Something is Happening Here…

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New York, New York (October 28, 2014) – Lower Manhattan is now home to more than 800 tech and creative firms. On Thursday, October 30, 2014, the Alliance for Downtown New York, Assembly Speaker Sheldon Silver, LaunchLM and NYC tech leaders will unveil new data on the sector’s growth in the neighborhood and discuss a new initiative to enable these companies to grow.

WHEN: October 30, 2014 @ 11:30AM EST

WHO: 

  • Jessica Lappin, Alliance for Downtown New York
  • Assembly Speaker Sheldon Silver
  • Daria Siegel, LaunchLM
  • Andrew Essex, Droga5
  • Scott Anderson, Control Group
  • Jessica Lawrence, New York Tech Meetup
  • Morris Jerome, JEMB Realty

WHERE: 150 Broadway | Westinghouse | 20th Floor

Responsive Cities: Multi-Modal Transportation

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Transportation planners have theorized that public bikeshare systems and mass transit systems are symbiotic– bikeshare solves what planners call the “last mile” problem: getting from a subway stop home or vice-versa. According to a second study, bikeshare may also completely replace mass transit for shorter trips where bikeshare may be faster or more cost effective. To understand the “on-the-ground” situation in our own backyard, we looked at New York City– specifically Astor Place, a station on one of the busiest lines in the MTA system; and the East Village, a neighborhood that is less served by mass transit in Manhattan.

Do customers, as predicted by the two studies, use bikeshare to reach the train from their homes? Does it appear customers use bikeshare to replace shorter train trips? If so, what are the implications?

To begin to understand how bikeshare is used in the East Village, we looked at the destination station for trips that originate from stations within the East Village. What we found confirms the conclusions of the studies referenced: users appear to use bikeshare completely to reach destinations within biking distance (e.g. Broadway and 14th Street or Broadway and 17th Street), but primarily use bikes to connect to mass transit that allows them to travel farther, as evidenced by the top destinations of Lafayette Street and E. 8th Street, where the 6 train stops.

citibike_image_01

Interactive visualization available here.

This multi-modality has a few implications for designers of systems for urban mobility:

One Payment System Enables Frictionless Transition

The new MTA capital budget includes a new fare system to replace the 20-year old MetroCard system. This could be a great opportunity to create a universal transit pass for all mobility options in New York that would allow transfer between different modes. A single payment system could also enable dynamic pricing during rush hour, helping to mitigate crowding in subways and generate extra revenue for the MTA.

Dynamic Trip Planning Can Reduce Congestion and Stress

A multimodal trip has different decision points. Taking advantage of the flexibility a dynamic trip planning service offers, commuters can plan and alter their routes based on real-time information available at each transition point. Recommendations can be optimized to reduce congestion and commuter stress by giving customers a sense of choice.

These are just a few examples of how understanding the ways people move through the city can create value for all stakeholders. The view that one form of transportation is dominant over others is not flexible enough to address a complex urban landscape, where each trip is constantly adjusting to service changes and commuter needs. In a responsive environment, services should intuitively meet the dynamic needs of customers.

The future is bright for PayPal and digital payments

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paypal
In Spring 2014, PayPal was in talks to become part of the ApplePay lineup of preferred payment processors. But eBay CEO John Donahoe pushed a separate deal to have PayPal included on the Samsung Galaxy S5. Apple did not like this and effectively closed the door on PayPal‘s inclusion in the Apple Pay launch. But with the coming split from eBay, PayPal is poised to become one of the new leaders challenging the plastic card and magnetic stripe hegemony.

PayPal is a behemoth in its own right with 153 million accounts globally and 26% annual volume growth (compared to 9-12% for Visa & Amex). Over the past year, PayPal processed about $203 billion in payment volume with only $67 Billion coming from eBay. Paypal’s system is actually cheaper for merchants than ApplePay – since Paypal’s funding is attached to consumer bank accounts which incurs lower fees, as opposed to ApplePay’s credit card based system that has swipe and merchant account fees.

