................83
5.1.3 Mobile Remote Payment Pilots and Commercial Initiatives ...............................................................85
5.1.4 Implementation Strategies ...................................................................................................................87
5.2 MOBILE CONTACTLESS PAYMENT .................................................................................................................91
5.2.1 Payment Options and Enhancements...................................................................................................92
5.2.2 Retailer Advantages.............................................................................................................................95
5.2.3 Mobile Payments Ecosystem................................................................................................................95
5.2.4 Use Cases for Mobile Contactless Payment ........................................................................................97
5.2.5 Mobile Contactless Payments Pilots and Commercial Initiatives .......................................................98
5.2.6 Implementation Strategies .................................................................................................................102
5.2.7 Phased Approach for Implementing Mobile Contactless Payments ..................................................105
5.2.8 Roadblocks to Mobile Contactless Payment......................................................................................105
5.3 ACH PAYMENT ENABLED BY MOBILE DEVICES ..........................................................................................108
5.3.1 Use Case for ACH Mobile Payment Enrollment—POS.....................................................................108
5.4 OTHER MOBILE PAYMENT PILOTS AND COMMERCIAL INITIATIVES .............................................................109
5.5 MOBILE PAYMENTS ROI..............................................................................................................................110
5.5.1 ROI Considerations ...........................................................................................................................111
5.5.2 Benefits of Mobile Payment...............................................................................................................111
5.5.3 ROI Model .........................................................................................................................................113
6. MOBILE OPERATIONS..............................................................................................................................126
6.1 MOBILE POINT OF SALE ...............................................................................................................................126
6.1.1 Mobile POS Examples .......................................................................................................................128
vii
6.1.2 Technology and Standards Employed................................................................................................130

6.1.3 Benefits and ROI................................................................................................................................130
6.1.4 Implementation Considerations.........................................................................................................131
6.2 WORKFORCE MANAGEMENT........................................................................................................................131
6.2.1 Workforce Management Examples ....................................................................................................132
6.2.3 Benefits and ROI................................................................................................................................134
6.3 INTERNAL COMMUNICATION........................................................................................................................135
6.3.1 Internal Communication Examples....................................................................................................135
6.3.3 Benefits and ROI................................................................................................................................136
6.4 MOBILE APPROVALS....................................................................................................................................137
6.4.2 Benefits and ROI................................................................................................................................138
7. INTEGRATED IMPLEMENTATION STRATEGY.................................................................................141
7.1 DEVELOPMENT CONSIDERATIONS................................................................................................................142
7.1.1 Browser-Based Applications..............................................................................................................142
7.1.2 Downloaded Applications..................................................................................................................144
7.1.3 Mobile Payment.................................................................................................................................146
7.1.4 Other Application Types....................................................................................................................147
7.2 APPROACH TO MOBILIZATION/PATH TO MOBILE .........................................................................................147
7.2.1 Mobile Governance ...........................................................................................................................148
7.2.2 Achieving Control of the Mobile Channel .........................................................................................149
7.2.3 Privacy, Authentication, and Security................................................................................................150
8. MOBILE STANDARDS................................................................................................................................153
8.1 TECHNOLOGY DETAILS................................................................................................................................155
8.1.1 Wi-Fi and ZigBee...............................................................................................................................156
8.1.2 Near Field Communication ...............................................................................................................157
8.2 CONTACTLESS SMART CARD STANDARDS ...................................................................................................157
8.3 ASSOCIATION OF RETAIL TECHNOLOGY STANDARDS ..................................................................................158
8.3.1 Service Oriented Architecture (SOA) Blueprint.................................................................................158
8.3.2 Cloud Computing Blueprint...............................................................................................................159
8.3.3 ARTS Data Model..............................................................................................................................159
8.3.4 ARTS UnifiedPOS..............................................................................................................................160
8.3.5 ARTS XML .........................................................................................................................................160
8.4 GS1..............................................................................................................................................................161
9. TERMS AND ACRONYMS .........................................................................................................................162
viii

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
ix

Copyright © 2010 National Retail Federation. Page x
FIGURE 44: NFC COMPATIBLE CONTACTLESS STICKER.............................................................................................106
FIGURE 45: USING AN NFC MICROSD CARD .............................................................................................................107
FIGURE 46: ACH MOBILE PAYMENT ENROLLMENT PROCESS ....................................................................................109
FIGURE 47: ROI MODEL SECTIONS............................................................................................................................113
FIGURE 48: BENEFIT FACTORS ...................................................................................................................................114
FIGURE 49: RETAILER’S ANNUAL POS REVENUE......................................................................................................116
FIGURE 50: RETAILER’S PAYMENT PROCESSING COSTS ............................................................................................118
FIGURE 51: RETAILER’S ANNUAL TRANSACTION PROCESSING COSTS ......................................................................119
FIGURE 52: RETAILER’S TOTAL BENEFITS.................................................................................................................120
FIGURE 53: FIVE BENEFIT FACTORS SECTIONS IN THE ROI MODEL ..........................................................................122
FIGURE 54: COST FACTORS SECTION OF THE ROI MODEL.........................................................................................125
FIGURE 58: WORKFORCE MANAGEMENT MODEL......................................................................................................132
FIGURE 60: SIMPLIFIED MOBILE APPROVAL FLOW ....................................................................................................139
FIGURE 61: IPHONE AND SONY ERICSSON K790I DISPLAY AREAS ............................................................................144
FIGURE 62. OVERVIEW OF MOBILE APPLICATIONS BUILT ON A CENTRALIZED MOBILE PLATFORM..........................150
FIGURE 63: CONTACTLESS PAYMENTS HARDWARE AND SOFTWARE WITH ASSOCIATED STANDARDS.......................153
FIGURE 66: WI-FI AND ZIGBEE ACCESS POINTS.........................................................................................................156
FIGURE 68: ARTS STANDARDS..................................................................................................................................158
FIGURE 69: SOA PLATFORM AND SERVICES ON A CLOUD INFRASTRUCTURE.............................................................159

