Square has been getting a lot of attention since its launch last month for the iPad, and with today’s official launch for the iPhone, the traction should increase.

Square is the free credit card reader for mobile devices, developed by Twitter co-founder Jack Dorsey. It turns the iPhone or iPad into a credit card processor allowing individuals and small companies to accept credit card payments while avoiding the need for a merchant account and hefty transaction fees.

In all honesty, a big factor in Square’s potential success is the fact that, as opposed to a lot of m-payment services that are coming out, Square is rather backward facing in the sense that is built for a world that still uses credit cards. It’s not expecting users to adopt new behaviors; it’s making it easy for already established behaviors to spread – both physically, with Square’s portability, and socially, as it makes credit card transactions affordable to merchants and individuals who can’t pay the normal fees.

Only one in five businesses with revenue under $100,000 accepts credit cards, according to research by The Federal Reserve Bank of Philadelphia cited in Fast Company. In San Francisco’s Chinatown, for example, you see retailers lose sales everyday because many do not accept credit card payments despite high rates of domestic and international tourist traffic.

While San Francisco is unique in that regulations in many of its neighborhoods have kept chain stores from forcing small business out, being able to process credit card transactions is imperative for these stores’ long-term survival. Having an independent ATM is not enough – most people don’t want to pay the hefty fees to get cash when the store down the street takes cards.

Will Square help small business? First of all they need to adopt it, and the devices that drive it, which will be the biggest challenge.

(Fast Company has posted a wonderful overview of Square.)

The consumer cloud is set to grow. ABI Research predicts that revenue from consumer use of cloud-based backup/storage sites will grow from $75 billion in 2009 to over $372 million in 2015, a CAGR of 27.89 percent.

“The consumer value proposition for many Cloud Computing applications is simple; they’re free,” said ABI Research practice director Larry Fisher. “Most of the 1000+ US consumers responding to a 2010 ABI Research survey said they were hesitant to pay anything for use of a cloud-based service site.”

The major hurdle for cloud revenue is convincing consumers to pay for premium services. In 2009, 88 percent of cloud storage/backup services used by consumers were free.

143 million consumers used free or low-cost cloud applications in 2009, and ABI expects that number to reach 160.6 million in 2015. Obviously, the growth in revenue is dependent upon consumers switching to paid models.

ABI predicates this growth on several factors, mainly price and ubiquity. Also driving adoption will be the growth of the netbook market, a market whose future has been increasingly questioned of late. Also driving growth will be other mobile internet devices, the growing public awareness of cloud computing, and disasters that result in utility service disruptions.

ABI believes that, once consumers are comfortable with the cloud, they will be willing to upgrade to paid versions for additional space.

“Many companies will provide free access to their web-based applications to consumers in the hope that they’ll be sufficiently impressed to bring their enthusiasm for these applications to the businesses for which they work,” Fisher said. ”Commercial pricing is then based on the number of users and the amount of storage used.”

(Image: Wikipedia)

User reviews of products are now an indispensable part of online shopping today, seen as useful for consumers, brands and e-retail Web sites alike. Denise Zimmerman, President and Chief Strategy Officer for NetPlus Marketing Inc. gave her thoughts on negative consumer reviews on social media sites to eMarketer today.

At first a frightening new feature of online shopping for retailers, it became an accepted and now positive aspect of the e-commerce environment. Amazon.com was one of the first sites to institute the practice, as well as the one to help determine that it was a helpful business driver. If a product is good, Zimmerman explains, positive reviews far outweigh negative ones. The company also receives valuable feedback about problems.

With social media, retailers can respond to customers in a meaningful way. Before, the feedback travelled basically in one direction. “A lot of companies and retailers weren’t necessarily set up then to address these issues in terms of responding, and if something came to light that they needed to address from a product perspective, the organization dynamics were really not in place.”

To deal with negative buzz, Zimmerman asserts three options: Ignore, respond or erase. She asserts that there are times when ignoring social media feedback (or even deleting it) is appropriate - comments may not be relevant to the company, or it might be an isolated incident. Also taken into account is where the customer rates in social media influence - Twitter followers, Facebook friends or fans all indicate how much social clout this person has.

Another indicator of how to react to negative feedback is the credibility of the issue. It is a very real fact of the Internet that people love to complain in a public, yet anonymous forum. People may denounce a product for the sake of the act or sling abusive remarks. “You have to bucket it. And by the way, you have to plan for all this. This is not a reactive thing.”

The Top 100 Retail Satisfaction Index was released yesterday from ForeSee Results (request page for PDF). The Spring 2010 research white paper quantifies and interplays the two key success indicators for the top 100 online retailers: satisfaction and purchase intent. Satisfaction with top e-retailers recovered from lower scores last year to an all-time high of 78. Nearly all retailers saw a rebound to past or above levels.

