Mastercard Lauds Apple Card Security

https://www.pymnts.com/apple/2019/mastercard-lauds-apple-card-security/
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Apple Card, a new kind of credit card created by Apple, is being applauded by Mastercard for its enhanced security, simplicity, transparency and privacy, CNBC reported on Tuesday (Aug. 20). The new iPhone-integrated credit card has teamed with both Goldman Sachs and Mastercard.

Customers can apply for the card through the iPhone Wallet app and immediately use it in stores, on websites and for in-app purchases. The no-fee card offers increased security while encouraging customers to pay less interest with an easy-to-understand view of spending. 

The Apple Card doesn’t come with a 16-digit number like other credit cards and users are encouraged to avoid swiping. 

“Not having a card number on the physical card, if the consumer chooses to get that, helps [with security] certainly because somebody can’t just write that down and take it,” Mastercard North America President Craig Vosburg said on CNBC’s “Squawk Alley.”

Vosburg said the card combines “Mastercard’s technology in conjunction with Apple and Goldman Sachs” to create a “new kind of consumer experience.”

Users get a one-time-use number in the Wallet app. “The real key to the enhanced security here is happening behind the scenes where we’re tokenizing the card credentials,” he said, adding the number is scrambled into a code only recognized by Mastercard and Goldman Sachs.

“We know where it’s meant to be used. We know it’s meant to be used with that Apple device and if it shows up somewhere else, we know it’s been compromised and we can kill it,” Vosburg said.

The new offering hopes to keep Apple users loyal and make it harder to switch to Android.

The Apple Card will also be available as a physical, titanium card. At the core of the new Apple offering lies Mastercard’s token and M Chip technologies, which store the card on digital devices without exposing sensitive data. Mastercard wants to enable token services on all cards by 2020.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/apple/2019/mastercard-lauds-apple-card-security/

US Justice Department Forges Ahead With Big Tech Investigation

https://www.pymnts.com/antitrust/2019/justice-department-big-tech-investigation/
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The U.S. government is working with state attorneys general to probe online platforms for possible antitrust violations, Reuters reported on Tuesday (Aug. 20).

The U.S. Justice Department’s antitrust division said it could ask Silicon Valley companies for documents in its investigation of Big Tech’s market power of major technology, according to the department’s Antitrust Chief Makan Delrahim.

Delrahim is also looking into any legal protections that should be offered to Facebook, Google and Twitter regarding user-generated content.

Previously approved tech company acquisitions are also part of the antitrust review, which was announced last month in July.

“Those are some of the questions that are being raised … whether those were nascent competitors that may or may not have been wise to approve,” Delrahim told Reuters. “Whether the intention of the incumbent was to purchase some of those competitors, I don’t know. I’m not privy to the facts of each of those investigations.”

While the DOJ never mentioned any company by name, its concerns are aligned with Google search, Facebook’s dominance in social media and Amazon’s position as the country’s eCommerce leader.

“We might be issuing compulsory process on some third parties who may or may not need it for whatever reason to provide more information to us,” Delrahim said.

The DOJ and the government’s other competition agency, the Federal Trade Commission (FTC), planned to intensify their antitrust scrutiny of the tech industry. In doing so, the agencies essentially divvied up oversight of Amazon, Apple, Facebook and Google, a process that sets the stage for investigations into specific business practices at each of those companies.

The multi-state attorneys general composition could provide the investigation with broader leverage. This inquiry followed July reports that the DOJ was opening a new, separate investigation into the potential antitrust activities of tech companies. The separate probe is looking into whether these big-name companies are tapping into their influence and power to stifle competition. The main avenues to be examined are said to be shopping services, social media practices and internet search.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/antitrust/2019/justice-department-big-tech-investigation/

Facebook Unveils ‘Off-Facebook Activity’

https://www.pymnts.com/facebook/2019/facebook-unveils-off-facebook-activity/
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To allow users to separate their web browsing history from their personal profiles, Facebook finally finished a new feature. The move, however, could make advertising on the social media platform less valuable to marketers, Bloomberg reported.

The social media platform is debuting “Off-Facebook Activity.” It was called “Clear History” in past times and a feature that Facebook CEO Mark Zuckerberg first announced last year. The tool lets users disconnect their profiles on Facebook from data for web browsing and other information the company takes in from outside apps as well as sites.

Off-Facebook Activity is designed to show people what Facebook has taken in and provide a way to have it removed. Users can find the new feature in settings, which offers them a list of websites and companies that have shared data with the social media platform. Users then can clear all web browsing data or tell the social media platform to stop linking data to their account going forward.

The report notes, however, that Facebook will still collect data about browsing activity and will put it on company servers. But it won’t connect the information to an individual user. It also points out that the feature comes with additional sections and links designed to explain the reasoning behind Facebook having specific data, where it came from and what it is used for.

According to the report, the company said it will have an advertising campaign on Facebook and through print to let people know about the tool.

Last year, Zuckerberg announced that Facebook would be adding a “Clear History” button that would provide users with essentially the same power to clear their Facebook history that they have to delete their web browser’s history. At the time, it was noted that the tool specifically removes information Facebook has about the interactions of users away from the social media tool.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/facebook/2019/facebook-unveils-off-facebook-activity/

Oregon Community Credit Union launches digital platform

https://bankinnovation.net/allposts/biz-lines/lending/oregon-community-credit-union-launches-digital-platform/
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Oregon Community Credit Union (OCCU) has launched phase one of its digital platform, a move meant to “set the foundation” for the credit union’s new focus toward automation, Chris Whittaker, vice president of consumer lending, told sister publication Auto Finance News on Monday. The digital banking platform, called MyOCCU Online & Mobile, took “a good year-and-a-half” …Read More

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https://bankinnovation.net/allposts/biz-lines/lending/oregon-community-credit-union-launches-digital-platform/

The Cloud Surrounding Banks’ Data Security (In The Cloud, Too)

https://www.pymnts.com/news/security-and-risk/2019/the-cloud-surrounding-banks-data-security/
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No rest for banks amid the hackers. And certainly not with an outsourced tech model.

In the wake of the Capital One data breach that exposed data tied to 100 million individuals in the United States comes a warning that there really are not any places to hide.

A quoted by Bloomberg, a senior official at the European Central Bank (ECB) has warned of the threats that come with embracing the digital age.

It’s no secret that banks have been turning, increasingly, to bits and bytes to boost the consumer experience and provide a range of services to individuals and corporates alike.

