Business Research Report
Implementation of Three Technological Advances
Assessment Code: RWT1
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Date: March 10, 2014
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Table of Contents
Executive Summary 3
Introduction 4
Research Findings 5
Social Media (Foursquare and Twitter) 5
iPad Tablet 7
Square Reader 8
Recommendations 9
Conclusion 10
References 11
Executive Summary
The purpose of this report is to investigate the possibilities of an instant increase in customer traffic and expediency in payment with our rollout of food trucks. As a competitor in the mobile food industry that caters to people on the move who do not have the time for a sit down meal, we have to focus on two specifics aside from a desirable food product: awareness for the customer to know where our trucks are going to be and keeping the line in constant motion.
Within this report, I have included three different technological advances that have become widely used in the last five years that should be implemented to advance our organization to the forefront of the canteen business. All three advances are around five years in age, but have made dramatic progressions in their usefulness and purpose over the course of their existence.
With everyone on the go, the need to have access to information in almost real time is paramount in this age. Social media plays a major role in this delivery of information. People do not have time to wait for a commercial spot to come on, or necessarily see the ad in the local paper tomorrow. It’s now the time for location-based advertising and notification, targeted to consumers who would be interested here and now.
The other two technological advances of this report pertain to the ease of completing the transaction with the consumer. People do not carry cash on them to the extent that they used to and should not be punished for lacking paper currency when a simple swipe of a card will do.
Introduction
The purpose of this report is to investigate the possibilities of an instant increase in customer traffic and expediency in payment with our rollout of food trucks. As a competitor in the mobile food industry that caters to people on the move who do not have the time to for a sit down meal, we have to focus on two specifics aside from a desirable food product: awareness for the customer to know where our trucks are going to be and keeping the line in constant motion.
Within this report, I have included three different technological advances that have become widely used in the last five years that should be implemented to advance our organization to the forefront of the canteen business. The advances are: social media, mobile payment and tablet computing.
Social media – especially mobile-based – is growing more and more important in assisting companies to access target demographics versus radio, print or television commercial slots that could very well be wasted on uninterested parties. Two of the big players in social media are Twitter and Foursquare.
Twitter allows for both the usage of a promoted account and promoted tweets to target demographics based on listings. Twitter allows for the usage of searchable hashtags and trends, which will allow for customers to find out about the company based on properly worded tweets and a well-crafted profile.
Foursquare will allow for location-based check-ins where you can inform customers of your whereabouts. Foursquare also lets you create specials and deals for mayors, so that you can create a fervor amongst your frequent customers to vie for the title of mayor and be rewarded with free or discounted items.
As our society continues to move towards a paper-free lifestyle, the necessity to accept credit and debit cards for transactions is paramount to succeeding in the food truck industry. Mobile payments and the usage of a tablet computing device are at the forefront of this of this progression. The iPad tablet can be converted into a point of sale system with the addition of a Square Reader dongle and the accompanying application.
Research Findings
Social Media (Foursquare and Twitter)
Foursquare is a mobile application that allows for finding businesses and establishments based on the location service that is set up in the mobile device. It uses the GPS within the phone or tablet to discover establishments that the owners have set up in Foursquare’s database. Foursquare was founded in March 2009 and as of January, 2014 it now has over 45 million users (About Foursquare, 2014). As a user, the application allows for your friends within the application to locate where you are at the time of logging in.
As part of the application, it logs every time a user ‘checks in’ to the location and keeps a running tally for the last 60 days. The user with the most check-ins in the last 60 days is dubbed the mayor and may be entitled to the “Mayor Special. Mayor Specials are unlocked only by the Mayor of your store. Who’s the Mayor? It’s your single most loyal customer! (the user who has checked in the most in the last 60 days)” (Foursquare Specials: Which One Is Right For Your Business?, 2010). The ‘mayor special’ can range from bragging rights to discounts and/or free items.
Foursquare is completely free by default. In order to boost business, a company may create a badge specific to their store, or purchase advertising that will sit at the top of the application when a user is searching nearby locations.
Twitter is another social media application that currently has over 241 million active users (About Twitter, Inc., 2014). It allows for real time ‘tweets’ to be sent by users and to be read by their followers or any user depending on whether or not hashtags or keywords are used in the tweet. Foursquare’s API allows for Twitter to be integrated so that your check-in on Foursquare can be published onto Twitter.