Netflix enjoyed its fourth year at the top with its score of 87. Amazon scored 86 and came in a close second, its placing for the last six years. Of interest, the number of e-retailers scoring above eighty has increased 560 percent from five Web sites in 2009 to 28 Web sites this year. The best performers on average were the Books/CDs/DVDs category and the Specialty (Non-Apparel) category, with aggregate scores of 79.

This kind of online satisfaction leads to loyalty, sales, and word of mouth recommendations, according to Larry Freed, President and CEO of ForeSee Results. Statistically, when shopper satisfaction rises above 80 the following occurs:

• 73 percent are more likely to purchase online
• 67 percent are more likely to purchase from the e-retailer next time they’re in the market for a similar product
• 47 percent are more likely to purchase offline

Analyzing purchase intent in tandem with satisfaction can show how effectively a given site is functioning. If both are above average, the company is effectively leveraging their site to increase sales across channels. Examples of high dual-performers are Avon, Apple and L.L.Bean. Not only are shoppers likely to return and spend again, but 72 percent recommend to others and retail their positive impression for the retailer overall.

Online, price continues to be one of the highest priorities, so e-retailers "should focus on creating perceptions of greater value to achieve the greatest improvements in satisfaction and purchase intent." Variety, usability and accuracy are also key to satisfaction.

A report on Twitter
from Edison Research was released yesterday that shows who are tweeting these days. This year 87 percent of people have heard of Twitter, up from five percent in 2008 and 26 percent in 2009. Despite the difference in adoption, awareness of Twitter is nearly the same as awareness of Facebook (88 percent). Even though awareness of Twitter is so high, only seven percent of respondents ever use Twitter - a huge increase of membership from two percent in 2009.

Twitter users are habitual - nearly one third use the service at least once per day, thirty percent at least once per week. Only fifteen percent use the service less than monthly. Still, Facebook is far more popular - over forty percent of respondents have a profile on the most popular of social networking sites.

From those who use Twitter at least once per month, African Americans make up 24 percent of the general Twitter population, while only making up 13.5 percent of the total US population in US Census data
from 2008. Relating to the black demographic in this country (African-American and multi-race Black individuals combined), the median age is younger than with Whites. This was cited as a possible explanation of the discrepancy between US and Twitter Black populations by Business Insider today
- the median age is thirty, "a full seven years younger than for white Americans." Since Twitter is more popular in the 25-34 demographic, the population is skewed towards the age for more potential microbloggers.

The BI article also poses that Blacks and Hispanics access the Internet more from mobile devices than Whites. Since Twitter’s functionality lends itself well to mobile devices, and more Twitter users also access the mobile Web, it is again more likely that more users will be Black. Additionally, a higher proportion of celebrity Twitter users are famous African Americans, most significantly pop culture empress Oprah, making Twitter even more mainstream for Black Internet users.

Q Interactive’s 2010 study called "The Social Graces of Social Gaming for Women" illuminated practices and opinions by women who play games on social networks or about their children’s gaming.

Moms answered questions about their under-eighteen children: 51 percent play social sites games like Farmville, Mafia Wars or Bejeweled. These kids are often allowed to play daily (41 percent) or several times per week (35 percent). Twelve percent of mothers allow their kids to play several times per month, eight percent only on special occasions, and four percent never allow their kids to play.

Children are rarely allowed to engage in paid gaming and online purchases - only seventeen percent of children under eighteen are permitted to make these types of transactions. Most often this takes the form of a prepaid game card (eight percent), or mom’s credit card (four percent). Of the 29 percent of children that are allowed to spend on social gaming, most spend less than twenty dollars per month.

The responding women play games on social networking sites more often than the children referred to above. 64 percent play these games, with favorites including Bejeweled (31 percent) and Farmville (26 percent). Over half play daily and thirty percent play weekly.

This new familiarity and frequency with casual games has led 58 percent of these women to consider themselves "gamers," defined by the study as someone who "spends their leisure time playing or learning about different online games." On a more dramatic level, seven percent say they are "obsessed" with online gaming, and 45 percent have a friend that they would call the same.

Despite the popularity of social network gaming, 72 percent would not use their own money to play, and 55 percent fear that these games will move to pay format. Small percentages would be willing to pay, mostly on a pay-as-I-go system (ten percent) or as a monthly subscription (nine percent), but 77 percent would not continue to play.

Forty-eight percent of U.S. online banking consumers are interested in using P2P payments as part of their banking service, according to research by NACHA-The Electronic Payments Association and eCom Advisors in partnership with FIS and PayPal.

Given who’s publishing the research, the results probably trend a little more  positive than reality, but they’re still worth looking at. A segment of consumers has been comfortable with PayPal for years, but in the next year or two, especially with the new payment models emerging in the mobile market, expect P2P payments to blossom.

