Copyright 2012. All rights reserved, Mobile Wallet Media, Inc. News & Opinion on the Future of Mobile Payments & Commerce!
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Search, Social or SuperCommerce? Future Universal Commerce Gateways
The key to commerce shall be the seamless completion of the value and convenience chain for consumers and merchants alike.
How may Google, Facebook and First Data disrupt Daily Deals? Will EVOLUTION lead
to REVOLUTION? How about M&A?
Can one live on deals alone?
PayPal, Google Wallet, ISIS, Square & more. What are the barriers to adoption and how they may be overcome?
Where will payments be in 2020? Will mobile over take cards & cash? Learn how a 'Secure, Social & Rewarding' wallet will disrupt it all?
NFC is Tortoise and the 2D Bar Code is the
hare. Retailers, simplify the myriad of choices!
Learn how DISRUPTION is RIPE for 2013!
Cause Commerce can set you apart! Learn what it is, why it will soon be, non-optional, and how it will add to your Social Brand.
Loyalty LIKE Never Before!
Companies and leaders, to remain relevant and profitable, must embrace innovation or risk becoming irrelevant or extinct.
Top 5 Killers of Innovation!
Connect the dots! See the big picture!
If your Mobile Strategy is unclear, you may be
missing key pieces. Get a holistic perspective.
How will retail sales soar in the coming years?
Search + Social + Savings + Sharing + Reviews + Products + Big Data + Proximity + Security + Fun + Video + Pics + CPG Offers + ? (TBD) + Mobile Wallet
The Mobile Wallet will be at the crossroads of ALL commerce by delivering unparalleled convenience!
By Randy Smith,
Mobile Wallet Media
October 19, 2012
About Mobile Wallet Media
Mobile Wallet Media is a news media, analyst, marketing and consulting firm focused on the future of mobile: payments, marketing, loyalty commerce, security, prepaid, virtual currency, daily deals and the convergence of them all with social and local. The Chief Editor, Randy Smith, was the primary founder, inventor and former CEO of MobilePayUSA, a TechCrunch Disrupt Startup Alley Winner.
The convergence of Social & Rewards is here!
Learn how Top of Mind & Automation will rule! Maximize, Mobilize & Unify Ads & ROI!
Mobile Wallet Media is a news media, analyst, marketing and consulting firm focused on the future of mobile: payments, commerce, daily deals, security, loyalty, marketing, prepaid cards, virtual currency and the convergence
SuperCommerce is at the Cross Roads of All Commerce and Communcation
Conventional search via Google, Bing or Yahoo works quite well and will remain a foundation, but shall become more like Yelp, but only more seamlessly integrated with Social and the Mobile Wallet.
They say it is easier to get somewhere if you have good directions or go with someone whom has visited there before. While no one is always right in predicting future trends or events, (well, I can think of a few that lived thousands of years ago, but none today) I will attempt to describe why I believe SuperCommerce will be the future of all mobile commerce. Whatever you do read the article to completion to glean the most nuggets.
Reviews Paired With Social Will Be a Mainstay in Mobile Commerce
Yelp, founded in 2004, claims in Q2 of 2012 to have an average 78 million monthly visitors. They have had more than 30 million consumer reviews written by users. They make money by selling ads.
Yelp's site also states "Yelp was founded in 2004 by Jeremy Stoppelman and Russel Simmons, a former colleague at PayPal. Jeremy continues to drive the vision and product experience for the company, personally overseeing product development among other aspects of the business. Prior to Yelp, Jeremy completed his first year of Harvard Business School, but dropped out after founding the company. Before attending business school Jeremy was VP of engineering at PayPal."
In my opinion Yelp's model is a forerunner and part of a key foundation to the future of all commerce. They are already aligned with Google search and Facebook for Social. They are sitting at the crossroads, but there is much more to SuperCommerce than just Search, Social and Reviews. People value consumer reviews and opinions by anonymous people and even more by experts. But what they value perhaps most of all when it comes to preferences in retail is the opinion of their friends or family or an in-person testimonial of someone whom has bought the product, used the service, shopped at the store, stayed in a hotel, visited a location or had a meal in a restaurant.
Social media paired with reviews of all types, delivered thru the Mobile Wallet, at the time of the 'Point of Decision,' will be the model to emulate going forward. The tough part is tying it altogether with all the other vital systems and components SuperCommerce via the Mobile Wallet. The tough part is getting your seat at the table as 'Musical Chairs' plays out it's end game.