There may be cause for caution.

“There will be accidents, especially in the cloud,” Korbinian Ibel, a director general at the ECB’s supervisory operations, said in the report. “It’s not that clouds are more vulnerable, they’re actually often better protected than in-house systems, but they’re seen as juicy targets.”

The warning comes as banks have been enlisting the aid of tech giants like Microsoft and Amazon, while bringing operations and data to the cloud. Such moves are tied to the desire to streamline operations, move beyond legacy systems and cut costs. This last point is especially desirable in an age where lower interest rates mean top lines see pressure.

Does the Capital One breach portend risks for banks on the Continent? Not as of yet, since many financial institutions (FIs) in Europe do not store sensitive data on public clouds.

“We see the benefits” of cloud computing, Ibel said. “The rule is that the banker is always responsible for their data and services … It’s not enough to have one person as the IT expert,” he said. “You need a common understanding at board level of the needs and risks of IT.”

The ECB warnings come as eCommerce giant Amazon late last month said it was not to blame, contending instead that clients (such as banks) are ultimately responsible for their own apps. As quoted by Newsweek, the firm said via spokesperson, “AWS was not compromised in any way and functioned as designed. The perpetrator gained access through a misconfiguration of the web application and not the underlying cloud-based infrastructure. As Capital One explained clearly in its disclosure, this type of vulnerability is not specific to the cloud.”

In more recent news, the ECB itself said last week (as recounted in Forbes) it had been breached, in an incident where hackers injected malware that may have caused the bank to lose data. The hackers had gained access to the ECB’s Integrated Reporting Dictionary site. That site had been breached at the end of last year, and had been hosted by a third-party provider.

“The BIRD website provides the banking industry with details on how to produce statistical and supervisory reports,” the ECB statement said, “it is physically separate from any other external and internal ECB systems.” At least some data tied to subscribers may have been “captured.”

Here then lies a conundrum. In the build vs. buy debate there has been a third way — partner. The model where banks (or any firms for that matter) link with other companies to tap expertise and get to market with new products and services saves time and money.

As reported by PYMNTS and as noted at the end of last month through the Innovation Readiness Playbook done in conjunction with i2c, as many as 80 percent of top performing artificial intelligence (AI) systems will focus on data analytics over the next few years. And, as noted in the study, technical limitations and complexity remain barriers to innovation for many FIs. This suggests they could benefit from partnerships to help them overcome some of these challenges, including the constraints imposed by legacy payment systems.

In the outsourcing model, then, it seems prudence would demand: caveat emptor.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/news/security-and-risk/2019/the-cloud-surrounding-banks-data-security/

Kohl’s Aims To Bring In Foot Traffic With Amazon Returns

https://www.pymnts.com/earnings/2019/kohls-amazon-returns-digital-rewards/
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With the acceptance of Amazon returns rolled out in its stores and a pipeline of digital initiatives ahead, Kohl’s reported its second-quarter earnings with a confident outlook for the balance of the year. The department store retailer also highlighted efforts such as the upcoming launch of its Curated by Kohl’s program and an expansion of its rewards pilot.

Kohl’s Chief Executive Officer Michelle Gass said in an earnings conference call on Tuesday (Aug. 20) that the Amazon returns program is a significant initiative and a “great example of our innovative spirit.” (As previously reported, the department store retailer will accept “eligible” Amazon items without a label or box.) The partnership with the eCommerce retailer, Gass noted in the call, reflects the collective strengths of both merchants.

Gass pointed out that Kohl’s has a robust nationwide footprint and best-in-class omnichannel capabilities. Amazon, on the other hand, has an expansive customer reach and world-class digital capabilities. She also noted that the effort aligns perfectly with the company’s top strategy of driving traffic. “The overarching goal of this program is to convert the traffic that comes into our stores into loyal Kohl’s shoppers over time,” Gass said.

The executive also noted that the company completed its nationwide rollout on July 8. And, while the program has only been in place for six weeks, she noted that the company is very encouraged by the initial results. Traffic coming into its locations is meeting expectations, Gass said, and is skewing toward off-peak times. She also pointed out that the company is seeing a mixture of existing customers and new, younger shoppers using the service.

The company began supporting the program in mid-July with a robust marketing plan that encompassed digital, print and national broadcast television. Gass also noted that the company expects the Amazon returns program to make a positive contribution to operating income in 2019.

Curation and Rewards

Gass noted that an effort called Curated by Kohl’s will showcase “emerging” digitally native brands in approximately 50 Kohl’s locations and online beginning in October. The company will start by offering six brands and will rotate them to ensure a continuous flow of newness and discovery for both current and new customers. (It was previously reported that the retailer also plans to team with Facebook on brand curation starting next year.)

The executive noted that Kohl’s is in a unique position to support customers’ curiosity when it comes to new brands and interesting products by tapping into its store footprint, digital assets and large customer base. The platform also enables the company to find, test and gain important insights into emerging brands with “long-term growth potential,” Gass noted. (According to previous reports, selections could include products in categories such as apparel, home and accessories.)

Kohl’s also recently expanded its rewards pilot to five more markets (it now covers a total of 13 markets, covering roughly 175 stores). The company is pursuing a strategy of simplifying its loyalty assets under one umbrella with rewards anchored to Kohl’s Cash – “a customer favorite and a key differentiator of ours,” per Gass. She pointed out that the loyalty program has 30 million active members, and the company believes there is a sizable opportunity to enhance customer acquisition and retention.

The company also plans to test a new site redesign with a small subset in the fall, with the aim of improving the customer experience and driving even better conversion. The new site is said to feature enhanced imagery, navigation and filtering, while also encouraging more discovery and inspiration while keeping the company’s value messaging intact.

Kohl’s surpassed earnings estimates for the second quarter, but its net sales fell short of estimates. The department store retailer reported net sales of $4.17 billion and earnings of $1.55 per share compared to estimates of $4.2 billion and $1.53 per share.

With efforts such as Amazon returns and a curated selection of emerging brands, Kohl’s aims to bring customers into its stores as it looks toward the rest of the year.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/earnings/2019/kohls-amazon-returns-digital-rewards/

Cuentas wants to turn convenience stores into financial centers

https://bankinnovation.net/allposts/biz-lines/payments/cuentas-wants-to-turn-convenience-stores-into-financial-centers/
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Cuentas, a Miami-based prepaid debit card company targeting Spanish-speaking populations, wants to turn convenience stores into financial hubs through Cuentas-branded debit cards and accounts. The cards, which will launch in early September, will be linked to an online bank account from Saturn Bank. Customers can the reload the cards at any SDI Next convenience store location, of which there are more than 31,000 in major cities across the U.S.