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.
1.1 Consumer Opportunities
Retailers have a unique opportunity right now to define how they want to interact with
the mobile consumer. Mobile is not only considered the fourth retail channel (Figure 1),
it tends to be an enabler for the other three channels as well. Consumers are already using
phones and other mobile devices to not only pay for purchases, but also to interact with
retailers in a variety of other ways. Mobile retail represents both a new way to shop and
a new payment paradigm.
Consumers with a mobile phone can locate the nearest Starbuck’s, browse the available
coffees, build a drink to be picked up on arrival, and pay using a Starbuck’s card on the
phone. Whole Foods Markets customers puzzled by the use of an ingredient can use their
phones to find and display recipes using that ingredient and even restrict their choices to
cater to special food allergies or requirements, such as gluten or lactose intolerance.
Shoppers headed for Target can search a friend’s gift registry for the perfect gift, locate
the nearest store that has that specific item in stock (right down to the department and
aisle location of the item within that store), and check the gift off the registry list—all on
a mobile phone. Phones can store and display loyalty, reward, and club membership
cards (which most retailers scan directly from the screen) and match a health condition
with the correct over-the-counter medication.
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
Copyright © 2010 National Retail Federation. Page 1
3
Juniper Research, "Mobile Payments Markets: Strategies & Forecasts 2010-2014.”
All rights reserved. Verbatim reproduction and distribution of this document is permitted in any medium, provided this notice is
preserved.

preserved.
Figure 1: Available Retail Channels
Using phones or other mobile devices for payment is advantageous for both consumers
and retailers. Payment by phone can be combined with additional services to increase
sales, speed up transaction times, and strengthen customer loyalties. Sales can close
more quickly when shoppers looking at a product can access product information and
reviews (for example, using their phones to read a bar code) and then pay for the product
on the spot. Consumers using mobile phones as a payment method enjoy the convenience
and security of not having to carry cash or a card. In Denmark, consumers can reserve
seats on a train, purchase their tickets, and use those tickets to board the train while
carrying nothing but their phones. When consumers pay by phone, payment information
that adheres to ARTS standards can be integrated into the retailer’s back-office systems,
coordinating all-important inventory, customer relationship, enterprise resource planning,
and financial data.
The mobile phone market has moved from pure calling devices to so-called smartphones
(capable of processing data as well as voice), providing consumers with more computing
power in their purses and pockets than ever before. And just on the horizon are devices
enabled for Near Field Communication (NFC), which are capable of short-range wireless
interaction. Such phones allow retailers to implement mobile contactless payment and
take advantage of attendant opportunities for new payment options. In the Asia
Pacific/Japan region, mobile contactless payments are accepted in most taxis and trains
and some stores. San Francisco Bay Area residents with NFC-enabled phones
participating in a recent pilot program paid for a ride on the rapid transit system or a meal
at Jack in the Box®
using their phones—no purse or wallet required. Phones can be
equipped with a mobile wallet, allowing consumers to carry payment and loyalty cards
electronically. Consumers benefit—their cards are not only secure, they are easily
cancelled and replaced if lost: one call does it all. Retailers benefit—mobile wallets can
help solve the critical problem of wallet share and represent opportunities for new
incentives for customers to purchase, new ways for customers to purchase, and new ways
for customers to pay.
CrossChannel
Brick and mortar
Store within a store
Franchise
Store
Catalog
Mail order
Call center
e-commerce
Affiliates
Social commerce
Web
Native applications
Mobile Web sites
NFC hardware
Mobile