Social Media Paired With Mobile Wallet Is a Megaphone
It's time to turn your best customers into your best marketers and salespeople. WOM (Word of Mouth) marketing has always produced the best results. WOM marketing, with incentives to share, can extend the reach of WOM. But using Social Media to enable your WOM customers to share your offers in seconds may be the greatest tool of all within the Mobile Wallet and for all form factors.
Imagine it's a slow week night and you want to drum up sales, just create an offer to save 20% off till close and offer a 5% commission (or fill in the blank) on all sales generated by friends that shop and save before close. Email and text message those that have opted in and watch the sales roll through the door. If customers love your products and store, they are simply looking for a good reason to make a purchase or shop. You could also automatically enable your customers to share an offer redeemed through their social network.
Convergence is Convenience = SuperCommerce
Search is going to continue to evolve and improve results by using available data from previous searches, previous purchases, location and time of day. I just said a whole mouthful in the last sentence, but the reality is commerce and target marketing is indeed bleeding into one coherent system and exact science. It's all coming together into one junction box around a Universal Mobile Wallet Platform. Will there be multiple wallets to choose from? Yes, but wallets need to take advantage of all the value-adding technology they can to entice, engage and keep both the merchant and consumer content.
The 55-Chevy of Mobile Wallets
Have you ever seen the inside of an old car? Take a 55 Chevy for example. The amount of space in the engine compartment as compared to today is vastly different. Today engine compartments are full to the brim with parts. The added parts have improved fuel efficiency (by the way the 55 Chevy was the first car to have fuel injection), provided better breaking, added power-steering, air conditioning and heating, etc. The bottom line is they are much more reliable, safe, comfortable, powerful, fuel-efficient and easy to drive than cars built 50-60 years ago or even 30 years ago. Would you buy a car to use everyday that was 50-60 years old, let alone 20-30 years old? Of course not! Why? Because newer cars offer so much more. Who doesn't love the new car smell and the convenience of brand new cars having a full array of digital services via the onboard computer that also syncs with your phone? It will be no different with the Mobile Wallet. Right now Mobile Wallets are where the 55 Chevy is, but in just 5-6 years they may evolve to the level of the 2013 Chevy.
Google, Facebook, Apple, PayPal, ISIS, LevelUp, MCX, Square, payment networks, banks, processors and dozens more are key players in the battle for transactional revenues and the future gateway to consumer commerce. We'll drill deep to get a core sample of the future of mobile commerce.
Technology will Transform Loyalty, Offer Redemption and Target Marketing
The 80/20 rule in retail and likely many other industries is the rule of thumb that 80% of your business comes from 20% of your customers. These big spenders are often very tech affluent. They and the Millennials (18 - 29 year olds) live, eat and breath via their phone. Between these two target markets most of your business will come through, now, and especially in coming years and decades.
Targeting your big spenders is best handled using your own in house data and the best way to maximize their spending is through loyalty and special, and exclusive offers. And now with mobile, all offers will be linked to your Mobile Wallet and seamlessly redeemed and accounted for by the merchant all with a single click, tap, scan or wave. The barriers to adoption of carrying a card or coupon to redeem an offer will no longer be a barrier to adoption. To tap or click an offer via mobile or online and know that the offer is in your Mobile Wallet and instantly may be redeemed is the future of commerce. Of course this technology will also be readily adopted by Millennials. They will even demand it and take their business elsewhere if you do not have this option available for them.
In 2-4 years it will not be an option for a retailer to, not be embracing Mobile Wallets! It would be the equivalent of not accepting credit cards today. They used to say that if you were not in the Yellow Pages you did not exist. Now it requires a website and a solid SEO manager. In the near future a mobile storefront in and/or connected to the leading Mobile Wallets will be required.
There is even a step or two further this whole model will go, but I'll save it for another story or for a company that wants the exclusive access to such a model and information. I invented this model 2 years ago and still have not seen it in market today, but it is coming and it will be dominant.
So what we are seeing now in Mobile Wallets is akin to the 55-Chevy. The transformation that took autos 30-70 years will take just 3-7 years to transform the Mobile Wallet and the way we pay and shop.