Arik Maimon, CEO of Cuentas, said the company is pitching the additional services that convenience stores offer as a driver for customer acquisition. In addition to Cuentas account top ups, customers can buy and reload public transportation tickets and international calling cards in stores or through the Cuentas app.

The move to turn retail stores into financial hubs is nothing new. For example, Walmart’s Money Services centers offer an array of over-the-counter banking and money transfer services, and 7-11 stores let customers top up their Amazon Cash prepaid cards at checkout.

The Cuentas card

To sign up for the Cuentas online bank account and prepaid card, customers must have a valid U.S. address. They can then add money to their account at any SDI Next store, as Cuentas acquired a majority stake in SDI Next in 2017. Eventually, the company will offer international remittances through the stores as well, similar to Walmart’s tie-ups with MoneyGram and Ria. Although the app and prepaid cards will be available throughout the U.S., the convenience stores only will be available in New York City, Los Angeles, Connecticut and Michigan to start.

While Cuentas is touting the convenience of the prepaid card offering for the underbanked, the company will charge customers a $3.75 monthly membership fee, a $3.75 one-time activation fee for the card and a $3.95 reloading fee. ATM withdrawals cost $1.50, and balance inquiries cost 75 cents. Getting cash back over-the-counter costs $1.50 as well. By contrast, digital-only banks Chime and Varo offer customers no monthly fees, no foreign transaction fees, a network of tens of thousands of fee-free ATMs and post deposits two days prior to payday.

Still, Cuentas is using other business lines to promote its financial services offerings to its target clientele. The company plans on using its infrastructure as an international calling company to attract its Spanish-speaking customer base to the Cuentas app. Many customers already get texts from Cuentas and TEL3 regarding how much money they have left on their calling plan; Cuentas will begin cross-selling its financial products to these customers via text. The company will advertise through radio and TV commercials as well.

Cuentas, formerly Next Group Holdings, has sold long distance international calling plans for more than 20 years through its subsidiary TEL3, primarily to Spanish-speaking customers. Maimon said the company decided it needed to focus on a new vertical about five years ago, when communication platforms like WhatsApp started making international phone plans a less lucrative business. Next Group Holdings’ first foray into financial services was with its NextCala card and digital bank account, which functioned as a pilot two years ago, he noted, adding that a few thousand people signed up for NextCala at the time.

Maimon said its new prepaid card and bank account will launch sometime within the first two weeks of September, and the company plans to launch international remittance services by the end of the year. Cuentas is working with the Mexico City-based Banco Azteca to launch the remittance service.

Despite the convenience of the SDI Next stores, Cuentas faces a tough challenge gaining customers in a crowded field of prepaid card companies and competitively priced offerings from big-box retailers like Walmart. Meanwhile, challenger banks can incentivize budget-conscious customers by keeping fees low.

Greg McBride, chief financial analyst at Bankrate, said consumers should be wary of prepaid card companies that charge multiple fees. “Even for a consumer that won’t or can’t open a checking account at a bank or credit union, they may find them offering a competitive prepaid card option that avoids the type of ancillary fees that have often characterized the prepaid card space,” he added.

https://bankinnovation.net/allposts/biz-lines/payments/cuentas-wants-to-turn-convenience-stores-into-financial-centers/

DoorDash, Revention Partner For Restaurant Logistics

https://www.pymnts.com/news/delivery/2019/doordash-revention-partner-for-restaurant-logistics/
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Restaurant management app Revention is teaming with on-demand logistics platform DoorDash to help restaurateurs streamline delivery operations, Revention said in a press release on Tuesday (Aug. 20). 

The new endeavor will help eateries accommodate busy time periods and unexpected rushes, as well as downtime and expanded service. The partnership wants to build out restaurants’ operational efficiencies and eventually include supply fulfillment and last-mile logistics.

“The combination of our industry-leading POS and mobile and online ordering solution with the integration of DoorDash uniquely positions us to provide a scalable and comprehensive solution from the order to the customer’s front door,” said Revention Vice President of Products and Marketing Rahul Bakshi. “Whether you are an independent operator or a national franchise, we are offering businesses a solution to grow more efficiently.”

Revention is the industry leader in restaurant point of sale (POS) and online ordering, optimizing the ordering process unique to delivery operations. With DoorDash, restaurateurs can deliver food to more customers faster.

“We share in Revention’s commitment to empower local businesses by providing them with on-demand access to DoorDash’s strong logistics platform,” said DoorDash Vice President of Drive Casey North. “This partnership will enable us to further offer scalable, quality services that will help restaurants build their brand, engage their customer base, and increase sales outside their four walls.”

DoorDash is aggressively working on expansion efforts, securing a $400 million credit line earlier this month ahead of its anticipated initial public offering (IPO). With a current valuation of $12.6 billion, the San Francisco startup raised $535 million last year in March followed by a $250 million round in August 2018 and a $600 million Series G in May. The company was founded in 2013 by Stanford University students Andy Fang, Evan Moore, Stanley Tang and Tony Xu.

The company also closed a deal earlier this month to buy Caviar, Square Inc.’s food-delivery service. The deal is meant to bolster both companies’ commitment to specialized merchant selection and will add Caviar’s premium restaurants to the DoorDash platform. DoorDash said it will help drive growth for these restaurants and cater to all food preferences and occasions.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/news/delivery/2019/doordash-revention-partner-for-restaurant-logistics/

BeSmartee Integrates with BytePro

https://finovate.com/besmartee-integrates-with-bytepro/
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A collaboration between loan technology innovator BeSmartee and Byte Software’s BytePro platform will improve the digital mortgage experience for customers by enabling lenders and originators to process applicants faster and better manage heavy demand cycles.

“We’re pleased to have fulfilled this bi-directional integration to the BytePro LOS platform,” BeSmartee co-founder Arvin Sahakian said, calling Byte “a truly great company.” He added, “(This) gives BeSmartee the opportunity to enhance the origination process and user experience for more than 1,000 Byte LOS customers.”

Among other features, the integration will enable lenders to create a loan file in Byte using Fannie Mae 3.2 file data, and will support the pushing and pulling of documents and conditions to meet all the requirements of the loan origination and financing process. Borrowers will benefit from a multi-channel, interactive borrowing experience that leverages chat, text, messaging, email, and co-browsing to enhance the customer journey through an automated workflow.

