Mcart - Mobile Shopping Solution

m-Cart - A look at the future of shopping

The purpose of this document is to show case an end to end solution for providing Mobile Commerce
in the retail industry.

Naval Vithalani
1/23/2011

m-Cart - A look into the future 2011

TABLE OF CONTENTS

SECTION 1. EXECUTIVE SUMMARY ....................................................................................... 4

1.1 Issue ............................................................................................................................. 5

1.2 Anticipated Outcomes.................................................................................................... 5

1.3 Recommendation .......................................................................................................... 5

1.4 Justification ................................................................................................................... 5

1.5 Assumptions.................................................................................................................. 5

1.6 Limitations ..................................................................................................................... 5

SECTION 2. PROBLEM DEFINITION ....................................................................................... 6

2.1 Problem Statement ........................................................................................................ 7

2.2 Target customer and Constituent Environment .............................................................. 8

2.3 Current Technology Environment................................................................................... 8

SECTION 3. SOLUTION OVERVIEW........................................................................................ 9

3.1 Software Description ....................................................................................................10

3.2 Goals and Objectives ...................................................................................................10

3.3 Performance Measures ................................................................................................10

3.4 Challenges to the solution ............................................................................................10

SECTION 4. PROPOSED SOLUTION.......................................................................................11

4.1 Couch Shopping ..........................................................................................................12

4.2 Identifying Customer – Location Based Services ..........................................................13

4.3 Scan Product Barcodes ...............................................................................................14

4.4 Social Network.............................................................................................................15

4.5 Add products to the Shopping Carts and Checkouts .....................................................16

4.6 Recommend Products .................................................................................................16

2
Author - Naval Vithalani
Email – tonaval@yahoo.com M – 0091- 9962- 531- 120


4.7 In Store Checkouts ......................................................................................................17

4.8 Self Checkouts ............................................................................................................18

4.9 Home Delivery Model...................................................................................................19

4.10 Pick up Area Model ....................................................................................................20

4.11 Payments ..................................................................................................................21

SECTION 5. MARKETING STRATEGY ....................................................................................22

5.1 Introduction..................................................................................................................23

5.2 Splash and Exit Screens ..............................................................................................23

5.3 Product Recommendation............................................................................................23

5.4 Video Advertisements ..................................................................................................23

5.5 Advertisement Insertion ...............................................................................................23

6.1 Architecture Overview ..................................................................................................25

7 OPERATIONAL STRATEGY .............................................................................................26

8 FINANCIALS .....................................................................................................................26

9 CONCLUSION ...................................................................................................................27

9.1 Not Acting Is Not an Option ..........................................................................................27

10 CONTACT AND LEGAL INFORMATION...........................................................................28

3


SECTION 1. EXECUTIVE SUMMARY

4


1.1 Issue

The inability of retailers to tap into the ‘Impulse Buying’ of customers.

1.2 Anticipated Outcomes

This project aims at providing our customers with a new way of using mobile telephones to shop from
the comfort of their homes or in store. The approach is to give them the control of events. This also
helps the businesses in intelligent assortments and lower operational costs.

1.3 Recommendation

We’re proposing two types of software, a mobile application that runs on any java enabled telephone or
an iPhone that instantly updates data to the central server and the server software that receives the
information.

1.4 Justification

This project is the best in its kind, especially in the retail arena where the ever decreasing margins are
the biggest challenge to the retailer in a world of discount hunters.

1.5 Assumptions

A customer who would like to buy products from a retailer or even view the recommendation or reviews
of a new product / service being introduced by the retailer. The idea is to tap into the impulse purchase
of the customers by providing them the option to shop from the comfort of their homes. The total cost
of transaction is reduced as fewer in store over heads are required for this business model.

1.6 Limitations

The major function of this software is provided by mobile devices. It would be better if the application
were to be run on newer smart phones but in order to tap into every segment of the market the
proposed solution is in J2ME, Android and iOS.