Twitter is also a free application that does allow for businesses to advertise. They currently have two methods for advertising: Promoted Accounts and Promoted Tweets. Promoted Accounts will push your account to the top of the “Who to follow” list on recommendations based interests and geography. Promoted Tweets will introduce your tweets into the timelines of selected users based on their search history and trends in their timelines. The pricing for these campaigns are directly based on the activity they cause – “you’ll only be charged when people follow your Promoted Account or retweet, reply, favorite or click on your Promoted Tweets. You’ll never be charged for your organic activity on Twitter.” (Pricing, 2014).
An example of the target marketing is the following Arby’s campaign. “To reach people looking for coupons and deals, @Arbys targeted words and phrases like “#free,” “coupons” and “special offers.” Keywords like “roast beef” and “sandwich” were used to serve Promoted Tweets to people talking about Arby’s food.” (Arby's Restaurant Group, Inc., 2014). This resulted in a 45% higher click-through rate on their e-mail campaign in exchange for coupons to food at their establishments.
Social media is a necessary implementation in today’s age in order to reach a larger audience at a cost effective way. Both Foursquare and Twitter are wildly popular with individuals who find it important to keep their phone on them at all times. Both Foursquare and Twitter offer their services free of use, but you are able to upgrade to business platforms that charge based on exposure and reception from the users. Social media can make or break a company’s future, whether it’s by acquiring new customers or retaining those that you currently have. The mayorship aspect of Foursquare is a great way to retain customers by having them vie for discounts and/or free items. According to James Digby, marketing manager at TeleFaction: “the average organizational expenditure still breaks down as follows:
• 55% is on new customer acquisition
• 33% is on brand awareness
• Only 12% is on customer retention (How to Best Utilize the New Foursquare for Business, 2011). By keeping the customers to continue to come back due to specials due to loyalty programs, this will help stave off any drop off by the customer not feeling unique or special.
The usage of Twitter’s hashtag system allows for the company to immerse itself into trends by using hot phrases without necessarily having to pay for the promotional advertising. Since the advertising in Twitter is paid per reaction to a tweet, this cost could become rather cumbersome once the account gains notoriety. However, it would be a proper way to reach new customers based on interest as a starting point. The company should implement promotional advertising, but closely monitor the activity as costs could increase dramatically based on popularity.
iPad Tablet
The iPad is a tablet computer developed and sold by Apple. It currently comes in 4 models with various capacities, Wi-Fi and/or cellular data and up to 10 hours of battery life (iPad, 2014). The capacities for the iPad range from 16GB to 128GB. The device runs on all the major cellular carriers and can automatically backup via Wi-Fi to Apple’s proprietary cloud service – iCloud. The price of an iPad ranges from $299 for the 16GB, Wi-Fi only iPad mini up to $929 for the iPad Air with 128GB of capacity and a cellular radio.
The iCloud service comes with a free allocation of 5GB storage on Apple’s cloud, which allows for the backing up of data daily onto iCloud if connected to a Wi-Fi service (iCloud, 2014).
The iPad Tablet comes in a multitude of variations so that a merchant can correctly choose the size, capacity and internet connectivity service. The tablet’s operating system – iOS – connects to Apple’s proprietary cloud-based storage system daily via Wi-Fi, which allows for backing up the transactions and inventory that change on a daily basis.
The tablet acts as a much cheaper and mobile version of a normal POS terminal and - with the usage of cellular data - replaces the need for a landline which would be needed by other POS machines.
The iPad’s nearest competitor at this point in time is the Microsoft Surface, which currently does not have cellular data (iPad Air vs. Surface 2, 2013). If one were to go with a Surface 2, you would need an alternative source of internet connectivity – whether it is setting up the canteen near a Wi-Fi connection, or setting up a mobile hotspot with a cellular phone.
It is recommended to purchase the 16GB iPad Air with cellular for $629.00.
