The conversations in mobile payments have largely been about ways to create faster, more secure, easier payment options. But Amit Jhas, CEO of Lucova, an in-store mobile commerce platform company, says there’s one giant missing element that hasn’t often been part of the buzz. That is, “human-centered” mobile commerce. In a recent interview with MPD CEO Karen Webster, Jhas told Webster why Lucova hones in on that “human-centered” aspect, and how it helps brands retain loyal customers by enhancing their experience, boosting brand affinity, and ultimately driving spend.
KW: We’re here to talk a little bit about what you guys do, the problems you solve for merchants who are in pursuit of their mobile commerce ambitions, and what makes your approach unique. I am going to start with how you describe your company – which I think is a very unique way of describing capabilities in the mobile commerce space. You describe it as being “human-centered” mobile commerce. What do you mean by that?
AJ: Largely, the conversation we’ve seen in mobile payments has been around faster, more secure and easier payment options. In some cases, it has also been about trying to enhance the experience between the customer and their mobile device. In contrast, we focus ourselves around the relationships between the customer and the merchant. We’re drawn to the human element and behavior that occurs during that transaction with that loyal customer. We’re more interested in what makes that customer loyal, how you retain that loyal customer, and how you give that loyal customer a better experience.
KW: So let’s get practical and tactical. Describe to me what you mean by that. What is the experience that a consumer that has a relationship with a Lucova-enabled merchant has?
AJ: At the very core of what the merchant is able to do is identify their customers when they arrive, without that customer having to pull out any of their devices to identify themselves. We believe since that customer is identifying with that brand by engaging that brand’s mobile application, it is important that the reciprocal occurs in-store, where the staff recognizes their loyal customer upon arrival. In fact, they could take this a step further and pull their customer’s data in real-time to provide a more personal experience. Our solution leverages Bluetooth to do this in a hidden and seamless fashion. Today’s Bluetooth does not require the archaic “pairing” of devices and we take advantage of this.
KW: So when you say it leverages Bluetooth, does that mean beacons?
AJ: In one sense, it does mean beacons. However, beacons communicate and push messages to their customers, so we’re careful about using the term “beacon.” We use Bluetooth in a way that we can have the customer identify themselves to the merchant without having to do anything on their phone. That opens up a world of possibilities including truly frictionless mobile payments, redemptions and personalized engagements. We believe it’s more than just sending a push notification to a phone as beacons are known for today.
KW: So if I am a consumer that is walking into an establishment that’s taken advantage of your capability, do I have to have an app on my phone in order for this to take place? How does it work?
AJ: Today, brands are engaging their customers in digital channels and mobile is an important component to enhancing the digital and in-store experience.
Our solution was developed to function inside those mobile apps, knowing that their loyal customers will download them because of brand affinity. As long as that branded application is running in the background of their customer’s device, our solution does its magic.
KW: Now you describe your platform as being fully integrated. I assume that means you are connected to the POS in some way, right?
AJ: Yes. So the challenge we’ve seen in our conversations with brands is that their existing infrastructure needs to be leveraged. It is very difficult to go in there as a standalone solution and be able to provide all of the tools necessary for a brand with their existing infrastructure if you’re not integrating.
When we began, we built our tools from the ground up with that in mind. All of our solutions have plug-ins that are developed, and we integrate with the majority of infrastructure that currently takes place both on the POS side and payment processing side.
KW: So do you have any case studies or metrics that you can share that really speak to some of the ROI that Lucova’s merchants have experienced when they’ve implemented your solution?
AJ: We’ve seen several interesting pieces of data emerge last year in our rollout with several clients. On the quick serve side, we’ve seen a double-fold increase in the basket size and 2.5x increase in the frequency of visits after just 6 months. We surveyed these customers and we learned some interesting things about them. First, they were loyal customers of that brand. They had memorable experiences that they could speak to about staff engagement, whether it was a product or a staff member they remembered. But it all correlated back to an event that they recalled where they were identified when they arrived. That whole experience had a positive impact on them.
We thought that basket sizes might be increasing because of more products being sold, but in fact it was due to customers bringing colleagues to this location. So they were spending more, and also introducing their relationships to this brand.
We thought that was very interesting, and it correlated down to that “human-centric” experience.
KW: I was going to ask you whether the experience on the part of the merchant was with customers they already had, or whether this was responsible for bringing in new customers. You touched on that a bit, but do you have a sense of whether what merchants are getting is truly incremental, or is it providing a new way for a merchant to communicate with a customer they already have? That’s always one of the hardest things to prove in these sorts of situations.
AJ: That’s a difficult place to collect the data. Another way to look at the question is, if you were to focus on the challenges of building a better experience for your loyal customer base, how would you go about doing this? For small businesses, it might be easier for them to remember or recognize customers. To scale this for larger enterprise chains is much harder to do. The data is clear that ignoring the loyal customer is much more costly than to acquire new customers. This translates directly to the top line revenue. So the risk of not doing it is much larger than leaving it as status quo.
KW: That’s a fair point. So there is an opt-in nature to this application, right?
AJ: That’s correct. We’re about more than just mobile payments so consumers have an option to use their mobile app as a payment method, but the branded application could have a lot more features. We offer a 360 in-store CRM solution which includes loyalty, data analytics and campaign management in addition to payments to help brands offer that seamless, enhanced experience for their loyal customers.
KW: So how do you solve for the security and privacy of customer data?
AJ: We look at security as two fundamental questions. The first question is, “Are the customer and the merchant close enough in proximity that a legal transaction is occurring?” With cash, it’s fairly easy to do that. With credit cards, there may be an extra step. But with mobile device technologies, you’re left with three technologies today: the QR code, NFC, or a cloud-based function. We decided to build a new solution focusing on Bluetooth by creating proximity zones. The second question is, “Is the cardholder the person presenting the device to the merchant?” While others might be using different forms of technology, we focus on the cardholder’s image or “selfie” to further identify the user. These are some of the many security steps we take to reduce fraud and chargebacks for mobile payments.
From a customer data perspective, we adhere to industry best practices and never store any cardholder data. Rather, we leverage secure tokenization tools available from the payment processors we work with.
KW: What does the merchant have to do to take advantage of this? Is it difficult to get setup and connected?
AJ: We are working with a select group of clients today and so it starts with a conversation. We’re looking for brands that are forward thinking and believe in a more human-centric relationship with their customers. Our existing plug-ins make it easy to launch and scale without the fear of integration and IT support.
KW: So is this a couple of days, weeks, or months to get started?
AJ: It all depends on what the goal is. If it’s leveraging our platform to collect initial data within a segment of your stores, we can have you live with your own branded app, a dashboard with real-time customer and transaction data and instant proximity-mobile push messaging within 4 to 6 weeks.
KW: So it sounds like 2014 was a great year for you to get some important brand and merchant relationships under your belt. What does 2015 look like?
AJ: We are constantly learning about the behavior of the loyal customer and this year we are excited to be working with some major partners and clients to showcase some unique in-store experiences.
Amit Jhas is co-founder and CEO of Lucova Inc., a startup focused on humanizing the in-store commerce experience to drive stronger brand affinity, higher average spend and increased customer visits for retailers. Lucova’s Behind the NameTM technology provides the world’s first secure Bluetooth mobile payments, customer relationship and mobile marketing platform designed for marketers and scalable with existing in-store infrastructures.
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