The pace of technology used to double every decade, then every 5-years, then every 2-years. Now I believe we see paradigm shifting changes every year. One thing for sure there is no reverse gear in technology. Would you ever stop using the web, email, texting and your smartphone? This would essentially turn the clock back 20 years. Not that I did not love 1992, but we now live in a Digital World that requires embracing tech to communicate.
What the world will look like 5-years from now technology-wise will be vastly different than now. Hesitation to embrace all current trends in marketing, technology, payments and social will only leave one behind. To keep pace in this race requires an all out commitment to embracing innovation in order to secure relevance in the eyes of your customers and colleagues.
Savings Made Simple Will Make Convenience King And Lock In Advanced Sales
I've painted a picture of what this might look like in a past article so I will not go into too many details here. Daily Deals and coupons will need to trim their margins and discounts for major merchants and low-margin merchants to engage. The focus of advertising itself is about to be turned on it's head. The focus will be on capturing sales in the form of a prepaid voucher, prepaid card or purchase of virtual currency. This will serve to lock in sales for a specific merchant or a coalition or network of retailers. The Mobile Wallet will be the enabler of this. If a consumer has already committed their money towards a purchase in exchange for a 1-50% bonus deal or discount off services, then the sale is done. All the marketing in the world for customers will not circumnavigate the reality of the this change in the focus of advertising and move the sale from in-store to a budgeting and investment decision. Where else are you going to get an average of say 10% return on your money without locking it in for more than 30-90 days? Of course, merchants or networks may allow the customer to return their prepaid funds, but it will come at a price of 1-10% or likely something close to their net margin. Given enough time, competition and evolution and this is likely to play out as such. And remember you heard it here first (or not). If it does not come to be then I will admit I was wrong, but it seems logical does it not? By the way this ia a model of commerce and I've had stowed away since the late 90's. Gotta be a Homer at times! I have a baby due in December! You want further proof this is a trend that will play out. On September 13, Digital Transactions published an article on a company doing exactly what I described above and in previous articles. The company is named Marqeta and it seems they have proven their model to be successful.. They built their technology on a partnership with Discover. The cards they issue ride Discover rails. They are funded by Greylock Partners and Granite Ventures. They are on my radar for acquisition and/or cloning. I don't know what patents they hold if any. They say they do not have a focus on Mobile Wallets, but they may want to re-think this position. Although their cards may be seamlessly added to Mobile Wallets without any integration due to them being Discover cards, but they will need to find a way to plug into Mobile Wallets and display their savings or credits to be viewed and redeemed. Also, they are missing several value-adds/components to the final business model which will produce SuperCommerce. I've touched upon such components before, but the exact and complete model I'll save for another day or share exclusively with a single company or Mobile Wallet network.
While we are on the subject of savings, Seth Priebatsch, founder, chief executive officer and “chief ninja” of SCVNGR, as known as LevelUp, stated in a recent article by PYMNTS.COM that interchange is going to zero. The reason being, he said in summary, is that there is much more money in marketing than there is in processing payments. This has always been my theory as well (since 1997-98), since I found out that merchants spend on average 4-6% on marketing and advertising and only about 2% to process a payment. An MCX-like coalition is something I envisioned as well in the late 90's, except it was only around a prepaid card, sort of like PayPal's or Marqeta's model back then. I added the Mobile Wallet to the equation near two and a half years ago. Here too there is a specific model that will work best. I've yet to see all the pieces laid out individually or collectively that will be mature model of SuperCommerce.
Sharing Shall Become Commonplace in Commerce
Showrooming is an Opportunity to Engage Customers and Close Sales!
A recent survey said near 50% of people using smartphones have admitted to 'Showrooming.' For those of you not familiar, this is where you are in a retail store and use your smartphone to check what the price is on a product online. For this is part of the future, the answer is simple; engage with your customer through your mobile app and WIFI. You will need to train staff to do this well. You should empower your staff and app to recognize what shoppers are doing, what products they are looking at and even see if they are showrooming your store. From here you can make them a counter offer or begin by asking if they could use some help in finding a product they may be looking for. From there, the normal sales process takes over and you can train and empower staff to close sales on the floor, including discounts and provision the app to take over if they do not buy in the store.