To achieve universal consumer acceptance, mobile processing must be standardized
around the world. What works in the United States must also work in Asia, the Pacific
Rim, Europe, the Middle East, and Africa. There is only one way to ensure that
processing is the same everywhere, and that is by creating and adopting global standards.
Fortunately, numerous organizations are already working to develop and promote these
necessary standards. One product of this effort is this document.
1.2 Opportunities Within the Retail Establishment
The emergence of the mobile channel will affect the entire retail organization—
distribution, operations, merchandising, marketing, human resources, and customer
service. The mobile retailing landscape includes opportunities for associates as well as
consumers (Figure 2).
Mobile Retailing
preserved.
Consumer Employee
Mobile
Marketing
Mobile
Commerce
Mobile
Operations
Figure 2: Mobile Retailing Classifications
For example, making the point-of-sale mobile allows customers to avoid lines and retain
receipts electronically, while retailers save on labor and materials costs, and sales
associates can locate and assist customers anywhere in the store. Sales associates can
also use mobile devices to clock in and out and request time away from the floor.
Integration with workforce management capabilities, including appropriate labor
forecasting, labor scheduling, and labor management and budgeting systems can optimize
both daily internal operations and corporate-driven tasks at a store.
The retail supply chain will also benefit from the use of mobile technology, particularly
when the manufacturers of specialized mobile devices incorporate new features into
mobile phones such as better bar codes and RFID readers. Both data and voice can then
be transmitted effectively to receive and pick merchandise and track merchandise
movement from warehouses to stores and within stores.
1.3 How This Document Can Help
The Mobile Retailing Blueprint is the first phase of the NRF Mobile Retail Initiative.
The mission of the Mobile Retail Initiative is to be a catalyst for mobile-inspired
innovation that enhances the retail shopping experience and improves internal business
processes. This retailer-led initiative will guide and direct the industry in the

preserved.
maximizing benefits and minimizing implementation
types of
ble using
e following questions:
sumers shop?
fficient?
field?
tailing and more ideas about how this trend can help the reader’s
s and acronyms used both in this blueprint and in discussions of
mobile retail in general.
dissemination of mobile-related best practices and the development of standards and
documentation for the purpose of
expense, ongoing costs, and fees.
The first phase of this effort involves retailers, vendors, analysts, and standards
organizations. This blueprint captures the experience of retailers and vendors who have
experimented with mobile applications, leverages their experience, and tailors it to retail.
The blueprint was created by members of GS1, NACHA, the NFC Forum, the NRF and
its ARTS, Shop.org, and RAMA divisions; RSPA, and the Smart Card Alliance to help
retailers understand the current mobile retailing landscape, recognize what
applications are on the horizon, and determine how best to embrace this trend.
Retailers should use this blueprint as a reference to understand what is possi
mobile phones. The blueprint can help readers answer th
• How can mobile retailing improve my business?
• What capabilities do mobile phones currently offer?
• What types of mobile applications help con
• What are the choices for mobile payment?
• What types of mobile applications help associates be more e
• What technologies and standards apply in the mobile
• What implementation options should be considered?
The reader will hopefully walk away with a better understanding of how mobile phones
can and do affect re
particular business.
Section 2, “Introduction,” introduces the topic of mobile retailing in more depth. Section
3, “Mobile Marketing,” and Section 4, “Mobile Commerce,” describe some of the
customer-oriented applications to which mobile retailing lends itself and explore options
for implementing different applications. Section 5, “Mobile Payment,” explains the
different mobile payment methods, their advantages and disadvantages, and the
implications of adopting one method rather than another. Section 6, “Mobile
Operations,” applies the concepts of mobile retailing to internal retail operations and
illustrates how adopting a mobile approach can improve efficiency and reduce costs.
Section 7, “Integrated Implementation Strategy,” focuses on implementation, detailing
some of the challenges that implementation can entail. Section 8, “Mobile Standards,”
describes the technology standards that underlie a successful implementation effort.
Section 9 defines the term

preserved.
2. INTRODUCTION
2.1 What is Mobile Retailing?
Mobile phones are ubiquitous, outnumbering credit cards and bank accounts around the
world. People depend on their mobile phones, and they carry them everywhere,
including into stores. The capabilities of smartphones (phones that handle data as well as
voice signals) combined with the ease with which applications (special-purpose computer
software) that support retail functions can be downloaded to these phones creates an
opportunity to leverage mobile phones for shopping.
The e-commerce revolution did more than just open up an additional channel through
which retailers can sell products. It created new capabilities for analyzing shoppers’
behavior. It facilitated new ways to share product information and help customers make
purchase decisions, taking advantage of the on-line Internet connection to communicate
with the customer by name.
But as mobile phones became more sophisticated, they became capable not only of e-
commerce functionality but also of being able to identify customers automatically
through proper integration with mobile network operators (MNOs) such as Verizon,
AT&T, or Vodaphone. Many e-commerce features, such as detailed product information,
product comparisons, and customer reviews, can now be available in stores on a mobile
phone, with an additional benefit: immediate customer gratification. Customers take the
merchandise home with no shipping or handling costs. Furthermore, the e-commerce
features can be augmented with applications that enable mobile payments, targeted
promotions, interactive displays, and digital receipts.
Mobile retailing has thus become an important and valuable channel through which
retailers can reach consumers. Retailers who ignore mobile retailing risk being ignored
in return by current and future generations of shoppers.
Figure 3 illustrates what the retail store of the future could look like: mobile devices such
as media shopping cards, consumer phones, associate dashboards, and scales. Mobile
devices will play a large part in future commerce.