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SECTION 2. PROBLEM DEFINITION

6


2.1 Problem Statement

Profit as taught in any business school, is basically an outcome of trade between individuals wherein
products and services are exchanged at a price. For any company to achieve growth and in turn grow
there has be to a qualitative increase in profitability and margins.

As the mobile phone becomes something more than just a communication device the future never
looked better for the bricks and mortar retailer.

With the advent of smart phones across the world and the newer version which could someday replace
the good old PC most of our time is taken up by this device.

The opportunities are immense as retailers move to the mobile platform; this even gives them an
opportunity to bypass the ecommerce platform. The new rule of the
retail world is ‘Adapt or Perish’.

It wasn't a long ago that we used to pay a premium to make a voice call
and the only display you had on the handset was big enough to show you
the number that was being dialed.

But in the past decade, mobiles have gone from being a communication
device to being an integral part of our lives from communication to
location services to shopping.

The next 3 years mobile is where most of the business dollars will be invested. This market presents a
unique chance to businesses to get on the growth trajectory.

When ecommerce started up, many people dismissed it as a passing fad saying who will buy goods
online. Today some of the online retailers like Amazon are bigger than many of the traditional retailers.

Similarly today mobile is providing another opportunity to the business world to get on to the growth
trajectory. The past few years have been tough across the world and people have by nature become
'Discount Hunters'.

Retailers have harnessed the power of social media by providing consumers mobile apps that allow
them to scan a barcode with their phone’s camera and share product information with their friends
through social media. But all that sharing of information does not necessarily result in increased dollar
collections. At times a question also pops up is social media going the spam way. In 2yrs from today the
landscape will be quite different.

The benefits of taking this approach are quiet and the rate at which the industry is changing it will not be
a surprise when people just get tired of the likes and recommendations that social networks offer. Will it
be the next gen spam I don’t know but smells a wee bit like that hence the approach of this paper has
been to highlight how mobile will change the way we shop and not on the social side of things.

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2.2 Target customer and Constituent Environment

Each stakeholder/customer is related to the solution as follows. Each line shows a customer and the
relation to the project

Stakeholders/Customers Description / Examples
Multi format retailers
Discount retailers Wal-Mart, Kmart
Specialty stores / Boutiques Walgreens,
High end fashion labels Armani, YSL, LVMH

Below is a list of processes and/or services that would be modified or automated by this solution

Processes/Services Description of Modifications/Automation
Ordering Customers can shop from the comforts of their homes
Order Processing Retailers can process customer orders more efficiently
Product Information Customer, Manufacturers and Retailers can engage in product discussions
Store Inventory Retailers can reduce the cost of carrying inventory by servicing most orders
straight from the Distribution Centers and achieve lower store shrinkage
Store Loyalty Retailers can reduce the costs of running a loyalty program by taking advantage
of the mobile phones. This helps in getting rid of expenses like card
management etc.
Store Payments Retailers can increase cash flow by issuing ‘Pre-Paid’ cards to the customers and
accepting the same via a mobile payment. Hence keeping the costs of
operations, fraud down and in turn getting interest free money.

2.3 Current Technology Environment

Today retailers have successfully integrated the Point of Sale data with an ERP solution but are still
facing challenges on how to use the data or how to get that extra percent of profit or how to tap into
the customer’ impulse buying.

Retailers now have the ability to integrate very tightly with their consumers by sharing data. At the same
time, the POS store systems provide a comprehensive view of customer data, sales history, inventory
management and product availability.

By linking these previously disconnected aspects of retail technology, devices and store systems can now
“talk” to each other to easily identify customers their requirements, stock in hand as a result leading to a
more well-rounded and efficient selling experience.

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SECTION 3. SOLUTION OVERVIEW

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3.1 Software Description
“mCart” is a software program that uses any J2ME, Android and iOS enabled mobile devices to instantly
provide the customers with a shopping experience never experienced before.