Big Data Enables Personalized Offers Via Proximity and Past Purchases
"Big Data" is just that big! There are many pieces and suppliers of the Big Data value chain. Retailers have shopping data history, including the SKU data. Banks have purchase history across many stores tied to cards issued. Credit bureaus know your credit history. Geo-Location enables targeting offers based upon location. And the Mobile Wallet provides the connection to the mobile shopper, including past purchase history and even multiple cards used. Mobile Wallets can also house unlimited loyalty programs, coupons and prepaid gift cards or Daily Deals. The key data Mobile Wallets will not have is merchant's SKU data, that is unless the merchant has their own proprietary Mobile Wallet or the Mobile Wallet has partnered to share a mobile ID to conduct campaigns. I see this as a very likely exchange of data, with the exception that merchants, will only receive a Mobile ID Tag from the Mobile Wallet provider. I'm not sure if the merchants will share SKU data? Of course this is an over-simplification on a subject that could and will be discussed in greater detail at a later date.
Security Must Pass The Consumers Test of Trust to Be Engaged
I've gone over this in depth before. Read Week 2 of the 7 S's Required for Success in Mobile Payments.
I can sum up mobile commerce security in one quick statement. Mobile payments offered by the largest players will be much more secure than using your debit or credit card today online or offline.
A Picture of What SuperCommerce Might Look Like Using Mobile Wallet App
Let's take a look at a scenario of what SuperCommerce via a Mobile Wallet App might look like.
You are in a new downtown that you are not familiar with and just finished a long day at the conference. Your boss set a dinner meeting with some new clients and requested you assist to make dinner reservations. He just gave you notice at 6:10PM for a 7PM dinner. You guess you will need to make reservation in the next few minutes to be seated by 7PM.
You pull out your smartphone, open your Mobile Wallet app and login. You tap into search "Italian Restaurants." Next a 5-second video plays inviting you to dinner and ends with an offer and a link to view the Mobile site of the restaurant. You tap on the link. From here you are given the opportunity to make a reservation. You also notice, that with an advanced reservation for four or more, you are served a complimentary drink while you wait for your table. Score!!
The wait time says it's a 30-40 minute wait. You decide that time frame can work and so you click on the menu to review and check prices. Still looking good, the reviews are positive, but you don't always trust them and so you check reviews of the restaurant. Ah, three of my friends have done reviews and all other reviews appear good. They affirm the food and the atmosphere were great and they loved the pesto sauce and cheesecake.
You tap on the map to see that it is 5 blocks away. You check out two or three other restaurants and after reviewing them, you decide that the first option is still best. So you go ahead and tap to make a reservation.
It is now just 6:20PM. You receive an instant confirmation and the app notifies you that you will receive a text or notification when your table is ready. Along with your confirmation, you are given the option to share the reservation details.
You pull up your email and add the emails forwarded to you by your boss to your contact list. You now return to your Mobile Wallet and tap on the share button. You choose gmail contacts, add all parties coming to dinner, hit the send button and you are done!
You arrive at the restaurant by 6:35 and are happy to find a nice atmosphere. It's all good now! As you walk into the restaurant, the hostess greets you by name and says "Welcome Mx Jones! Your table will be ready in 15-20 minutes, can I get you a drink while you wait? it's on us!"
Your drink is delivered in minutes and while waiting you receive a notification that you will receive a $25 digital gift card for a future visit when you spend $250 or more (the reservation is for 8). You know your boss is a big spender on clients as such and so you know you will go way over $250. You tap on the locations button on your app and see that there is another restaurant near your house. Score again! You say to yourself "This is like earning Air Miles only better!"
You wonder, "Where else I can earn free gift cards like this?" You see the mobile gifting app is powered by Gift Loyal a sister company of I Like Loyalty. You see that they offer mobile gift rewards all over the country at many places you already shop. You tap on the join now button, share the site with your linkedin, twitter and facebook friends and receive confirmation and a free $10 gift card for joining! Your party walks in at 6:55PM and your phone receives a buzz as your table is ready. Your boss gives you a big smile of approval and you know if this meeting goes well your bonus is all but secured.
The meeting goes great. During the meeting you receive three messages from Gift Loyal. Three friends have joined and another $15 in gift card credits have been added to your account for referring them. As you stroll back to the hotel you try to keep from singing the tune "I love technology, but not as much as thee" from Napoleon Dynamite (OK, maybe only a nerd like myself would do this).
From here let's describe each part of the equation to better dissect how and why commerce will play out in a way that matches the description below and the example above.
Using Video/Pictures to Convey/Convert Shopping to Sales in 5-Seconds Flat!