Bluetooth
Wireless POS
Peripheral Scales
Self Serve
Cashless
Payments
Bottom of Basket
Detection
Interactive
Customer
Displays
Biometric
Contactless Readers
Employee/Mgr
Dashboards
Access Points
Streaming Video
Consumer
Phones
RFID Shelf
Labels
Media
Shopping
Carts
Shelf Edge
Displays XBOX 360
$399
Self assisted
ordering
In-store
back office
RFI
D
Holographics
In-store
kiosks
Electronic
Menu Boards
Location Based
Services
RFID Gondola
Labels
Figure 3: The Retail Store of the Future
2.2 Mobile Devices Defined
While this blueprint focuses on mobile phones, the concepts are applicable to any mobile
device connected to the Internet, including, for example, portable music and video
players, handheld gaming devices, laptop and ultra-mobile personal computers, e-book
readers, and tablets. Consumers are more readily upgrading their smartphones, which
have advanced to the point of being handheld computers whose capabilities exceed those
of the computers carried on board the first space missions. Figure 4 shows the
breakdown between smartphones, feature phones (less flexible smartphones), and other
connected devices. It further distinguishes smartphones by their different operating
systems (software management systems), or OSs.
preserved.

Figure 4: U.S. Device Type and Operating System Mixes
The typical smartphone includes most of the features described Table 1. Various
combinations of these features can be leveraged to provide a richer experience for
shoppers.
Table 1: Smartphone Features
Feature Significance
Bluetooth wireless
connectivity
Used to connect mobile phones to other devices (such as a headset)
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.
Two-way e-mail
messaging
Useful for delivering receipts and coupons.
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.
preserved.

preserved.
Feature Significance
Multimedia Messaging
Service (MMS)
A message service, useful for sending and receiving rich content, such as
pictures or audio.
Near Field
Communication (NFC)
A wireless peer-to-peer and reader/writer feature available in selected
countries. As a limited number of mobile phones in use have embedded
NFC chips, interim solutions that add NFC “stickers” to mobile devices are
possible. Nokia has recently announced that they will place NFC chips in
all phones manufacture in 2001. Useful for contactless payment and other
contactless communication.
Short Message Service
(SMS)
A message service, useful for sending text. Most mobile phones can use
SMS to send and receive short text messages. Certain mobile devices,
however, such as the iPod Touch or iPad, cannot communicate using
SMS.
2.3 Mobile Application Technology
Mobile applications can be implemented using four methods:
• Browser-based
• Message-based
• Downloaded to a device
• Preinstalled on the device (referred to as native applications)
2.3.1 Browser-Based Applications
A retailer often wants to provide information that is available on the retailer’s Web site to
mobile consumers or associates. Smartphones equipped with a browser can access these
applications; however, their small screen sizes and keyboards provide a less satisfactory
experience than when the application is accessed on a computer. In this case, people are
better served with a mobile-specific user interface that is optimized for the capabilities of
the typical smartphone.
For example, compare the American Airlines Web site that is displayed on a computer
(found at www.aa.com), shown on the left in Figure 5, with the mobile version, shown on
the right (found at www.aa.com/mobile).

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.
preserved.

preserved.
2.3.3 Downloaded and Native Applications
Mobile applications, typically referred to as apps, can also be either downloaded
applications or native applications. That is, a ready-to-run (compiled) application built
for a specific mobile device is either downloaded to the device or preloaded and present
when the device is purchased. These applications generally afford the user a better
experience, because they can take full advantage of the particular mobile device’s unique
capabilities. But since these applications are device-specific, a separate application is
required for every different type of device, thus increasing development costs
exponentially. In addition, a mechanism is required that can deliver new or upgraded
applications to devices.
Several vendors, such as Apple, RIM/Blackberry, and Google/Android have created
application stores, where users can find and download applications targeted specifically
to their phones. New companies are emerging that claim to provide “write once, run
anywhere” functionality for mobile phones. These companies allow the developer to
create an application once and then deploy it on mobile phones from different vendors.
Handsets with NFC chips also provide a secure and simple application solution. A
variety of applications can be downloaded to a secure element in the phone and accessed
easily. These phones interact with contactless terminals, other NFC devices, or RF tags,
sending and receiving data by tapping. NFC phones are currently available in Europe
through various vendors and are being used in pilot projects in the U.S. and Asia.
2.3.4 Thin-Client Architecture
One major challenge of mobile retail is how to support a multitude of mobile platforms,
screen sizes, input capabilities, and customers who do not have a data plan. One
implementation option that can address these issues is a client-server architecture that
relies on the phone as the client. In this so-called thin client architecture, a server has the
intelligence about the workflow required for the particular service (e.g., the first screen
shows a catalog, the second screen product detail, the third screen payment options), and
the client (the phone) needs only display-related capabilities and input handlers (Figure
6).