Kirkland, Washington-based Byte Software was founded in 1985. With clients in all 50 states of the U.S., the company works with both multi-state lenders as well as community banks and mortgage brokerage firms. Its BytePro platform streamlines the mortgage process by using document imaging, an accessible web portal, task tracking and metrics, customizable pipeline views, and multiple user editing of loan files to improve efficiency. A business partner of CBCInnovis, a mortgage lending support solutions provider, Byte Software released the latest version of its technology this spring, introducing a new VA Cash Out Refinance Certification document in addition to other enhancements.

BeSmartee demonstrated its Smart Mortgage technology at FinovateSpring 2017. The company leverages artificial intelligence to enable lenders to move borrowers from initial engagement to underwriting in 20 minutes with completed loan application, credit report, income and asset documentation, eSigned and eDelivered disclosures, and paid appraisal.

In just the past few months BeSmartee has forged partnerships with a variety of players in the mortgagetech industry. In July, the company announced an integration with real estate document collaboration and recording technology company Simplifile. Also in July, BeSmartee and private mortgage insurance provider Arch Mortgage Insurance Company (Arch MI) collaborated on a direct integration that will provide quick and accurate risk-based pricing to accelerate the application process.

In June, BeSmartee announced another partnership, integrating with income calculation and verification technology provider LoanBeam. The same month, the company introduced its new mortgage platform for wholesale lenders and third-party originators.

Founded in 2008, BeSmartee is headquartered in Huntington Beach, California.

https://finovate.com/besmartee-integrates-with-bytepro/

Apple Health Execs Leave Company Amid Internal Clash

https://www.pymnts.com/personnel/2019/apple-health-execs-leave-company/
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Apple Health is undergoing personnel changes after numerous departures following years of internal friction about objectives, CNBC reported on Tuesday (Aug. 20).

The company’s healthcare team has been at odds for years, eight people familiar with the situation told the news outlet. Four of the eight sources said employees had anticipated solving larger healthcare system dilemmas and digging deeper into issues like telemedicine and health payments. However, Apple Health focused on offering preferred features for healthy users.

Apple declined to comment to CNBC for this story.

Health remains a key concern for Apple, and has been instrumental in boosting Apple Watch sales in the face of declining iPhone business. CEO Tim Cook has said that health at Apple will be the company’s “greatest contribution to mankind.”

It’s not known if the number of departures from the company’s health team is higher than other Apple segments, but the shakeup outlines the difficulties tech companies can have in navigating the convoluted $3.5 trillion healthcare vertical. Healthcare employees tend to want to fight the biggest problems in the industry, while tech companies generally take a more systematic approach.

Current exits include marketing’s Christine Eun, an eight-year veteran; Brian Ellis, who oversaw the wellness team of a branch running Apple employee health clinics; and Matt Krey, who left to focus on family. Warris Bokhari left for Anthem and researcher Andrew Trister joined the Gates Foundation earlier this month.

The Apple Health team, which reports to COO Jeff Williams, was instrumental to the Watch team’s advancement into sensors and algorithms in healthcare.

The Apple Watch is getting expanded use in healthcare management; Cook has said it is becoming an “indispensable tool” for users worldwide. One example is Aetna’s collaboration with Apple in launching Attain, a new health experience. Via the Apple Watch, the Attain app will give Aetna members access to personalized goals and recommendations, along with the ability to track daily activity levels and earn rewards for taking actions to improve their overall well-being.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/personnel/2019/apple-health-execs-leave-company/

Gen Z’s Friendlier Relationship With Credit

https://www.pymnts.com/news/financial-inclusion/2019/genz-millennials-credit-cards-spending/
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Generation Z is growing up. The oldest members of the generation born between the mid-90s and the mid-2010s (specific year ranges vary depending on who is supplying the figures) are graduating from college, getting their first jobs and starting to form their relationships with credit products.

And based on early indications, it seems the follow-up act to the millennial generation is much more positively inclined toward using credit products of all stripes. The percentage of credit card-eligible Gen Zers who carry a balance increased by 41 percent between Q2 2018 and Q2 2019, according to a new report from TransUnion, reaching a total of 7.75 million.

That is a much more active rate than seen in older generations during the same time period. Far more millennials and Gen Xers make use of credit cards than Gen Zers – at 38.29 million and 38.27 million, both cohorts have roughly quintuple the carrying rate. But the growth is much slower – 5 percent and 3 percent for millennials and Gen Xers, respectively.

And, at least thus far, the new Gen Z entrants to the credit market seem to be managing their debt about as well as their older counterparts, according to the study data.

“Card delinquencies for Gen Z are roughly in line with millennials and Gen Xers,” Kristen Bataillon, senior manager of research and consulting at TransUnion, told USA TODAY.

Credit cards aren’t the only area where Gen Z is showing strong interest in lending products. Auto loans were up 40 percent year on year, according to TransUnion, and personal loans were up by about 45 percent.

Gen Zers with mortgages jumped 112 percent year on year between 2018 and 2019 – though big growth is easy when starting with small numbers. In 2018, there were about 150,000 mortgages among the generation, and as of 2019, there are 310,000. All in, mortgages remain the underwriting product Gen Z consumers are least likely to have – which is unsurprising, given their maximum age and attendant life stages.

Credit cards, however, show the greatest strength. Currently, according to TU, there are about 31.5 million card-eligible Gen Z members – only about 5 percent of total U.S. card accounts. But their numbers in the market are set to rise along with their average age: By 2022, there will be 44.5 million Gen Zers in the market who are eligible to carry credit cards.

“The rapid growth in Gen Z credit activity is occurring despite many of these individuals having grown up during the Great Recession,” Matt Komos, vice president of research and consulting at TransUnion, said in a statement. “As we see more members of this group come of age, we naturally expect continued growth in credit activity by Gen Z.”

Early data indicates that Gen Z is a bit warmer to the idea of taking on debt than millennials – but it is still a very early indication. Some of Gen Z is entering adulthood, with the oldest members of the generation around 22 years old. But more than half of Gen Z is still under the age of 18 and thus not credit-eligible, and the youngest members of the generation are still in elementary school.

It might be a bit early to be making long-term pronouncements about the credit opinions of an age demographic whose youngest members are still more than a decade away from being eligible for their first credit card.

