Savvy Farm Promotion, Made Simple

On a recent farm marketing tour a group of growers were able to experience the gamut of retail farm marketing from large corporations that incorporate small market aesthetics to small markets making full use of the mobile and internet tools available to them. 

Giant Eagle's apple display signage

One large corporation, Giant Eagle Market District in Pittsburgh, is taking marketing back to its roots.  Utilizing hand-painted signage and displays that look like I could put them together in my garage, they were able to take what sounds like a rustic set-up and make it eye-catching and even beautiful. Their store displayed a large variety of national brands, local produce, and locally made value added products such as baked goods and sauces all in one convenient location for the consumer. Cues can be taken from their straightforward signage and grouped display stations that dominated the store, making it easily navigable for customers. 

Peach display at Giant Eagle. Notice the inclusion of pie-baking supplies.

On the flip side we visited a family farm, Covered Bridge Gardens, in Ohio who is utilizing cutting edge technology to get the word out to their CSA and farmers’ market customers. In addition to their slick looking website linking their Facebook page, blog, and e-commerce site, the farm is in the initial development stages of an app for smartphones.  This app will alert their CSA customers to surplus produce or changes in their pickup schedules.  It will help customers find them at area farmers markets, link to their online store on their website and make every part of their business literally available at their finger tips.  With the trend of smartphone users to utilize their devices more for social media and web surfing rather than for simple calling, transitioning to an app is a logical method for Covered Bridge Gardens to reach their customers in the way that is most convenient for both parties.

In discussion after our groups visit to Covered Bridge Gardens, a tour attendee brought up a good point.  If you are unable to be lucky enough or willing to pay the money for the development of your own farm app, a great way to replicate some of the functions is through the use of QR codes.  Many area markets are starting to add these codes to their value added product labels, door stickers and the backs of their business cards.  When incorporated correctly, meaning printed in a clear and easy to identify fashion, these codes can be used as another quick methods to direct customers to your website.  Especially useful if your site offers an e-commerce shopping section allowing customers to make purchases directly on the web. Just think if you pick up a jar of your favorite spicy gooseberry jelly at a market while traveling and was savoring the last bits at the bottom of the jar.  Wouldn’t it be nice to scan a quick code from the back of that jar with your phone as you savored your last mouthful and be instantly directed to a site where you could order more?  I think this sounds downright delightful, and delicious!

For more information on QR codes, straightforward signage and displays for your market, or technology based marketing options for your business check out the Ag Entrepreneurship Team’s past blog posts.  Here are a few of my favorites:

What's that square? Using QR codes for marketing

Best Practices for Farm Market Vendors - signage and display tips

Why Mobile Payment Systems Might Work for Your Business

This post comes from the newest member of Penn State Extension's Ag Entrepreneurship Team, Carla Snyder. Carla is the Ag Entrepreneurship/Marketing educator in Adams County, PA.

Why Mobile Payment Systems Might Work for Your Business

Much has been written about mobile payment options and if you read any articles about this topic you find that one or two companies dominate the discussions; however, the list of businesses creating readers/apps/programs continues to grow.  Though not an exhaustive list, this article compares 19 of the currently available readers, such as Intuit GoPayment, Square, and Flagship ROAMpay (http://tinyurl.com/cq7t4r5).  

What equipment will you need?

For most basic operations you need at least one of the following:

• Smartphone (e.g., 3rd generation iPhone running iOS 4.0 and higher, Android phone running 2.1 and higher, Blackberry)
• iPod touch (2nd generation and newer running iOS4 or higher), or 
• tablets (e.g. iPad and Android).

Others systems allow the business owner to expand their functionality when additional devices are used.  Square, for example, provides a card reader for “anywhere” payments but also turns iPads (running at least iOS5.0) into a Square Register with an additional app (squareup.com/register).   Do a thorough investigation of each reader you are considering.  Some are compatible with Android phones and/or Blackberry while others are not.   

Readers for swiping credit cards 

With credit card terminals already using card swipers to process payments, many businesses may feel the most comfortable investing in a mobile payment system that uses a similar type of tool.  

The most common type of reader for swiping cards is a “dongle” that plugs into either the headphone jack on a mobile device (for example, Square) or plug into the iPhones and iPads charger port (for example, Eventbrite, http://tinyurl.com/77bvczo).

Groupon has recently entered the market and instead of offering a dongle the company has decided that a wrap-around case as dongles could potentially snap off (http://tinyurl.com/6mhdlp6). Other systems with a wrap-around style include Mophie (http://tinyurl.com/26or6oy), and Chase Paymentech (http://tinyurl.com/7yd5dlz).  Yet another variable you’ll need to consider when selecting the right system for your business.  

Payments made with smartphone apps 

Google Wallet, which works with Android phones, has been around for about a year.  This mobile payment app first requires users to link their account with a Citibank MasterCard or load a Google Prepaid Card using any other credit card.  When at the store, customers “tap” their phone against a near field communications (NFC) reader/credit card terminal. (Apple recently announced that a iOS 6 Passbook will app is in the works, http://tinyurl.com/cq3ut82). 

More recently, FaceCash has emerged onto the mobile payment scene.  Instead of matching a customer’s signature with that on the back of their credit card to verify a purchase, “merchants use FaceCash to verify that [the customer’s] real face matches a digital image linked to [his or her] account” (https://www.facecash.com/).  

Like many other systems, customers activate their account prior to shopping.  During the registration process customers link their account with their checking or savings account (users also have the ability to load their card with cash at retail locations where FaceCash is used) and upload a government-issued photo (driver’s license or passport).  When at the retailer, customers tap their phone against the NFC reader or businesses use a CCD Barcode Scanner to scan the barcode on the customer’s phone and then compare the image in the FaceCash system with the person making the purchase.  FaceCash also allows the user to load loyalty program cards (e.g., airline frequent flyer accounts, supermarket frequent purchaser cards) which can be scanned at checkout.  A video that provides an overview can be found at: http://vimeo.com/17175906

Other payment options

PayPal is more recognized as a payment option for consumers who want to make online purchases without supplying their credit card number.  Instead, consumers authorize purchases at websites offering this option using their email and PIN number.  In 2011, PayPal had over 100 million active accounts worldwide (http://tinyurl.com/6leeyre).  

At least one home improvement store has implement PayPal as a payment option for customers.    In addition to using a card reader to swipe credit cards and accepting checks via the mobile device’s camera, businesses can process payments by asking customers to enter their telephone number and PIN on  the credit card process terminal. 

Comparison of costs for retailers

Transaction fees and other costs are likely to change as this technology becomes more widely used and as more competitors enter the marketplace.  Remember that you will need to consider the costs for processing each type of credit card you honor (can range from 1.74% to 3.7%), as well as whether there is a per-transaction charge (can range from $0.10 to $0.30).  

How might these fees add up during an average month and what might you expect to save annually?   Consider using websites such as http://tinyurl.com/cs4fwf4.  The site allows users to enter an expected monthly revenue, select whether credit cards are processed by swiping or being keyed-in, and see estimated costs for several different brands of mobile readers. 

Another question to think about: Based on your average customer transaction size – will one system provide more savings than another?

According to an article written about Groupon’s mobile payment system (1.8% transaction fee [2.7% for American Express] and $0.15 per transaction) compared to Square (2.75%  transaction fee but  no per transaction charge), Groupon’s system might be a better choice for sales greater than $15 while Square would cost the retailer less than Groupon for sales less than $15.00.  

An example that shows how these transaction fees impact sales: “On a $100 Visa transaction, Groupon would charge $1.95 vs. Square’s $2.75. That’s a 41% premium for Square” (http://tinyurl.com/6ncbxbn).  

Do this comparison for yourself based on common sales transactions you process.  With several variables to consider, including how you would prefer customer to “pay” for purchases, take the time to investigate several systems to find the best one for your business.  

Why You Might Want to Consider Offering Mobile Payments

Last week, I was at a restaurant where the serve took our order on her iPhone, swiped my credit card through a reader attached to an iPad, rotated the iPad screen toward me so that I could enter a tip and sign for my transaction using my finger, and asked me if I wanted a printed receipt or one emailed to me.    

The email receipt I received

Now, the transaction may not have been that much faster than a traditional restaurant transaction, but I did not have to wait for the receipt to print (or wait for the server to add a new role of paper to the receipt printer), search for a pen or use an electron stylus that is often tethered to credit card terminals, and calculate my tip.  I felt that the process was pretty seamless.  This restaurant used a system that involved both iPhones and an iPad register but several other systems exist where only one electronic device is needed to process a payment.  

You probably have head of Square (https://squareup.com/), among the number of other systems, which require a user to obtain a small scanner (most of which are provided free) that attaches to a smartphone, but several other systems exist.   This technology is evolving and you may find that you like a system that does not even require a consumer to use a credit card to make a purchase. 

In this posting I am going to touch on why you should investigate whether mobile payments could work for your business.

Consumer use of mobile technology

Recent statistics indicate that between 42% and half of all mobile phones used in the U.S. are smartphones (http://tinyurl.com/6q5rd5s) with capabilities that allow users to download apps they can use to make mobile payments.  Compared to the number of the consumers expected to own a smartphone at the end of 2012, 115.8 million, the percentage of users expected in 2015 is set to increase nearly 66% (http://tinyurl.com/cruhdlm).

So, that provides some insight about smartphone ownership, and we know from reports that the two most popular activities conducted on a smartphone are checking email and Facebook, but what about current data that describe purchasing using smartphones and tablets?  

• During the first quarter of 2012 34% of tablet and 17% of smartphone owners had made at least one purchase on their devices.  
• An even great percentage of smartphone owners (43%) used their device in a store “for a shopping purpose,” (http://tinyurl.com/8553tbh) which could include comparing product prices at other retailers and looking up product details.  

If over one-third of smartphone users are using their phones for these purposes it is possible that they may convert to mobile purchasers.  

Flexibility for businesses

I have shopped at a number of retailers where it would have been more convenient for me to make a purchase at a site other than where the cash registers were located.  Or, sometimes I have had to pay with cash or by check instead of with a credit card, my preferred payment method. According to one source, only 7% of transactions in the U.S. are completed with cash.  Hence, we are becoming a “cashless society” (http://tinyurl.com/d6wk5eg). 

Think about your business and situations where a mobile payment option might have been useful.

• Residential landscape contractors and growers delivering product can collect payments immediately rather than invoice and wait for payments,
• food and farmers’ market vendors,  agritourism businesses, and food tradeshow exhibitors  can provide more payment options, and
• landscape nurseries can process payments in the tree lot after selecting plants with customers.  

Benefits mobile payments provide businesses 

Aside from flexibility these systems provide, businesses also benefit from their use:

• These systems capture a fair amount of customer information, which can help the businesses create  a loyalty program (or take the place of an existing one),  
• transaction funds are transferred to the business more quickly – reducing the duration from “days to hours” (http://tinyurl.com/893svvx), 
• most mobile payment companies do not charge a setup fee or a monthly fee to use their system,
• there may be little or no requirement to purchase equipment (if businesses already own the required smartphones/tablets), and
• though percentage processing fees are applied to each transaction (can range from 1.74% to 3.7%) some companies have eliminated the per-transaction charge (can range from $0.10 to $0.30).      

In the next posting I’ll discuss a bit more about the different methods you can use to process mobile payments, including on that uses the consumer’s face to verify purchases!