One of the first benefits for PayPal after splitting from eBay will be the ability to partner with disparate retailers beyond eBay. A major roadblock to PayPal’s growth has been the perception that its corporate parent was a rival to many other large online retailers. Now with that conflict out of the way, accepting payments for Amazon and Alibaba is possible – and that opens up huge growth opportunities.

Physical retail store transactions made via mobile devices are expected to hit $3.5 billion in the U.S. this year and balloon to $118 billion by 2018. Last year, Paypal acquired mobile payment startup Braintree, who currently serves as the processor for Uber and Airbnb. Braintree will continue to grow as the defacto engine for start-ups to process mobile payments in this burgeoning market.

Additionally, PayPal has a network of BLE Beacons in-store by way of their PayPal Beacon pilot program. The pilot hasn’t really taken off but that existing infrastructure can be built upon. PayPal can now focus on innovation like this since management won’t need to focus on supporting eBay’s core marketplace business anymore.

The brightening of PayPal’s future also bodes well for ApplePay and the payment ecosystem in general. Whether ApplePay adds PayPal to their offerings doesn’t really matter as long as there is another player out there popularizing the digital payment marketplace. And for the overall payment marketplace, it is better to have multiple major payment systems because competition is good. If ApplePay was the only game in town, then hackers would be singularly focused on cracking that system. But with an equally valuable target in PayPal, it can split and complicate hacker efforts.

While some would say it’s the convenience of a digital wallet that is going to motivate adoption, it really comes down to security. The Chip & PIN system was the plastic card half-step attempt to secure the handling of credit card transactions by retailers. But PayPal presents an option to pay that doesn’t leave your hand, cannot be skimmed (at least currently) and strengthens the entire payment system by offering an alternative. And that is a bright future for us all.

Responsive Cities: How can data improve the transit experience?

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At Control Group, we think a lot about how people move through shared spaces, particularly transit spaces. Understanding customer behavior has implications around advertising, transaction, station design and wayfinding. When we build products and experiences for shared spaces, we consider how they can intuitively meet the needs of customers without any direct interaction on their part. This is what we call a “responsive environment”– one that anticipates needs.

Our “On The Go” digital communication kiosks, for instance, could display real-time arrival information more often on a platform where we detect many passengers waiting for trains; or provide nearby points of interest with real-time arrival information on platforms where we detect that most people are exiting the train and leaving the subway system completely.

Currently, the only way to understand passenger flow at a subway station is via turnstile data. It’s a dataset the MTA has released on its open data portal, and one that hasn’t gotten a lot of attention. This is likely because there are some limitations of the data– it’s only updated every four hours and is aggregated by turnstile bank (usually one bank per entrance). Furthermore, there is often no connection between bank and line/direction, often providing little additional information about passenger behavior.

But we can still explore the potential of turnstile data to inform our efforts. We selected the 86th Street (4/5/6) station that has one turnstile bank per platform with no connection between the two. Since there are “On The Go” kiosks on each of the uptown and downtown platforms, what could looking at turnstile data do for us? Looking at the raw entry/exit data for the uptown and downtown platform at 86th Street, we found that the downtown side has many more entries than exits; on the uptown side we found the reverse:

Broken down into 4 hour blocks over a day, the data looks like this:

Rush hours see more entries and exits consistent with the general pattern; but there is frequent activity at the station throughout the entire day. What does it mean? What insights can we gain from this?

The high number of entries on the downtown side suggests most customers enter the station to wait for a train. The fewer exits from the downtown side tell us that most people do not get off here from stations above 86th Street. On the uptown side, the high number of exits suggests most customers get off here; the low number of entries tells us few board a train at 86th Street to go north. This suggests that our “On The Go” units could show more arrival information on the downtown platform. On the uptown platform, we could show arrival information coupled with information about the area surrounding the station– including special offers or featured destinations.