The program is composed of two parts: mCart Client which runs on any J2Me, Android and iOS enabled
mobile telephone. mCart Server which runs in the data centre, this indentifies the customer’s handset
make, delivers an appropriate client application, stores the ‘mCart’ information and integrates with ERP,
Loyalty, Coupon Management, Payment system and Point of Sale systems. mCart is one application to
meet all the shopping needs of an individual customer.

3.2 Goals and Objectives

The goals and objectives listed below support our business needs

Business Goal/Objective Description
Impulse buying Tap into the impulse buying of customers
User friendly The mobile application presents the buyer with a simple to use 3 clicks
buying option.
Increase sales By tapping into the mobile commerce market, the business is opening
up another channel to tap into.
Share information Share accurate information with the customers and with the
manufacturers
Publish Information Retailers can tap into the active social network arena with customer
sharing information about their buying, likes and dislikes.

3.3 Performance Measures

Key Process / Services Performance Measures
EDGE / 3G Share information on ‘mCart’, ‘wish list’, reviews, track order status in
seconds.
Server The back end server is strong software that is capable of linking all the
results of queries, record updates and integration.
Loyalty Recording customer behavior even when they are not interacting with
the Point of Sale systems.
Point of Sale Sharing customer information with every touch points.

3.4 Challenges to the solution

The major challenge for the success of the proposed solution is the dependency on the mobile network
processes and/or services will be affected by the non availability of mobile network signal.

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SECTION 4. PROPOSED SOLUTION

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4.1 Couch Shopping
Sitting at home, customers can shop directly from their mobile phones. The customers get all the
benefits of shopping from their armchair similar to e-Commerce but it goes one step further, mobile
gives them the all alluding mobility. The opportunity to walk around the house, sit in a pub or lie by the
beach the consumers can now shop without worrying about the extra power supply for the laptop or
net connectivity or without having to carry around one extra piece of bag all the time.

Customers can either download an application that will have a preloaded catalogue or the application
can come with a basic product catalogue hierarchy where in once the user drills down to the category
the relevant product details are downloaded. The benefit of doing this is that the user does not have to
wait forever for the application to be downloaded in the first instance. This is more based on the
request model.

The customer can select the products, read the reviews
of the product and also view the social networking
information about the products. Once the customer is
convinced about the product they can add it to their “m-
Cart”. In case of home delivery or a collect at store
model the customer can also specify their preferences.

Customer can also create a wish list of products which
over a period of time can be pre-populated with the
products that are bought most of the time by the user.
The wish list can also be used as the starting point for
the ‘in-store’ shopping. The wish list can be used to
transfer items from the wish list to the “m-Cart”

Once the customer has added the products to the m-
Cart, they can go to the check out for making the
payments. Once the payment is made the order is
transmitted from the mobile to the central server.

A transaction ID is generated and the same is sent to the user. The user is also intimated about the
expected time of delivery by the central server. The cash memo is generated and pushed to the handset
for records. Historical records can be pulled on request by the user giving a date range.

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4.2 Identifying Customer – Location Based Services

Using the power of LBS, the retailer can entice customers by offering them information when they are
close to the store. The information can be about new product launches, promotions or events or can
even be mobile coupons that customers can redeem when they shop.

The customer is identified the minute he/she walks into the store using LBS.

The mobile up automatically pull s all the relevant promotion details and coupons for the customer once
he or she enters the store or as a regular update of the application.

Mobile Coupons are pushed to the customers as they enter the store.

Another aspect of mobile based coupons is the benefit is offers in terms of special events like first time
buyer or if based on a predictive model the customer is identified as the most likely to go away from the
store to push a coupon to bring them back in.

This also helps in reducing the costs involved in maintaining physical coupons and loyalty programs cost
less cause many of the costs are taken away.

13


4.3 Scan Product Barcodes

With the facility to scan a product bar code, the customer can be informed about the product benefits,
reviews or even the promotions that are valid for that product.