After all, an awful lot can happen both technologically and economically in the next decade. And it is probably safe to forecast that at least some of those happenings will influence the future credit preferences of today’s third graders. Early data is good – but staying current as the situation evolves on the ground is likely a good idea.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/news/financial-inclusion/2019/genz-millennials-credit-cards-spending/

Waymo To Test Autonomous Vehicles In Florida

https://www.pymnts.com/innovation/2019/waymo-to-test-autonomous-vehicles-in-florida/
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Waymo plans to test autonomous vehicles in the rainy conditions of Florida, according to a report.

The company, which is owned by Google’s parent company Alphabet, will collect data and test how the cars’ sensors handle the rain. The vehicles will be driven by trained Waymo drivers, the company said in a blog post.

“Heavy rain can create a lot of noise for our sensors. Wet roads also may result in other road users behaving differently,” the company said. “Testing allows us to understand the unique driving conditions, and get a better handle on how rain affects our own vehicle movements, too.”

The autonomous car company has two self-driving vehicles: the Chrysler Pacifica and a Jaguar I-Pace, both of which will be tested in Naples and Miami. Miami is one of the rainiest cities in the country, as it gets about 61.9 inches of rain per year.

Waymo started testing autonomous vehicles in the Mountain View, California area and then branched out to other places like Novi, Michigan; Kirkland, Washington; and San Francisco. Most of the testing has happened in Phoenix and Mountain View, both predominantly sunny areas.

Waymo has a technical center in Chandler, Arizona, where it began running tests in 2016. A year later, the company launched an early rider program to help it move toward eventual commercial usage.

“First, we’re spending several weeks driving on a closed course in Naples, where we will rigorously test our sensor suite – which includes lidar, cameras and radar – during the rainiest season in the south,” the company said. “Later in the month, we’ll bring our vehicles to public roads in Miami. Additionally, Florida residents will start seeing a few of our vehicles on highways between Orlando, Tampa, Fort Myers and Miami as we learn about Florida roads.”

Miami Mayor Francis Suarez said he is glad Waymo chose the city for testing.

“Waymo’s decision to choose Miami as a testing platform for its cutting-edge technology speaks to our city’s position as a dynamic hub for innovation,” he said. “As a Smart City, we are constantly working to modernize how we move and travel. Waymo’s work uniquely aligns with Miami’s mission to embrace technology to solve problems and improve lives, while prioritizing safety and efficiency.”

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/innovation/2019/waymo-to-test-autonomous-vehicles-in-florida/

Apple Card Officially Released In US

https://www.pymnts.com/apple/2019/apple-card-officially-released-in-us/
http://securecdn.pymnts.com/wp-content/uploads/2019/08/Apple-Card-Released-Credit-457x305.jpg?#

The Apple Card, a credit card created in partnership by the technology company, was officially released in the U.S. on Tuesday (Aug. 20), the company said in a release.

The company said the credit card is meant to help customers have a “healthier financial life,” and that interested customers can sign up for the card through the Wallet app on an iPhone. 

Apple said the process only takes minutes and that customers can start using the card immediately.

“Built on simplicity, transparency and privacy, Apple Card has no fees, encourages customers to pay less interest, offers an easy-to-understand view of spending and provides a new level of privacy and security,” Apple said.

The release follows an earlier preview which allowed for Apple store employees and a limited number of others to apply for the card. 

“We’re thrilled with the overwhelming interest in Apple Card and its positive reception,” said Jennifer Bailey, Apple’s vice president of Apple Pay. “Customers have told us they love Apple Card’s simplicity and how it gives them a better view of their spending.” 

Apple card offers a “Daily Cash” rewards program, which gives cardholders back 2 percent when they use the Apple Card with Apple Pay, and 3 percent on all Apple purchases, like the Apple or iTunes Store. The company is also extending the Daily Cash to other merchants and apps. 

Starting on Tuesday, customers who use the Apple Card with Apple Pay for Uber and Uber Eats will get 3 percent back. Apple said it will add more merchants in the months to come. 

Apple also has a titanium Apple Card, and customers who use that get 1 percent back on all purchases. 

The card fully utilizes iPhone capabilities, as customer support for it can be reached 24/7 by sending a text. The card also uses machine learning and Apple Maps to make sure transactions are clearly labeled by map and name in  the Wallet app, and it will also show customers a weekly and monthly spending summary.

Apple partnered with Goldman Sachs on the card, and it said the card offers unparalleled privacy and security. 

“The unique security and privacy architecture created for Apple Card means Apple does not know where a customer shopped, what they bought or how much they paid,” the company said.

Apple also partnered with Mastercard for the support of a global payments network.

——————————–

Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/apple/2019/apple-card-officially-released-in-us/

Starship Tech Robots To Deliver At 100 More Colleges

https://www.pymnts.com/news/delivery/2019/starship-tech-robots-to-deliver-at-100-more-colleges/
http://securecdn.pymnts.com/wp-content/uploads/2019/08/Delivery-Robots-College-Starship-457x305.jpg?#

Starship Technologies, a company that deploys self-driving robots, will expand and deliver everything from Starbucks to pizzas — but not booze — to college students all around the country, through partnerships with food companies Sodexo and Compass Group, according to a report by CNBC

The latest campuses that will get the delivery robots are Purdue University, University of Pittsburgh, George Mason University and Northern Arizona University. Indiana University will see them in September.

Students can use the Starship app for 24/7 deliveries, and can also use a meal card if items they’re ordering are covered in the plan. Delivery fees typically run between $1 and $2, and the items generally arrive within 30 minutes.

Starship Technologies CEO Lex Bayer said the robots will be in about 100 campuses by 2021. Starship has raised about $40 million to aid in the expansion, and it’s raised a total of $85 million so far.

Bayer said the delivery robots are ideally suited for college campuses, where there are often narrow passages and places where cars aren’t allowed to go, or cannot even fit. He also said the vehicles are good for the local economy, as they’ll help stores in the area.

“Why buy a wrench online from an eCommerce site that will get there two days later when you can buy it from a local hardware store and have it in half an hour?” Bayer said.

Regulations for the autonomous robots, unlike self-driving cars and drones, has come relatively easily. They’re not as heavy and they’re smaller and slower, which means they’re not as dangerous or likely to cause damage or death. 

There are currently nine states that allow the robots, Bayer said, which will give the company a reach of around 100 million people. 

The company delivers mostly food, groceries and retail items, but Bayer said he eventually wants to deliver pharmaceuticals as well. The company recently completed its 100,000th delivery. 

