Why Relationships and the Shopping Experience Will Define Mobile Payments

October 2, 2013

in IoT Internet of Things, Mobility, Smart Retail, Strategic Foresight

ShoppingThe coming changes to mobile location services will be highly disruptive to  advertising and promotions,  payments and relationships. For two key reasons. Every product or brand is going to become a lot more invested at POS (think supermarkets and how they will change promotion practices when they know where you are in the aisle) and the relationship (and product loyalty details) they have with the customer’s pocket. While the mobile device in your pocket is already encouraging retailers to augment the in-store experience it is rapidly going to redefine profit centers. My theory is – it will have a radical impact on how supermarkets and consumer product companies work together and more broadly all suppliers to retailers.

The quotes referenced below all point to posts written by Brian Roemmele who captures many of the reasons I’m excited about this space. If you are interested in retail, payments and customer relationship building, they are worth reading in more detail.

As a researcher I have identified about 245 use cases for what is now known as iBeacons.  About 88 are in payment applications.  There are about 45 that center around micro location.  The remainder are quite useful and rather non obvious.  via (40) iBeacons (iOS SDK Feature): What are some interesting applications that are enabled by iBeacons technology featured in iOS 7? – Quora.

A company bought by Apple which will enable them to create iBeacon like iTags. Think about clothing, packaging where range is more limited.

The Passif technology is how Apple will power these nano devices known as iBeacons.  The iBeacon technology will allow for merchants to activate a number of new features that will be a part of future iOS releases and future iOS devices.  The new iBeacon devices will cost pennies to manufacture and will likely be given to larger merchants by Apple, for little to not cost. 

via (40) Apple + Nikola Tesla Inspired Technology May Ch… – Accepting Payment Cards – Quora.

I certainly know the following is true for large retailers and in fact for smaller retailers and services. I termed this the “social register” some time back although really it’s relationship and experience engagement by the seller for the buyer.  What’s true for big and small stores in Brian’s post is payments isn’t the way to optimize the experience.

Some of the reasons these retailers are doing this themselves:

  1. Retailer’s Agenda – They want “Mobile Payments” as a tool for enriching the customer marketing, shopping and purchasing experience. Not as a way to move a payment company’s agenda.
  2. Platform Agnostic – They want the ability to deliver a delightful experience to all customers, using all platforms. Not a bias to just one or two platforms.
  3. Retailer Access To Data – They want the same access to all data as they have had for over 100 years.
  4. Integration – They want understanding of and compatibility with backend systems, inventory management, along with connections to retailer credit, loyalty and marketing programs. They do not want to change merchant service providers.
  5. Flexibility – They want the need to be able to rapidly change the platform as changes in the market dictate.

via (40) Brian Roemmele’s answer to Why are Target and Walmart creating their own mobile payment solution? – Quora.

And then….  I love his examples that talk consumer anthropology and effectively how QR codes got Starbucks on their way. Starbucks, like the iStore is definitely one to watch, in rolling out the next wave of payment changes. With millions already having a Starbucks App, it will be the experience not the payment that comes first and it will start at the door or even outside.

The idea of using a barcode to enable a Payment Card transaction has been around since the 1980s.   Starbuck’s use of the 2D barcode was the creation of the mobile wallet and NFC genius, Benjamin Vigier.   Ignoring all of the debate I have seen in the Payments space, Benjamin choose a path for Starbucks that is a spectacular success.  This practical and pragmatic approach was not arrived at in an ivory tower.  Starbucks wisely choose to uses the  educated insights from their own internal experts and experts in merchant anthropology and consumer anthropology.  The results?  A simple to deploy mobile payments solution across all of the POS systems with a simple yet highly viral way for customers to adopt the system. It may not be disruptive, nor necessarily a technological marvel, but it just works.

via (40) Online and Mobile Payments: What retailer is the most successful in mobile payments? – Quora.

In the midst of many other announcements last week I’d miss that Intuit opened up their API and Square is now going to integrate Quickbooks/services into what it’s trying to do. Brian makes a great case of why and what it actually means. My interpretation is simple. Every store has a backend, and that’s the data. You don’t just throw it out and you do want progress. Intuit has the same problem. What they have to solve is augmenting the experience from the time the customer first comes in the door etc.

Today Quickbooks and Square declared a bit of a truce[2], perhaps even a “white flag” of surrender. The “disruptor” is working with the legacy “disrupted”. They announced an API partnership that allows Square merchants to easily integrate most of the data that Square collects on behalf of the merchant, directly into Quickbooks. This is really a monumental shift for Square.

via (40) Competitors: Square And Intuit Agree To Work To… – Accepting Payment Cards – Quora.


Previous post:

Next post: