The Starbucks Way

Starbucks has just announced the launch of mobile payment in all U.S. Company operated stores, allowing customers to pay for in-store purchases with select smartphones (Blackberry, IPhone and IPod Touch). This is the largest mobile payment program in the US and, according to Starbucks, the fastest way to pay there. To do that, you only need to download a free Starbucks application on your smartphone; that is if you are among the 75% of Starbucks costumers who have a smartphone. Then you can pay with your smartphone by holding it in front of a scanner on the countertop and scan the Starbucks Card Mobile Application on-screen barcode to make the payment.

 

Even if the idea seems attractive, I don’t see how this new application would be faster or easier than just paying with cash or a debit card. Those customers will still have to wait in the line, order their drinks and then scan the bar code appearing on their smartphone. Also what if there are some problems with the Internet connection or the phone itself? This doesn’t seem to be a very reliable way of payment… If you think about it, how many times has your phone failed you? Also you need to consider all the issues regarding personal information privacy. You don’t know for sure where all the information entered on your phone application can go and how easy it can be obtained from other people. All this considered; I doubt that this new application will be useful, even for the Starbucks advocates.

Music Piracy in France

Almost everybody in our generation has either downloaded or shared music on the internet; this is not news. Different governments around the world have tried to come up with legal measures to counter music piracy. Most of those measures however, are not effective and do not stop people from downloading music.

In France the government passed the final version of the HADOPI law in October 2009 as a means to encourage compliance with copyrights issues. A government agency with the same name was also created that year. The way the procedure works is quite interesting; it follows three steps. If it is found that you have downloaded music illegally on your computer, the agency will send you an email with the time of the claim. If you are repeating the offense you will receive an official letter within the next six months with similar information. However if you continue your internet connection will be stopped, from two months up to a year; in the mean time you will still have to pay for the connection and for other fees.

Is this working? According to many people in France, the answer is no. The fist reason is that the law is difficult to implement and it is difficult to keep track of all the connections and downloads. The second reason is that there are always going to be alternative ways for people to download music; and the websites will find a way to get around it. This example makes it hard to believe that legislation can keep up with technology regarding music piracy issues.

Issues with Online Privacy

More and more people surfing on the Internet are now worried that their information is being tracked, used and shared without being aware of it. Often the information of an individual is being used by marketers so they can more efficiently target their advertising to each person, by studying their habits and behaviors. But how can this be controlled and regulated?

The Federal Trade Commission came up at the beginning of the month with a framework of recommendations to protect consumer's privacy on the Internet. According to the report made by the FTC, data is sometimes collected in an unclear and irresponsible manner. The FTC is calling for more ''reasonable'' security, access and procedures; but what would ''reasonable security'' mean in that context? When reading the proposal it seems that first the FTC is only focusing on current issues and not projecting into the future; but mainly from my point of view none of those recommendations are really going to solve the problem.

One interesting recommendation brought by the FTC is the creation of a Do-Not-Track option; which would allow the consumer to refuse the collection of their information for targeted marketing. Even if the idea seems attractive, I don't believe it would necessarly be a good idea. First does that really mean that your information will not be used? This would be hard to believe. Also are companies going to be willing to follow this recommendation, considering the potential for sales increase using behavioral marketing? Ideally, there should be a compromise between the consumers and the companies on this issue, where there would be more information protection for the consumer; but also enough information available for the companies to operate effectively.

Groupon Better Off Alone?

Groupon, a ''deal of the day'' website with growing popularity has just reportedly rejected a $ 6 billion offer by Google. It's CEO Andrew Mason is obviously aiming to a higher level of achievement and maybe wanting to follow the steps of Facebook, who also rejected acquisition offers in the past and is now worth $ 40 billion as an independent company.

According to Forbes, Groupon is amazingly the fastest growing company ever, accumulating $1 billion in revenues before its second year of existence. The company has proved to everybody that it is viable and very profitable as a business model; it has been able to attract more costumers than its competitors (LivingSocial being the main one); and in a continuous way. Groupon was able to acquire and maintain a strong brand name; which is one of its most powerfull assets. 

Refusing a $ 6 billion offer by Google might seem to be a risky bet from Groupon; especially considering the growing number of possible competitors in the market. However, this clearly shows that Mason believes in the potential of his company and has greater expectations than its competitors.

Groupon's choice to stay independent is from my point of view a great and exciting bet, especially if they continue growing at a similar rate; but they will have to find ways to stand out even more from their competitors if they want to stay on top.