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/news/delivery/2019/starship-tech-robots-to-deliver-at-100-more-colleges/

UBS Appoints New Head Of EU Operations

https://www.pymnts.com/personnel/2019/ubs-appoints-new-head-of-eu-operations/
http://securecdn.pymnts.com/wp-content/uploads/2019/08/UBS-New-CEO-EU-457x305.jpg?#

Swiss Bank UBS has announced that it has hired a new CEO of European Union operations, according to a report by Reuters

The bank appointed Christine Novakovic to the position. The contract of the previous CEO, Thomas Rodermann, was not renewed but the situation was a “friendly, mutual agreement,” according to the bank. Novakovic will start in the new position on Sep. 1 and will be based in Frankfurt. 

The hiring of Novakovic will make her one of the most powerful bankers in Germany, where less than 10 percent of top finance management positions are held by women.

In addition to her new position, Novakovic will oversee the management of wealth in Europe, Africa and the Middle East, and she’ll also handle Germany and Austria.

“This setup will allow us to streamline and simplify the management structure, reduce internal coordination effort and enable faster and more flexible decisions,” said Roland Koch, chairman of the supervisory board of UBS Europe SE.

One study by the German Institute for Economic Research (DIW) showed that while women in the finance industry hold so few management positions, the pace of the hiring of women has also slowed down in recent years.

“In no other industry is it so unlikely for women to reach a position at the level of the board or just beneath,” DIW said in the report.

In other UBS news, the U.S. arm of the company recently rolled out a new suite of commercial card products for its small to medium-sized business (SMB) customers. The co-branded Visa corporate cards offer small businesses a range of choices, including the UBS Visa Infinite Business card, the UBS Visa Signature Business card and the UBS Cash Rewards Visa Business card, each with their own rewards programs.

UBS is currently only offering the cards to clients of its UBS Global Wealth Management operations, with UBS Head of Card Program Fred Jubitz saying the card products are designed for this particular client base.

“Research showed us that a significant portion of business owners value a cash rewards product, but they also value general rewards programs, such as travel rewards programs, as well,” Jubitz said. “So, we decided to build three products to serve client needs.”

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/personnel/2019/ubs-appoints-new-head-of-eu-operations/

Walgreens And Kroger Widen Retail Partnership

https://www.pymnts.com/news/retail/2019/walgreens-kroger-widen-retail-partnership/
http://securecdn.pymnts.com/wp-content/uploads/2019/08/walgreens-kroger-jefftalbot-richardashworth-457x305.jpg?#

With an expansion of a retail partnership between The Kroger Co. and Walgreens Boots Alliance, a Kroger Express grocery assortment and the Kroger Pickup service will come to 35 Walgreens locations in the Knoxville, Tennessee market. Also, Walgreens’ branded beauty and health products will be sold in 17 Kroger grocery stores, Supermarket News reported.

Kroger Vice President of New Business Development Jeff Talbot said in an announcement, “We continue to redefine the grocery customer experience and partner for customer value through our Restock Kroger transformation plan. Our growing relationship with Walgreens is just one more way Kroger is making life easier and better for even more customers – because everyone deserves to have affordable, easy-to-enjoy, fresh food.”

The 35 Knoxville Walgreens locations will provide customers with a selection of Kroger’s Our Brand items, such as its Simple Truth, in addition to national brand products. The assortment, which is said to vary from store to store, can encompass frozen foods, fresh meat, Home Chef meal solutions, shelf-stable products and produce as well as dairy.

In addition, a curated selection of health and beauty products from Walgreens will be available at 17 Kroger locations, including items in the personal care, beauty care, wellness and over-the-counter medicine categories. They are also said to include Walgreens Boots Alliance brands Soap & Glory and No7.

Walgreens President of Operations Richard Ashworth said in the announcement, “Working with Kroger, we’re continuing to reinvent our customer offer to meet shoppers’ evolving needs, which includes offering private-label grocery and health products at a great value, through an integrated omnichannel experience.”

The report comes as news surfaced in December of last year that The Kroger Co. and Walgreens were expanding an earlier pilot to introduce Kroger Express and Home Chef retail meal kits. Robert Clark, Kroger’s senior vice president of merchandising, said in a press release at the time, “We are redefining the customer experience in a variety of ways through Restock Kroger, including innovative partnerships like our test-and-learn pilot with Walgreens.”

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/news/retail/2019/walgreens-kroger-widen-retail-partnership/

eCommerce Marketplaces Aim To Make Custom Shoes More Accessible

https://www.pymnts.com/news/retail/2019/ecommerce-marketplaces-aim-to-make-custom-shoes-more-accessible/
http://securecdn.pymnts.com/wp-content/uploads/2019/08/The-Custom-Movement-sneakers-retail-marketplace-457x274.jpg?#

Personal experiences can inspire some entrepreneurs to start companies that change the way consumers buy custom sneakers online. The Custom Movement Co-Founder Akshar Bonu, for instance, grew up in the Philippines and went to a high school that had a uniform. The students, however, could wear whatever shoes they wanted. Those became “the only piece of apparel that I had full control over,” Bonu told PYMNTS in an interview. They became the piece he used for self-expression.

When he came to the United States, however, he noticed people wanted to wear certain shoes because they were limited in quantity and something that everyone else wanted. As he dived into sneaker culture in America, Bonu said he found it “frustrating for quite a few reasons.” For one, Bonu said “it was so difficult to get the shoes that you thought were interesting.” Once those shoes drop online, they sell out almost immediately. And people who don’t come from a well-off family may find it hard to wear shoes that are bought online and resell for, say, $1,000 on online sneaker marketplaces. “It’s very difficult to wear those shoes,” Bonu said.

He looked for cool, unique sneakers and found them on Instagram. He noticed there were independent artists making custom sneakers that are not only affordably priced but way more interesting, too. It almost felt the artists were putting their souls into the shoes. But there were many challenges with finding the independent artists, so Bonu said The Custom Movement was created as “the marketplace to buy custom sneakers” by independent artists. The idea is to become one place where consumers can discover all of them and purchase them easily as well as efficiently.

To purchase the custom sneakers, consumers can browse through the designs that are currently available and find a piece that resonates with them. When it comes to different variations of sneakers on the platform, one artist made a design that has a shattered swoosh. Other sneakers have designs like reflective flames or butterflies. In other cases, sneakers have lighting, neon splash or aqua splash. One sneaker has “fruit pebbles.”