While people are increasingly interested in using P2P, the majority of those who are would be willing to do so only within in their most immediate networks. Thirty-three percent of consumers would be willing to use P2P to send money to a child at college; 31 percent to a family member, friend, or associate overseas; and 25 percent would be willing to use P2P to split the cost of a gift with co-workers, friends or family members.

Not surprisingly, it’s those already using mobile banking who would be most interested in P2P payments. Consumers who have used a mobile phone to pay a bill or view their bank information in the last 30 days were most likely to want to adopt P2P. Of the total market with internet-enabled phones, this is between 20 percent (those who have paid their bills via mobile in the last 30 days) and 27 percent (those who have checked their bank account in that period).

Sixty-two percent of those who paid bills online went directly through the retailer’s site, not that of their financial institution.

“Today’s active mobile banking consumes are clearly attracted to the notion of replacing cash and check transactions with P2P payments via their mobile devices,” said Paul McAdam, a Partner at eCom Advisors. “In addition to targeting marketing communications to encourage this segment to adopt P2P, financial institutions should also integrate P2P payments with their mobile banking services.”

Less than one-half of online Americans would be extremely interested or very interested in using cloud services, according to a poll from Harris Interactive. Nearly one-third (31 percent) would not be interested at all.

The service respondents are most interested in using is also the most established: email. Services they are least interested in using are financial services (53 percent).

As with everything tech, the willingness to use the cloud becomes more positive the younger the demographic trends.

The biggest concern is of course security. Eighty-one percent of respondents are concerned with security, and 84 percent said they would continue to save data and documents to physical storage devices. And only 25 percent would trust cloud services with their personal information.

Thirty-eighty percent would not be interested in the cloud because it sounds too complicated to use. And that’s perhaps one of the big obstacles to the cloud – “cloud computing” gives the idea that it is radically different than the computing that users already do.

It’s strange that we continue to talk about this strange entity called the cloud, seeing as how so many users are already comfortably there. People are already spending most of their computing time in the cloud, and a lot of their data is already there.

If the sweeping changes that Facebook announced at yesterday’s f8 developer conference are successful, users will become more open to having their data and personal content all over the internet.

Consumers who conduct searches in local directories are more likely to make a purchase than those who use search engines. According to information from the Yellow Pages Association’s "2009 Local Media Tracking Study," about forty percent of users intended to make or made a purchase after consulting Internet-based or print yellow pages.

"Our biggest value to local businesses is our ability to generate qualified leads from consumers who are ready to buy something," said YPA president Neg Norton, in the article. Advertisers see a high return on investment for their initial cash input, on average about $15 for every dollar on local display ads.

A separate study in referenced in eMarketer found that nearly half of Internet users look for product and service information in yellow pages, compared to ninety percent who use search engines.

But despite this disparity between search media, the YPA study showed that the results from print and Internet yellow pages were favored. 68 percent trust local information over search engines, and 67 percent believe it more accurate.

The study also showed a growth in the reach and frequency of Internet and print yellow pages between the first and second half of 2009. The number of respondents who use print yellow pages grew from 51.5 percent to 57.6 percent, and an increase of nineteen percent in references to print for those who use them. For Internet, the percentage of users grew from 31.6 to 37.9 percent, while Internet yellow pages usage frequency grew 24 percent per user.

"The combined reach of print and Internet Yellow Pages provides small and medium-sized business with the strongest platform available to target potential customers," Norton said. "In today’s fragmented media environment, Yellow Pages’ hybrid approach is the best way to attract consumers who get their information from multiple places before making a purchasing decision."

Consumables is one of the last barriers of online retail - and PetFoodDirect.com is a company that is changing consumers’ habits when it comes to shopping online for pet supplies. With a full spectrum of pet foods from off-brand to specialty, PetFoodDirect’s selection, combined with the convenience of delivery that this site has such high customer loyalty.

Vice President of Marketing Colton Perry told eMarketer today that the 140 brands that the site carries is far more than Petco or PetSmart, many of which customers have a hard time finding anywhere else. “Our customers have become more aware of what they are putting in both their bodies and their pets’ bodies and are more educated on the different diets you can feed a pet.” According to Perry, his typical customer is a woman over forty, but all types make up their demographics. Additionally, about eighty percent of orders are for pet food, and about sixty percent are products for dogs.

But selection and convenience are not the only features that make PetFoodDirect unique. They do not really compete on price, so items may be slightly more or less on particular products at other retail establishments. “But we are very value- and promotion-driven,” Perry explains. “Once you become a customer, we offer specific discounts.” Since the company began in 1997, they have learned that online businesses must have a very strong customer service presence. They currently use a Zappos-like, customer-embracing model. New management has refocused the customer service by doubling the staff in the call center for higher volume, and a dedicated electronic inquiry group.

To get people to try new things, PFD produces a newsletter and introduces new products through content and merchandising. “We have a recommendation engine but we don’t get in your face.” Instead, the engine is based on other customers’ buying patterns, suggesting slightly higher margin items so it is not a hard upsell.