Square Reader
The Square Reader is a dongle that affixes to 3.5mm headphone jack on all mobile phones and tablets, introduced by Square, Inc. in 2010. In addition to the dongle, “Square offers a Register application that's designed to replace the standard point-of-sale registers found in today's retail outlets. Running on an iPad, the app can handle inventory, act as a full point-of-sale terminal and handle all transactions. Once a purchase has been made, it can even modify inventory levels.” (Square Is a Rising Force in Mobile Payments: 10 Reasons Why, 2013). The attachment and the software come free of charge and Square, Inc. recuperates its costs by a credit card processing fee like all other POS electronic payment transaction services.
To differentiate itself from its competitors, “Square has no setup fee, and no monthly fee, but instead charges a 2.75% transaction fee. If you do “card not present,” or a keyed-in transaction, that goes up to 3.5% plus 15 cents.” (Square slices credit-card processing fees, 2012). In comparison, “the average credit card processing cost for a retail business where cards are present is roughly 1.95% - 2%. The average cost for card-not-present businesses, such as online shops, is roughly 2.30% - 2.50%.” (Average Credit Card Processing Fees, 2011).
The Square Reader dongle and accompanying software allows for a merchant to accept mobile payments and not be fixed to a normal POS terminal. This is a vast improvement over the brick and mortar cash registers that require both a landline and an internet connection. The Square Reader eliminates the cost of expensive terminals as it is simply a dongle that plugs in to a smartphone or tablet computer. The dongle also comes with a free downloadable application that can be customized by the merchant to act as a register and a printer for a receipt. Instead of having to print receipts for customers who do not want them, a receipt can be e-mailed to the customer should they even want a receipt. This will help eliminate waste by foregoing the need to print off paper receipts.
While the per transaction fee of Square is a fraction of a percentage point higher than its competitors, it is a flat fee whereas other credit card processors may have hidden fees charged by the credit card company and/or bank – it’s all handled by Square, Inc. There is no monthly fee, nor is there a startup cost. All of the fees that are charged by Square, Inc. are straight forward and will limit the need for accounting purposes.
Recommendations
It is my recommendation that the company acquires iPad tablets, Square Readers and set up company accounts on both Foursquare and Twitter.
Social media – especially mobile-based – is growing more and more important in assisting companies to access target demographics versus radio or television commercial slots that could very well be wasted on uninterested parties. Two of the big players in social media are Twitter and Foursquare. Twitter and Foursquare reach an audience of over 200 million monthly users and these social media applications can both be geographically and interest-specific sensitive.
Both the Twitter and Foursquare accounts can be used for free and with the usage of properly edited profiles and keyword usage, interest can pique on its own. Foursquare’s location-based system will automatically update with the canteen trucks’ movements so you will not necessarily have to update the company’s website as to where a truck will be on each day. You can use the Twitter account to state where each truck will be located on each day to your followers.
The Square Reader and iPad combination will replace a normal POS terminal at a much cheaper expense. The markup in transaction fees by Square, Inc. versus other credit card processors is relatively negligible when factoring in startup fees, equipment and hidden costs. The battery life of the tablet should last through a normal shift and comes with a pay as you go cellular plan, versus a normal monthly fee. The ability to accept credit and debit cards in a mobile atmosphere will allow for persons who normally do not carry cash still have the opportunity to be paying customers, versus a ‘cash only’ business.
Conclusion
With the creation of a canteen food truck company, we need to be able to notify our customers of our whereabouts at all times and to be able to quickly process their transactions so that they can have an expedient experience to go along with their purchase from our company. The usage of social media to notify our customers of our location for the day and as a possibility to reward those who continually seek us out over competitors should be implemented as soon as possible.
The Twitter account can be used to inform those customers - who already follow us - of our whereabouts and can also be used by Twitter users who know how to search by hashtags and keywords. The Foursquare account should implement a special for the mayor to provide positive feedback to our most frequent customer and to entice other frequent customers that they are only a couple visits away from taking over the mayorship and receiving the benefits of the special offer that was implemented. Foursquare will also be beneficial for people who just search the nearby listings and see that the food truck is in a nearby location, which would – pending a positive experience – make this new customer a repeat customer.
The Square Reader - iPad setup will help speed up the payment process for those who choose not to use cash and allow for patrons who do not carry cash to order from our trucks. Should the customer want a receipt for the transaction, it can be e-mailed to them, which would help alleviate paper waste. The tablet is much cheaper than a bulkier POS terminal and the Square Reader only charges upon transactions, unlike its counterparts.
References
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