New Business Technology Issues Will Affect Onsite Operations in 2011

GETTING SMARTER. As smart phone sales have boomed, so have their applications, which may change the way consumers shop and pay.

Every new year brings its challenges, but major legislative changes and the accelerating pace of technology promise to make 2011 an especially interesting one for onsite foodservice operators. Among the challenges:

Raising the Bar: The GS1 DataBar is a new type of bar code with a smaller footprint and greater data capacity than traditional bar codes. It has been used for the past year or so primarily on manufacturer issued coupons alongside the older UPC-A barcode.

On the inventory side, the GS1's smaller footprint and greater storage capacity makes it useful for labeling small individual items, even individual pieces of produce, with data such as expiration dates.

On a larger scale, GS1 Databars on cases can incorporate data that enables full traceability of product. In an era of increased sensitivity to product liability, this function promises to provide tangible positive benefits for everyone in the food channel who takes food safety seriously.

Credit Where Debit Is Due? Changes brought about by last year's Dodd-Frank Wall Street Reform and Consumer Protection Act will have an impact on onsite retailing.

That's because, by capping interchange fees on debit cards (for card-issuing banks with more than $10 billion in assets), the legislation provides an incentive to retailers to prefer debit over credit cards, at least for certain transactions.

One proposal floated in January by the Federal Reserve, the agency charged with writing rules to implement the legislation, caps debit card interchange fees at a flat 12 cents per transaction rather than using a percentage of the sale.

Whether that approach survives to become the rule or not, it's clear that the regulatory ground has shifted. Banks may start placing limits on debit card usage, perhaps by restricting the number or size of transactions.

Dodd-Frank also for the first time allows retailers to offer discounts and other incentives to encourage the use one payment medium over another, and to set minimums and maximums for card usage. Previously, most card issuer contracts with retailers prohibited such practices.

Phoning It In: Technology is putting ever more powerful commercial tools in consumer hands, potentially changing the way they make purchase decisions and pay for their purchases.

FM's January story on the Tag program at Microsoft illustrates the cutting edge possibilities of smart phones to offer value-added services and drive incentives (Tags icons can be scanned with a smart phone camera to trigger links to nutrition information, discount offers, events, etc.).

Meanwhile, smart phone GPS transmitters that pinpoint physical location in real time, potentially allow merchants to target nearby customers. Deals, introduced by Facebook late last year, uses this approach to send commercial solicitations to subscribers from merchants near their location.

Elsewhere, social networking services like Twitter are being used by innovative retailers like big city food trucks to send targeted commercial messages to reach customers with service and menu updates.

Then there is cell phone based payment, which took a major step last month when Starbucks introduced that option for its 7,500 U.S. locations.

Also last month, rumors began to circulate that Apple would enable the next generation of its iPhone and iPad devices with NFC (Near Field Communication) chips that would allow them to be used to make payments with a wave of the phone near a reader. Smart phone rival Google had made a similar announcement about its new Android smart phone operating system late last year.

Meanwhile, credit card giant VISA partnered with Bank of America last year on a pilot program in the New York City area (later expanded to Atlanta and San Francisco) testing the viability of NFC-enabled smart phones as payment media at retail checkouts.