In the future, technologies like Bluetooth LE and other sensors will provide more granular data in real-time, allowing signage to be more dynamic and customized to the particular place in a station where the sign is deployed. Until then, the turnstile data we have suggests that there are “micro climates” of customer behavior out there that we have yet to understand and will need to be explored if we’re to build a truly responsive city.

Special thanks to the MTA and Chris Wong and Mike Mommsen for their data and tools used in this analysis.

Control Group Adds David Koenig to Expand West Coast Operations

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David KoenigWe are excited to announce the addition of David Koenig as Managing Director, Los Angeles. This expansion in leadership demonstrates our commitment to helping more private and civic organizations create transformative and profitable customer experiences that are enabled by the Internet’s expansion into the physical world.

David brings more than 20 years of executive leadership experience as an entrepreneur and corporate leader, specializing in launching and overseeing the operations, strategy, product and business development of successful creative technology companies. At Control Group, David will lead our west coast operations and business development efforts to support our continued growth and expansion.

David is an inspiring entrepreneur and business leader, both starting and managing businesses focused on creating innovative customer experiences. From artificial intelligence to gaming and proximity, his expertise is perfectly aligned with what we do and where we’re going.

Most recently, David was a Sr. Director of Business Development at Qualcomm where he played a key role in developing Gimbal, the groundbreaking contextual awareness technology that enables location-based experiences using beacons and geofences. Prior to Qualcomm, David was General Manager at DreamWorks Animation, CEO at StudioGPU, and CEO at XLT, Inc. David also co-founded Gigawatt Studios, a Hollywood-based independent game developer with sales in excess of $100 million. He also managed the development of artificial intelligence systems at Cognitive Systems Inc. earlier in his career.

Welcome David!

Thinking Beyond Beacons: Macy’s Shopkick Rollout

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Macys

The Magic of Macy’s

Macy’s recently announced the largest deployment of beacon technology in retail, with more than 4,000 ShopKick devices planned for installation across all of its stores in the U.S.  While it is encouraging to see a retailer the size of Macy’s embracing proximity marketing, we think there is a lot more that Bluetooth can enable for brands.

Commercial platforms like ShopKick are limited in their ability to connect a customer experience to the brand. Instead, they generalize an experience across multiple brands by gamifying the in-store experience into a scavenger hunt for “kicks”– points that are awarded to users for performing various in-store tasks. In fact, many users have figured out how to exploit apps like ShopKick to get more points since the application will award “kicks” for scanning the barcode of certain products in-store (assuming that the user would have to walk through the store to find the item). Sites have popped up that let ShopKick users share barcodes so they can print them out, walk into a store, and then immediately scan the UPC codes without needing to find the product on the shelves. Yes, it gets customers in the store, but is it really optimizing dwell time and engagement?

Additionally, commercial apps that are separate from a brand’s app divorce the customer’s intent from a deeper interaction with a brand like Macy’s. Instead they replace potentially meaningful brand engagement  with another incentive around gathering points to cash in for other items. And those prizes include competitors to Macy’s, such as gift cards to Target, TJ Maxx, JC Penney, and other retailers. Conceivably I could walk around a Macy’s store gathering “kicks” and then trade those in for a gift card to a competitor without ever spending a dollar in Macy’s.

Furthermore, ShopKick diminishes a brand’s ability to tailor notifications, and risks flooding the shopper with a deluge of notifications with little thought given to targeting or contextualization. (How can they provide meaningful information if they don’t know your brand or your customers?) One of the biggest challenges with beacon deployments like this is user retention: consumers will opt-out if the notifications don’t provide value.

Our perspective is that technology should make sense and provide value for both the brand and the customer. Unfortunately, off the shelf deployments tend to fall short on delivering those experiences. Retailers should invest in technology that is cohesive with the brand and integrated with their loyalty programs. It should also enable more granular control over how, when, and why they engage their customers.