Figure 6: Thin Client Architecture
2.4 Mobile Retail and Social Media
Social media marketing is becoming a standard in today’s cross-channel marketing mix,
providing retailers with a broad range of offerings that can be used to connect to and
interact with customers. Social media tools such as Facebook enable retailers to engage
customers and build communities of interest around their brands while delivering
targeted and personalized offers.
Retailers understand that customers need a reason to interact with their products and
brands. Social networks are the fastest growing engagement point between brands and
customers and will grow more quickly than any other form of interactive marketing.
Retailers are starting to see the benefits of building up groups of like demographics on
social networking sites, such as Facebook, and on mobile social networks, such as
Twitter, so that they can communicate more cost effectively with customers, as opposed
to using mass media to transport key messages and new promotions out to the market.
A social media strategy and a mobile strategy will be at the forefront of a successful retail
market strategy in the coming years. Successful retailers will learn how to adopt both
social media and mobile strategies to compete. A collection of social media, such as
Facebook, Twitter, and blogs, will be key to customer and prospect interaction.
In addition, social media are a natural fit for mobile, since mobile devices are at the
center of how people communicate. The number of active users of mobile social
networking sites is expected to rise, from 55 million in 2010 to nearly 730 million in
2013, so retailers must immediately begin to understand how mobile will fit into their
social media marketing strategy. More than 56 percent of customers follow a retailer’s
preserved.

preserved.
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.
2.5 Mobile Retail Application Categories
Mobile retail applications can be grouped into three categories:
• Mobile marketing (described in Section 3)
• Mobile commerce (described in Section 4), which includes mobile payment
(described in Section 5)

preserved.
• Mobile operations (described in Section 6)
2.5.1 Mobile Marketing Applications
Mobile marketing applications (Section 3) focus on advertising, marketing, and
increasing brand awareness and loyalty. They also provide product information and
shopping tools that can be used to enhance the retail experience. Mobile retail marketing
applications can support the following areas:
• Brand marketing
• Customer service information
• Shopping tools
• Product information
• Loyalty programs
• Promotions and coupons
2.5.2 Mobile Commerce Applications
Mobile commerce applications (Section 4) include mobile payment applications (Section
5). Mobile commerce applications include traditional e-commerce applications accessed
from a mobile device. Mobile payment applications encompass all payments made using
the mobile device, including remote payments and contactless payments.
2.5.3 Mobile Operations Applications
Mobile operations applications (Section 6) are tools used by retailers and associates that
can lower costs and increase service for retailers. These applications focus on the
following functions:
• Mobile POS
• Workforce management
• Communications
• Approval workflow
Although retailers can choose to implement applications dedicated to implementing the
functions in a particular category only, it is more common for applications to support
functions in several categories. A low risk approach is to implement the easy
functionality first, then add more over time.
Each of these categories is further described in the referenced sections, including detailed
examples of real applications as well as future ones.
2.5.4 Mobile Application Providers
Once a retailer has settled on the desired functionality and a basic technology, the next
decision is whether to develop the mobile capabilities in house or outsource development.
Many companies specialize in developing mobile applications. Outsourcing is often the
most cost-effective solution, because it allows the retailer to avoid the costs of acquiring
the right skill sets, tools, and test environments.

preserved.
The more complex applications require integration to back-end systems (like e-
commerce), so one should not underestimate these costs. If possible, retailers should
design their systems using the principles of service-oriented architecture (SOA) so that
common functionality can be shared across channels. (For more information, see the
SOA Blueprint for Retail4
). Additional benefits come from moving the applications/SOA
services into the cloud, following the recommendations in Cloud Computing for Retail.5
2.5.5 Day-in-the-Life Examples
To illustrate the potential for mobile technology in retailing, the following is a
hypothetical example of the day in the life of a consumer, Eric, who uses his NFC-
enabled mobile phone to pay at a restaurant and to redeem coupons at a shopping center.
Unless otherwise noted, all of the capabilities described are currently possible.
2.5.5.1 Restaurant Transaction
Restaurants in Eric’s office building accept payments at contactless point-of-sale (POS)
terminals, and contactless cards are widely used for payment. Eric has enabled several
credit and debit card applications in his mobile phone.
In the elevator going up to the restaurant, Eric sees a restaurant poster advertising next
week’s special event and “reads” it using his phone. A Web link on the poster gives him
more information and a discount coupon to use if he attends. Eric pays for his lunch at
the restaurant by touching his NFC-enabled phone to the POS terminal.
The phone provides Eric with additional financial services:
• He can choose the credit or debit card with which to pay, depending on whether
his lunch is a business or personal expense.
• He can link to a mobile banking site, to check the balance on a card before
making a payment or to view his use and purchase history.
• He can receive messages indicating that the balance on a card is low or indicating
that a credit card payment is due.
• Depending on the transaction amount, he can be prompted by his NFC-enabled
phone to authorize payment. Authorizations might range from no confirmation, in
the case of smaller amounts, to special authentication mechanisms, such as
biometrics, for large amounts. He may use a password to start the payment
application.
• If the restaurant has chosen to add NFC to its contactless reader, Eric can also
receive a receipt transmitted directly to his phone when he confirms the payment.
The receipt can be stored in the phone and accessed for expense tracking. Loyalty
points or a coupon for a future dinner discount can be added in the same way.
At some time in the future, it may also be possible for Eric, who sells cleaning products
in his spare time, to use his NFC-enabled mobile phone as a POS terminal to accept
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