As described in the example above, a short video interrupted search to deliver 5-second pitch that directed the shopper to have the best chance of being found and presenting them in the best light. A 5-15 second video or even static picture may be best way to sway to snag customers before they walk into the 'Mobile Commerce Store," AKA, the Mobile Wallet.
That's right the Mobile Wallet is a shopping conversion engine, or at least that is what merchants and marketers alike will shape it to be. Should the wallet settings be customizable to adjust settings to prevent "Wallet-Sponsored Ads and Promotions" from popping up? Yes of course, but then you as a consumer will never know what you may be missing. Of course the answer is handing over control to the shopper and giving them the ability to craft their "Mobile Wallet World or Experience." Of course many smartphone and technology users won't bother with custom settings, which is what Mobile Wallet providers will hope and plan for. If the experience is too busy for a shopper they can move to figure out the settings and adjust to receive less offers and none at all. Or they will find another Mobile Wallet.
Fun Will Drive Mobile Commerce
This may be my favorite part of mobile commerce. Rather than earning points or cash back, what if you earned game credits? Earning gift cards is great and already being done. Tying in everyday purchases to earning free games can be a better loyalty program and incentive to those that enjoy video games. But let's not limit it here, this model can be applied to anything! Massage or Movie Money makes sense. Marketing to those whom love the ski slopes? How about earning discounts off lift tickets or free snacks in the warming hut? Baseball Bucks? Disney Dollars? This market is now being embraced and only just getting rolling. I have several other ideas to add but, I'll save for the future.
In addition, the use of funny and hilarious 5-30 second commercials has always been a great way to produce sales and a product or retail brand.
CPG's Will Be Valued By Consumers, Merchants and Marketers Alike!
Tap, click or opt-in to add manufacturer coupons and have them delivered for instant redemption upon purchase, anywhere you buy them, with your Mobile Wallet, or only at select stores. I know this is already being done thru tying them to a payment card. Cellfire and Cardlytics and others are doing this now and will transfer well into the Mobile Wallet. Coupons.com and Shopsavvy are also on the leading edge of mobile commerce couponing and payments.
What they will all need to do is plug their platform into the major Mobile Wallets to enable display on the mobile screen of the savings attained at the time of sale. Seems like Passbook is making this possible. Consumers that don't know they have saved or earned cash-back or rewards at the time of sale, does not build upon loyalty and tie immediate gratification to their purchases.
Merchants and consumers will love this for the convenience of saving time and money. The more satisfied consumers are with CPG funded dollars or discounts, the less money merchants will have to spend to obtain sales. However, I question if CPG's will not pass along the costs to retailers in the wholesale cost of products.
Why and How a Universal Mobile Wallet Will Reign Supreme
The Mobile Wallet is the marriage of marketing and payments. Consumers will not want to use a HTML5 mobile site or mobile app for every retailer they visit. Why? It is less convenient than using just one or two Universal Mobile Wallet apps and the experience will be different for every store. We are repeating the history of the late 90's customer engagement via loyalty and gift cards. Only this time customers engaging in dozens of loyalty programs without a heavy burden of management will now be possible.
People want savings and simplicity. The good news for merchants is that consumers will trade convenience for lessor savings. Daily Deals disrupted conventional email and direct mail campaigns, but either way Tier 1 and 2 retailers have not really engaged deals except to convert current seasonal inventory to cash or to experiment, as the ciosts were too high.
So let's cut to the chase. In the end it's all about driving customers through the doors of retailers and producing more sales at lessor cost. With MCX banding together they will maximize their store's physical and digital reach with potentially the same impact and reach as banks or even Social Media. But even then, Social Media will holds influence and attention that retailers may never hold. So social networks and merchants must work together to achieve the best results. Apple has maintained it's 'Walled Garden' for some time now and should be able to launch succussfully in doing so via 3rd parties connecting to Passbook. However, this strategy could prove to repeat Apple's prior track record as when iphone partnered exclusively with AT&T for the first two years or so. This led to Android launching on several platforms and gaining up to twice the market share of Google. A strategy that incorporates pride and prejudice is a risky one in the future of mobile commerce. Such must be restrained to attain victory. The one whom connects to the most and adds the most convenience and value wins!
Search + Social + Savings + Sharing + Reviews + Products + Big Data + Proximity + Security + Fun+ Video + Pics + CPG Offers + ? (TBD)
+ ? (TBD) + ? (TBD) + ? (TBD) + Mobile Wallet = SuperCommerce