The eCommerce Experience

When it comes to the company’s eCommerce experience, customers can purchase whatever design they choose. The artist, in turn, buys the base shoe either online or from a local retailer. The artist will make the design that they ordered and ship it to them. The vast majority of orders the site gets are people ordering pre-set designs, but artists are more than willing to make specific requests. Payments go through Stripe for credit and debit cards. Artists on the platform include TA Customs, Drip Kix, SMcustoms, Born Originals, Custom Layers and Mundus Hub, among others.

Giving independent artists the platform to design and sell sneakers, Bonu said, provides them with the full creative freedom to be “as crazy or experimental as they want.” They don’t have to subscribe to a specific brand identity or produce shoes that have mass-market appeal. The sneakers on the platform end up eclectic and diverse in design as well as taste. And Bonu says everyone will find a shoe that uniquely resonates with them in a way that a big brand aiming for mass-market appeal cannot. (Overall, a report from Grand View Research, Inc. in April 2018 found that the global athletic footwear market size is forecast to reach $95.14 billion by 2025.)

Over the long term, the company aims to empower artists on its platform to scale operations and help manage inventory to help artists make their work into a full-time profession. To that end, it wants to be more involved in their operations and helping them succeed. And 10 years from now, The Custom Movement hopes that every kid in the U.S. and around the world is wearing a shoe that has been customized by an independent artist. They would have a shoe that “no one else in their high school has” and be happy to wear because it expresses their individuality while being truly unique to them.

With the help of customization and eCommerce ordering, online platforms aim to connect consumers with independent artists and unique sneakers that express their individuality.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/news/retail/2019/ecommerce-marketplaces-aim-to-make-custom-shoes-more-accessible/

How Cafes Created The Momentum That Made Oat Milk 

https://www.pymnts.com/news/retail/2019/how-cafes-created-oat-milk-demand/
http://securecdn.pymnts.com/wp-content/uploads/2019/08/Oat-Milk-457x314.jpg?#

Plant-based milks are incredibly trendy as of 2019, but are far from a new phenomenon. Soy milk (or something quite like it) has been on the menu in China since the 14th century, and an early variant on almond milk has been around since the Middle Ages. In more recent memory, soy milk began taking modern markets by storm in the early 1970s, growing steadily in sales and peaking in 2008 with annual sales of $1.2 billion.

But about a decade ago, soy lost some of its shine with concerns that it might not be as healthy or environmentally sound as people had hoped – and besides, there was a new plant-based sensation in town. The rise of almond milk (and other nut-based milks) about a decade ago was sharp. By 2015, almond milk was outselling soy nearly three to one, and by 2018 it had surpassed soy’s $1.2 billion peak.

But almond milk has some issues. Growing almond is environmentally costly – particularly in terms of water costs, given that 80 percent of the world’s almonds are grown in drought-prone California. And the mitigating factor is not exactly comforting: There aren’t actually that many almonds in a typical container of almond milk. According to Cheryl Mitchell, the chief scientist of Elmhurst Milked, almond milk as we know it is mostly water, oil, sugar and gums emulsified with a light dusting of nuts on top.

Also, according to one Vox writer, it has some consistency issues.

“I would not call it creamy, exactly, but even in coffee, it mostly does the job,” Rachel Sugar noted.

Luckily, there is no shortage of “milkable” plants in nature. Apart from literally any variety of nut, one can also pick up a carton of hemp, pea, quinoa or coconut milk at their local health food startup.

But for coffee drinkers – particularly those who have been living in a major U.S. metro for the last two years – the alternative milk of the moment is oat. It is likely the brainchild of Swedish food scientist Richard Oste, the founder of Oatly, who in the mid-90s figured out the process for extracting “milk” from oats. The product was not popular at first – other than a small international collection of dedicated drinkers, oat milk was mostly an unknown commodity for the first 20 years of its existence. In fact, when Oatly CEO Toni Petersson first took over in 2012, he himself didn’t really know oat milk existed.

What changed the game for Oatly specifically, and oat milk in general, was a different go-to market. Instead of trying to sell their product to consumers writ large, they focused their recruitment efforts on independent coffee shops and baristas, believing that with the right brand ambassadors, they could convert consumers to the wonders of oat milk.

“It created that discovery experience for consumers,” said Mike Messersmith, Oatly’s general manager. Consumers trust their baristas, and baristas know their customers (particularly their dairy-free ones) and are in a unique position to push new products.

Which they did – with much greater success than initially anticipated. Oatly launched in the U.S. in 2016, with a handful of high-end New York City coffee shops offering its product. By 2017, that had grown notably to over 200 stores, but still marked a fairly under-the-radar start. By 2018, news headlines were bemoaning the national oat milk shortage, which left enthusiasts from the Wesleyan College campus to the streets of Brooklyn bereft at the possibility of oat milk-free coffee. The company had ramped up production by 1,250 percent in response to the spike in interest, but still found it difficult.

“How do we supply when the growth is this crazy?” Petersson asked.

And, of course, other firms have been ready and willing to step in and help meet that supply – from established names in the oat game like Quaker to legacy milk players like Hood that are pushing their first plant-based product.

“I think it would be incredibly hypocritical of us as a company if we said both that we believe oat is the best source ingredient – the best product from a nutritional, environmental, sustainability basis – but then also we should be the only ones that do it,” Messersmith said. “I think the reality is, we would be thrilled if the entire category was nothing but oat milk tomorrow.”

As long as it’s good oat milk, he clarified. For a product that is still new to the market, bad versions are the bigger problem, not competition and variety.

——————————–

Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/news/retail/2019/how-cafes-created-oat-milk-demand/

How Cafes Created The Momentum That Made Oat Milk 

Plant-based milks are incredibly trendy as of 2019, but are far from a new phenomenon. Soy milk (or something quite like it) has been on the menu in China since the 14th century, and an early variant on almond milk has been around since the Middle Ages. In more recent memory, soy milk began taking modern markets by storm in the early 1970s, growing steadily in sales and peaking in 2008 with annual sales of $1.2 billion.

But about a decade ago, soy lost some of its shine with concerns that it might not be as healthy or environmentally sound as people had hoped – and besides, there was a new plant-based sensation in town. The rise of almond milk (and other nut-based milks) about a decade ago was sharp. By 2015, almond milk was outselling soy nearly three to one, and by 2018 it had surpassed soy’s $1.2 billion peak.