preserved.
contactless payments from his customers’ NFC-enabled mobile phones or contactless
cards.
2.5.5.2 Retail Shopping Center Example6
Eric’s NFC-enabled phone provides Eric with additional services in the retail
environment. Upon entering the shopping center, he touches his NFC-enabled phone to a
conveniently located kiosk and receives the following:
• Shopping center loyalty points for returning to the center
• Information linking the current coupons on his phone to stores within the center
offering those goods and possibly additional discounts
• Special offers customized to his profile
While walking through the center, Eric notices a “smart poster” offering him a discount
on a product that he has been considering. Eric touches his NFC-enabled phone to the
poster to retrieve the coupon.
Eric then enters a store to shops for an item he wants to buy. He sees a number of
competing products on the shelf but does not know which to choose. He uses his mobile
phone to read the products’ contactless tags (barcodes, quick response codes). The phone
reads the codes and links provided with the products and displays product information
and customer reviews on the retailer’s Web site. Eric also checks an independent Web
site that he regularly uses. Armed with this information, Eric selects a product. At check
out, he accomplishes the following by simply touching his phone to the POS terminal:
• Automatically redeems coupons matched to the item he is purchasing
• Makes the purchase
• Receives more special offers for future purchases, customized to his profile
Eric can check the history of purchases and remaining loyalty points on his phone
whenever he wants. He can share information and coupons with friends who have NFC-
enabled phones, where permitted by the coupon issuer, by touching his phone to theirs.
2.5.6 Mobile Market Statistics
In order to make the right decisions, it is helpful to understand the current mobile phone
market as well as how a retailer’s own customers use mobile phones. Understanding
long-term trends can help retailers avoid investing in technologies that will not survive
and can also illuminate the technologies emerging on the horizon. The following sections
provide statistics that are current as of this document’s publication date. These statistics
include:
• Mobile smartphone market share
• Current retail priorities
6
This example assumes that the growing popularity of NFC-enabled mobile phones provides an incentive
for retailers to enhance the functionality of their current contactless POS terminals with NFC, so that they
can send coupons, loyalty updates, and receipts to NFC-enabled mobile phones. It is also assumed that
retailers, advertisers, and consumer goods manufacturers offer a variety of mechanisms for consumers to
obtain special offers, such as by using their NFC-enabled phones to read and store such offers from
conveniently placed “smart posters.”

• Mobile payments statistics
• Projected growth in mobile technologies
2.5.6.1 Mobile Smartphone Market Share
Figure 7 shows the smartphone market share for 2010. The most popular are those from
Nokia, RIM, and Apple, representing 74 percent of the global market. HTC, Motorola,
and all others account for the remaining 26 percent. The more impressive statistic is the
67 percent growth in smartphones over the past year.
Figure 7: Worldwide Smartphone Market Share
All smartphones must run a mobile operating system. Figure 8 shows the market share
occupied by the different operating systems available worldwide. On a global basis (the
pie chart) Symbian, the operating system from Nokia, is the clear market leader.
However, as the bar chart in Figure 8 shows, the penetration of Symbian in the North
American market is much smaller (4 percent as opposed to 47 percent).
preserved.

Figure 8: Market Shares of Smartphone Operating Systems Worldwide and in
North America7
According to Canalys:
• The North American smartphone market will grow by 38 percent in 2010.
• Android device shipments in North America will surpass 12.3 million units in
2010.
• BlackBerry, iPhone, and Android devices will account for over 80 percent of the
smartphones shipped in North America this year.
• The Latin American market will also experience solid growth this year, up 30
percent over 2009.
Smartphone shipments in North America totaled 47.2 million units in 2009, an increase
of 27 percent over the volume seen in 2008, helped by a strong fourth quarter. This
healthy growth is forecast to accelerate to 38 percent in 2010, bringing total shipments in
the region to 65.1 million units.
2.5.6.2 Retail Priorities
RISNews teamed with eTail to survey 75 retailers in January 2010. The survey found
that different retailers focused on different aspects of mobile retailing, as represented in
Figure 9. Retailers should prioritize these aspects based on their own customers.
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)
preserved.

Figure 9: Retailer Interest in Different m-commerce Capabilities8
2.5.6.3 Mobile Payments Statistics
Mobile payments are defined as payments for goods or services that are initiated from a
mobile phone or similar device (such as a personal digital assistant). Analysts predict
significant growth in mobile transactions over the next 5 years:
• Insight Research Corporation estimates that 2.2 billion consumers will generate
$124 billion in financial transactions by 2014.9
• A more conservative estimate still predicts huge growth: Mercator Advisory
Group estimates that payments from remote devices will grow from an estimated
$389 million in 2009 to $8.6 billion in 2014.10
• Frost & Sullivan estimates that the mobile transactions market (non-NFC-based
mobile payments, mobile banking, remittance, and NFC-based mobile payments)
in Europe will grow to €4 billion–€5 billion by 2013.11
• Arthur D. Little estimates that mobile payments could reach $250 billion in sales
volume by 2012.12
preserved.
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.