Customers can view product details while they are in the store by scanning the QR/Barcode of the
product. While adding to a cart the customer can also be updated on the available quantity at that store.

Customers scan a product barcode to check reviews and product information.

QR Barcodes can be used for engaging the customers with a layer of gaming involved during their
shopping trips or in collaboration with some vendor run an information campaign or a lucky draw or a
special promotion.

This is the best point in the sales cycle to show the customer more information about the product like
reviews from other users or even from their contacts on the various social networks. This creates the
sense of ‘keeping up with the Joneses’.

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4.4 Social Network

Today the amount of information that is exchanged between the users and their connections is so huge
that at times social network becomes a major ‘spam’ for users and turns them off. How many times
have we hidden posts from users either cause they are so frequent or have altogether hidden posts
from a particular user? We’ve all done it.

Hence the belief that in the next 2 years we will see users go off social network as they get tired of the
‘spam’ effect of it and to maintain their privacy.

The current social marketing as we know it today will be considered spam.

Imagine a scenario wherein you walk into a store and scan a barcode for a product. It makes sense to
provide information only at that time – give the user an option saying ‘See what your connections say
about it’. Only if the user wants to see what the connections have to say about the product search the
data warehouse to provide the information. It’s like if I don’t own a dog, what good is the information
on dog food to me?

The way forward for social network marketing will not be round the clock information sharing, it will be
wherein the users will ask for an option to view what their connections have said about a particular
product or service.

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4.5 Add products to the Shopping Carts and Checkouts

Imagine walking into a store and browsing products whether they are pure home delivery products or
OTC products. All you have to do scan the bar code of the products you want to buy as you walk along
the shop floor and add the quantity while loading up your shopping cart.

Add products to a shopping cart

Another feature of the application is to provide directions to the aisle, how many times we’ve roamed
around the super market lost trying to find out where the Scottish shortbread is stocked. Providing
location is a very attractive feature for any store can provide.

4.6 Recommend Products

The biggest lost opportunity to cross sell or up sell is when the customer chooses a product and adds to
the shopping trolley. If at that time the retailer can recommend products to the customer based on
affinity analysis it not only adds to the customer’s pleasant experience but also added to the ticket
value. This also helps the business to move the customer up the value chain and can also be used to shift
consumer behavior towards a particular brand - possibly own label or a particular new product.

This approach helps to cross sell and up sell products to the consumers.

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4.7 In Store Checkouts

A normal scenario is where the customer takes the trolley to the checkout and the cashier has to scan
each and every article. The cashier ends up spending close to 10 precious minutes scanning all the 100
products from your trolley. These 10 minutes would have stopped some customers from walking away
without buying.

Wouldn’t it be better if the only thing a cashier needed was the m-Cart ID, the cashier enters the cart ID
at the point of sale. The point of sale in turn talks to the mobile server and requests the m-Cart. The
central server authenticates the request and sends the cart details with the product and quantity
details.

The only thing the cashier needs to do is take the payment from the customer thus reducing the billing
process to seconds instead of minutes.

Point of Sale retrieving the Shopping Cart details for billing.

The approach also helps reducing costs for the retailers on two fronts - since billing only takes seconds
instead of minutes fewer cashiers can service more customers hence the requirement for cashiering is
less.

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4.8 Self Checkouts

Similar to a manned checkout, the self checkouts can also reap the benefits of a mile based purchasing.

Self checkout

Once the shopping cart ID is entered, the store knows that this transaction belongs to a particular loyalty
member hence the need to scan or swipe a loyalty card is taken away. This works for either a manned
checkout or a self checkout.

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4.9 Home Delivery Model

The approach works for the home delivery model as well, wherein the customer walks into a store and
adds the products to the shopping cart. As the customer walks with his/her mobile phone, he / she
keeps on scanning barcodes and entering the required quantity against each one of them thus creating
an m-Cart.