But almond milk has some issues. Growing almond is environmentally costly – particularly in terms of water costs, given that 80 percent of the world’s almonds are grown in drought-prone California. And the mitigating factor is not exactly comforting: There aren’t actually that many almonds in a typical container of almond milk. According to Cheryl Mitchell, the chief scientist of Elmhurst Milked, almond milk as we know it is mostly water, oil, sugar and gums emulsified with a light dusting of nuts on top.

Also, according to one Vox writer, it has some consistency issues.

“I would not call it creamy, exactly, but even in coffee, it mostly does the job,” Rachel Sugar noted.

Luckily, there is no shortage of “milkable” plants in nature. Apart from literally any variety of nut, one can also pick up a carton of hemp, pea, quinoa or coconut milk at their local health food startup.

But for coffee drinkers – particularly those who have been living in a major U.S. metro for the last two years – the alternative milk of the moment is oat. It is likely the brainchild of Swedish food scientist Richard Oste, the founder of Oatly, who in the mid-90s figured out the process for extracting “milk” from oats. The product was not popular at first – other than a small international collection of dedicated drinkers, oat milk was mostly an unknown commodity for the first 20 years of its existence. In fact, when Oatly CEO Toni Petersson first took over in 2012, he himself didn’t really know oat milk existed.

What changed the game for Oatly specifically, and oat milk in general, was a different go-to market. Instead of trying to sell their product to consumers writ large, they focused their recruitment efforts on independent coffee shops and baristas, believing that with the right brand ambassadors, they could convert consumers to the wonders of oat milk.

“It created that discovery experience for consumers,” said Mike Messersmith, Oatly’s general manager. Consumers trust their baristas, and baristas know their customers (particularly their dairy-free ones) and are in a unique position to push new products.

Which they did – with much greater success than initially anticipated. Oatly launched in the U.S. in 2016, with a handful of high-end New York City coffee shops offering its product. By 2017, that had grown notably to over 200 stores, but still marked a fairly under-the-radar start. By 2018, news headlines were bemoaning the national oat milk shortage, which left enthusiasts from the Wesleyan College campus to the streets of Brooklyn bereft at the possibility of oat milk-free coffee. The company had ramped up production by 1,250 percent in response to the spike in interest, but still found it difficult.

“How do we supply when the growth is this crazy?” Petersson asked.

And, of course, other firms have been ready and willing to step in and help meet that supply – from established names in the oat game like Quaker to legacy milk players like Hood that are pushing their first plant-based product.

“I think it would be incredibly hypocritical of us as a company if we said both that we believe oat is the best source ingredient – the best product from a nutritional, environmental, sustainability basis – but then also we should be the only ones that do it,” Messersmith said. “I think the reality is, we would be thrilled if the entire category was nothing but oat milk tomorrow.”

As long as it’s good oat milk, he clarified. For a product that is still new to the market, bad versions are the bigger problem, not competition and variety.

——————————–

Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

Voice Promises To Play A Big Retail Role This Holiday Season

https://www.pymnts.com/news/retail/2019/voice-promises-to-play-a-big-retail-role-this-holiday-season/
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When it comes to the holiday shopping season — an increasing area of focus for retail as the year starts to wind down — it’s not so much about the trends we will see, perhaps, as the trend we will hear.

That’s because voice-assisted retail promises to play an even bigger part in shopping and purchasing this year than it did last year. And that’s saying something.

Voice Growth

Indeed, Amazon’s record-breaking holiday shopping season last year was powered in part by voice-activated shopping, with the eCommerce giant saying orders placed via Alexa were three times higher than the year-ago holiday shopping season.

According to Amazon, in addition to seeing voice orders jump three times compared to a year ago, Alexa was also called upon hundreds of thousands of times to help consumers find cocktail recipes — with eggnog and Moscow Mules among the most requested holiday drinks. Other milestones for Amazon’s voice-activated digital assistant include consumers listening to hundreds of millions of more hours of music compared to a year ago, while customers asked Alexa to turn on the holiday lights tens of millions of times during the holiday season with the number one request: “Alexa, turn on the Christmas tree.” What’s more, Amazon said customers used Alexa almost twice as much on Fire TV devices during the holidays when compared to the same period a year ago.

Beacon Role

Beacons, too, promise to play a bigger role this holiday shopping season, according to a fresh analysis. “Many retailers use beacons now, but they’re almost always hidden,” that report said, “There’s really no reason for beacons to be hidden. By being more transparent with in-store technology, brands can help dispel some of the negative connotations around “push marketing.” Shoppers know they’re there and should have the option of communicating with the beacon for relevant content that helps them shop and gives those who want it a more streamlined experience.”

Also expect more creative uses of smaller retail spaces, that analysis said. “Retail spaces are going to be significantly smaller while endless digital aisles will continue to expand. During the holidays, brands want to showcase all of their products but will have less physical space to do,” that report said. “More brands will adopt showroom-type locations to exhibit 5 percent to 10 percent of the most popular inventory items on the floor while branded in-store tech or apps display the rest.”

Even so, global economic uncertainly could also play a role in the upcoming holiday shopping season. But retailers, both brick-and-mortar and online, could still build off last year’s lucrative season.

According to First Data, Thanksgiving and Black Friday showed growth of 7.1 percent, versus the pre-holiday period. That came on top of the pre-holiday spend growth of 2.6 percent year on year. Breaking down the numbers a bit, retail pre-holiday spend was the slowest growth seen in three years at 1.3 percent. However, First Data said Thanksgiving and Black Friday growth was up 7.5 percent, driven by strong growth in both eCommerce and brick-and-mortar. U.S. total retail sales jumped 5.1 percent from Nov. 1 to Dec. 24 compared to 2017, according to Mastercard’s SpendingPulse. That would represent the sales season’s biggest growth in six years.

The season, by the numbers, was a bit uneven. Department stores saw a 1.3 percent decline, after two years of sales growth. Department store eCommerce, on the other hand, increased 10.2 percent year over year.

That fact hints at the bigger takeaway, which is that digital and multichannel sales were the big winners across the holiday shopping season. Amazon reported a record-breaking holiday season and was reportedly a major beneficiary of confident consumers’ appetite to shut down 2018 with some serious spending. Overall digital sales surged upwards 19 percent in 2018.

Get ready — the holiday season is just about upon us.

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The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

https://www.pymnts.com/news/retail/2019/voice-promises-to-play-a-big-retail-role-this-holiday-season/