preserved.
• 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

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.
0
500
1000
1500
2000
2500
3000
3500
2007 2008 2009 2010 2011 2012
Mobile Payment Transactions by Technology (in Millions)
SMS WAP/Web USSD NFC
Figure 10: Gartner April 2009 Projections of Mobile Payment Technologies
Early industry trials indicate that all industry stakeholders are interested in mobile
payments. For consumers, such payments represent convenience. For merchants, they
open up opportunities for new payment types and for applications that leverage payment
(e.g., loyalty and rewards programs). For mobile operators, they provide the opportunity
to attract customers, improve customer retention, and increase average revenue per user.
For financial services providers, they provide a new payment channel and the opportunity
for differentiation and increased transactions. Mobile payments have also created
opportunities for new service providers to offer value-added services. In their May
edition, Digital Transactions describes 21 different alternative payment methods.21
2.5.7 Mobile Retailing Ecosystem
As mentioned in the introduction to this section, mobile retail comprises three major
functional categories: mobile marketing, mobile commerce (including mobile payments),
and mobile operations. Mobile retail therefore represents a complex ecosystem that
includes a variety of devices, applications, and standards.
preserved.
21
Digital Transactions: Trends in the Electronic Exchange of Value, Volume 7, No. 5, May 2010,
http://www.digitaltransactions.net/files/DigitalTransactionsMay10.pdf

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.
Figure 11: Mobile Retailing Ecosystem
preserved.

preserved.
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
3.1 Advertising and Marketing
Not every mobile activity must fall within the traditional boundaries of retail. One of the
simplest activities can be drawn from the entertainment realm: an application that
advertises or reinforces brand image. This class of application stands alone; no
integration is necessary with existing systems. The goal of such applications is to market
the brand and refer consumers to other modes of communication with the retailer. This
approach is often tightly integrated with social media efforts.
While brand marketing does not require integration, promotions do. For such offers to be
truly effective, they should be integrated with the retailer’s customer relationship
management (CRM) system to be personalized and targeted. Spamming customers is the
fastest way to lose them.
3.1.1 Brand Marketing
Every brand wants to be represented on a consumer’s phone. But not every brand
deserves that placement. Brands with no obvious reason for phone presence can achieve
that presence by sponsoring an application. For instance, Charmin (the toilet paper
manufacturer) sponsors an iPhone application called “Sit or Squat” that locates nearby
public bathrooms on a map.
3.1.2 Digital Signage
Digital displays that advertise products and promotions can facilitate in-place interaction
with customers. (For example, scanning a food display might show recipes using that
food.) This interaction is typically accomplished using NFC tags or quick response (QR)
codes that allow the phone to “read context.” (QR codes are two-dimensional bar codes
that can contain a lot of information, including URLs.) A unique number, simple data,
or a Web site link is communicated to the mobile phone, through which information
specific to the display can be accessed.
One example of such digital signage is the display of bar codes on large billboards
(Figure 12). A consumer with a phone can take a picture of the bar code and an action
occurs, such as displaying a Web site, sending a message, or requesting a promotion.

preserved.
Figure 12: 2-D Bar Code on a Billboard
3.1.3 Augmented Reality
Phones equipped with global positioning system (GPS) capabilities (to ascertain
location), a compass (to ascertain facing direction), and a video camera can add labels to
a video with information about what the consumer is seeing. The consumer holds the
phone so that the camera in the phone views the landscape. Information is then overlaid
on the image. For example, this capability can be used to locate coffee shops, post
reviews on storefronts, and display promotions on storefronts to entice shoppers inside.
3.1.4 Example Applications
Examples of advertising and marketing mobile applications are described in Table 2.
Table 2: Examples of Advertising and Marketing Mobile Applications
Gucci’s iPhone application allows the consumer to
browse current fashion collections, see news and events,
and browse the designer’s playlist. Several videos are
also available. This application focuses on brand
awareness.
Adidas provides an Urban Art Guide for Berlin as an
iPhone application. Using maps, the consumer is directed
to different sites in the city to view many forms of urban
art. A gallery of pictures and the ability to upload new
ones is also provided. This application associates the
brand with the “street scene.”
The Hugo Boss iPhone application provides videos of
fashion shows, including behind-the-scenes footage. It
includes a color matching feature that lets the consumer
find items that fit the consumer’s wardrobe and a feature
that can save items to a wish list.