Once he/she is done with the product selection, they can checkout. Based on whether it’s a manned till
or a self checkout, the cart id is entered to retrieve the cart details and the payment is made.

The benefit to the retailer is – reduced in store inventory as at any given time, the retailer needs to
display only one unit of every product. This also reduces the costs in terms of the number of people
required in the store to maintain all the aisles.

This also helps reducing costs for the retailers since billing only takes seconds instead of minutes fewer
cashiers can service more customers hence the requirement for cashiering is less.

Customers can scan products and add them to cart for home delivery

19


4.10 Pick up Area Model

The approach works for the home delivery model as well, wherein the customer walks into a store and
adds the products to the shopping cart. Now the customer walks with his/her mobile phone and keeps
on scanning barcodes and entering the required quantity against each one of them.

Once he/she is done with the product selection, they can checkout. Based on whether it’s a manned till
or a self checkout, the cart id is entered to retrieve the cart details and the payment is made.

Once the transaction is closed the same is transmitted to the packing bay for the products to be picked
up and packed. The customer is advised to proceed to the pickup bay and present his/her transaction
receipt to take delivery of the products that are ready and packed. The pickup area can be a drive in kind
of facility there the car can be parked closer to the pickup area and goods loaded.

Customers waiting to pick up their purchases

The benefit to the retailer is – reduced in store inventory as at any given time, the retailer needs to
display only one unit of every product. This also reduces the costs in terms of the number of people
required in the store to maintain all the aisles.

This also helps reducing costs for the retailers since billing only takes seconds instead of minutes fewer
cashiers can service more customers hence the requirement for cashiering is less.

20


4.11 Payments

All the payments are processed either using NFC or traditional Credit or Debit cards or using m-Wallet.
Once the transaction is paid for, the data sent from the mobile application to central server / store
server.

Near Field Communication - a short-range high frequency wireless communication technology which
enables the exchange of data between devices.

Mobile Wallet - The consumer uses the mobile billing option during checkout, the consumer's mobile
account is charged for the purchase.

Mobile Web Payments - The consumer uses web pages displayed or additional applications downloaded
and installed on the mobile phone to make a payment

Online Wallet – Like Pre-paid cards, where customer ‘tops up’ their account before using it for making a
payment.

21


SECTION 5. MARKETING STRATEGY

22


5.1 Introduction
For further information please contact Mr. Naval Vithalani.

5.2 Screens


5.3 Product Recommendation


5.4 Video Advertisements


5.5 Advertisement Insertion


23


SECTION 6. PROPOSED ARCHITECTURE

24


6.1 Architecture Overview

Proposed Architecture

25


7 OPERATIONAL STRATEGY

8 FINANCIALS

26


9 CONCLUSION

9.1 Not Acting Is Not an Option

As the global economic environment gets difficult, retailers are going to be involved in a very vicious
fight to gain the extra dollar out of the consumer’s pocket. This need to keep up with the customer’s and
street expectation where the margin are decreasing a newer way have to be found to stay competitive.

Retailers are under increasing pressure and any failure on their part can result in the losing out. While
the 1990s were where the retailers streamlined their businesses and moved online. The current growth
in mobile technology has opened up a whole new world of opportunity.

The benefits of taking this approach are quiet and the rate at which the industry is changing it will not be
a surprise when people just get tired of the likes and recommendations that social networks offer. Will it
be the next gen spam I don’t know but smells a wee bit like that hence the approach of this paper has
been to highlight how mobile will change the way we shop and not on the social side of things.

The options are very clear for the retailer – Adapt or Perish.

27


10 CONTACT AND LEGAL INFORMATION

This document is the Property of Naval Vithalani and any use, reference, representation or citation
without the written consent of the author is prohibited.

The document is written to express Mr. Vithalani’ views on the current and the future trends in the
Mobile retail technology. The purpose of this document is to explore opportunities of working in the
enterprise mobile applications arena.

Email – tonaval@yahoo.com

Mobile – 0091-9962-531120

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