Google has identified over 100,000 businesses in the
United States as "Favorite Places on Google," based on
Google user interaction with local business listings. Each
business receives a window decal with a unique QR code
that can be scanned with a phone to (for example) read
reviews or star the business as a favorite. QR reader
applications are available for a variety of camera-enabled
phones.
Brightkite is social connection application available on
several phone platforms that leverages location to
determine who is nearby. Brightkite has also been
experimenting with advertising within its augmented
reality tool.
My Mall is a mobile shopping application that aggregates
retailers. The application is available for iPhone,
Android, and Palm devices and is based on the affiliate
business model, working through affiliate networks such
as LinkShare, Commission Junction, and Google. The
application allows retailers to establish a mobile presence
at no cost by becoming part of a mobile shopping mall
through their affiliate network. The application also
drives traffic to the retailers’ own mobile sites.
3.1.5 Technology and Standards Employed
Several technologies are particularly useful in implementing advertising and marketing
mobile applications:
• ISO/IEC Standard 18004 QR codes
• ISO/IEC Standard 18092 NFC
• Location-based services
preserved.

preserved.
3.1.5.1 ISO/IEC Standard 18004 QR Codes
ISO/IEC Standard 18004 is one standard for QR codes. These codes are popular for use
with mobile phones because they are easier to read with cameras than are traditional bar
codes. They are often used to bridge the physical and on-line worlds: a camera-equipped
phone “reads” the QR code in a magazine or poster, then a Web site (identified by the
URL embedded in the code) is loaded into the phone’s browser. Mobile phones require a
QR code application to read and process the codes.
3.1.5.2 ISO/IEC Standard 18092 NFC
Near Field Communication (NFC) is a short-range communication technology that is
used by mobile phones and standardized as ISO/IEC 18092. NFC is compatible with
contactless smart card radio frequency (RF) technology (ISO/IEC Standard 14443); NFC-
enabled devices can communicate with existing contactless smart cards and readers. This
ability is often leveraged for payment and interaction with NFC-tag-equipped posters.
NFC data throughput is slower than Bluetooth’s, and NFC has a shorter range, but it
connects more quickly and is compatible with current contactless payment infrastructures
to create a better consumer experience overall.
3.1.5.3 Location-Based Services
Location based services (LBS) leverage the ability of a mobile phone to determine its
location. Location is determined either using triangulation between cell phone towers or
the GPS.
3.1.6 Benefits and ROI
Advertising and marketing over a mobile phone increase brand awareness and affinity,
but as with other forms of marketing, it is difficult to measure the ROI. The benefits of
applications that enforce an image are less tangible (albeit no less real). For applications
in which the mobile phone communicates with an in-store device, interactions can be
counted, but there is no good way to establish a direct correlation between an interaction
and ultimate conversion.
3.1.7 Implementation Considerations
Advertising and marketing applications can reside on the device, be accessible over a
network connected to a hosted application, or be implemented as a service on the Internet
(the “cloud”). Other implementation considerations are listed in Table 3:
Table 3: Advertising and Marketing Application Implementation Considerations
Consideration Implementation
Security n/a
Privacy n/a
Loss prevention n/a

preserved.
Consideration Implementation
SOA A SOA approach is often warranted so that
channels can share the same functionality.
Cloud computing Applications can be connected to a hosted
application over a network or as a service in the
cloud.
Data source Various data sources can be leveraged.
Store operations n/a
Hardware costs n/a
Application development costs Applications can be written in house, but using
one of the many available outside development
firms may be more cost effective.
Application integration These types of applications rarely require
integration with existing systems.
Ease of use on mobile device To gain mainstream use, applications must be
useful and very easy to use. No documentation
should be required.
Platform support Supporting multiple platforms is best to extend
application reach.
Customer support n/a
PLC management n/a
Software development Outsourcing development can be a cost-effective
solution.
Payment options n/a
Application type These applications can be browser-based,
message-based, downloaded, or native
applications.
3.2 Customer Service
Applications making customer service information and capabilities available on a mobile
phone enable customers on the move to obtain information from retailers. Customer
service information and functions include:
• Store locations/hours
• Wish lists, shopping lists, gift registries

3.2.1 Store Locations/Hours
A store locations-store hours application gives a consumer the ability to search for stores
nearby using a mobile device. This function offers even more benefit to the consumer
when used in conjunction with product services such as extended product information
and item availability. In many cases, what a customer really wants to do is to “find the
stores nearby that have product X in stock.”
Store location is a basic function that is typically displayed on the first screen of the
mobile application. The function is typically made available using a browser-based
application or a downloaded native application. Locations can also be shown as a map on
a smart poster, which can be read by tapping the poster with an NFC-enabled phone and
storing the received information about the nearest store locations, hours, and specials.
When security is not an issue, short message service (SMS) is the technology commonly
employed. That is, the consumer sends a text message that contains the consumer’s zip
code and receives the address of the nearest store.
Two process flows can support this function. One is applicable to devices without
geolocation or GPS capabilities (Figure 13); a much simpler one is applicable to devices
that have these capabilities (Figure 14).
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.
preserved.

Customer
StoreLocation/Hours
StoreApp
Selects
“Find Store”
Send GPS
Coordinates
Find Closest
Store Locations
Display Selected
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.
Table 4: Examples of Customer Service Mobile Applications
myStarbucks can find an open store with a drive through,
explore Starbucks whole bean coffees, find nutritional
information, and build a drink. It includes integration
with Facebook and Twitter (social media).
Using the consumer’s current location, this application
can find nearby retail stores, sorted by category, and
display maps to take the consumer right to a store.
3.2.2.1 Technology and Standards Employed
Customer service applications can use different technologies and standards, depending on
the implementation. For example:
preserved.

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