Why Bricks-and-Mortar Stores Need to Embrace the Mobile

Bricks-and-mortar businesses have been losing ground on their online counterparts for years now as they are undercut by cheaper prices and more convenience for consumers. However, one advantage they can offer customers is the unique experience of having a physical location to display products and an opportunity to interact with staff.

The growing competition from online retailers means that the in-store experience and general customer service has never been more important for brick-and-mortar stores. Offering the consumer a seamless, interactive mobile experience is a vital way to do that.

In this digital age, where the smartphone is playing an increasingly significant role in influencing consumers’ spending habit, it’s essential that brands meet the high standards that their customers now expect of them. Digital wallets and close-proximity marketing are undoubtedly going to be part of the future of the customer-retailer in-store experience.

Making use of a dynamic mobile wallet pass has the potential to offer consumers a omni-channel retail experience that they desire. The many features of a digital wallet, including coupons and loyalty cards, allow the customer to incorporate their smartphone in to their shopping habits, whilst providing them value and creating brand loyalty.

The emergence of ibeacon technology which can be used in conjunction with mobile wallets, further underlines the potential to offer better, more relevant in-store experiences for customers and increases store traffic by enticing customers in to the store.

As a result of better access to a wider range of products and easy price comparison, the shift of power has switched to the consumer, as old-fashioned brand loyalty is disappearing, but for bricks-and-mortar stores embracing the changing nature of shopping habits is a must, with smartphone usage at the forefront.

 

First we had brick-and-mortar stores, then transactions moved online, and now Joe Pergola, vice president of sales and marketing at POS software and hardware provider AccuPOS, says location is even less important with the latest mobile payment options. “The museum gift shop eventually will have an event outside in the courtyard, and they want to bring some merchandise outside and sell it,” he offers as an example.

You can read more about Online Payments: Money Goes Mobile here.

The Growth and Rise of Mobile Wallets – Apple’s Passbook and Google Wallet

The current mobile wallet evolution is being fronted by Apple’s Passbook and Google Wallet with the ultimate goal of replacing physical wallets in favour of the smartphone. Both versions of mobile wallet offer roughly the same service, with a few variations.

Passbook and Google Wallet’s main features are storing passes, i.e. coupons, loyalty cards, boarding passes, cinema tickets, basically anything that used to be a piece of paper in your wallet, can now be kept safely in your smartphone. The principal concept is having one place on your phone to store everything you need.

Apple’s Passbook, launched in September 2012, is seen as the pioneer of using digital wallets to store loyalty cards and coupons, of which Starbuck’s was one its first brands. Although the app came out after Google’s, it’s path was clearly defined as a place to store passes rather than offer any form of payment.

Passbook is a native app, pre-installed in all iPhones, meaning that it only runs on Apple products and only those that run on iOS 6 system or later. One key feature of Passbook is that it enables iBeacon technology to offer geo-trigger push-notifications to iPhone users, which for example enables retailers to offer relevant, updated offers to customers whilst they are in their store. The iBeacon feature is something which Google are still in the process of developing.

The newest feature that Apple has added to iOS 7 system is a QR code scanner, used via the phone’s camera which allows the user to add mobile wallet content on-the-go. These passes can either be used as a digital pass or printed out to be used in-store.

Google Wallet’s journey to its current stage has been slightly different. Initially Google Wallet started as an online payment, Google’s answer to PayPal if you like, but the concept never took off and in September 2013 they moved to include the non-payment side, i.e. coupons, loyalty points, boarding passes etc. Google Wallet app that can run on any Android device with Android 2.3 or later and can even run on iPhones iOS 6.

In May 2013 Google rekindled their ambition to use Google Wallet as a payment alternative but this time by integrating it with Gmail enabling users to send money to anyone over the age of eighteen who has a Gmail account. Further in keeping with this idea Google have also introduced a quicker way to make online payments via the ‘Buy with Google’ button, allowing anyone with a Google Wallet account to make purchases on mobile apps and sites in only two clicks

As an extension of the app Google also now offer a physical debit card to go along with your Google Wallet app, which enables you to use its NFC (Near Filed Communication) technology to make one-tap payments.

Nevertheless, the whole Google Wallet service is still only available in the US, with no clear indication of when it will arrive in Europe. In contrast, Passbook has been available in Europe since its launch. Nevertheless, with the Android operating system being used on over 50% of current smartphone users’ phones, Google offer marketers access to a broader audience than Apple can. Therefore expect to see more retailers and brands incorporate Google’s mobile wallet technology in to their marketing plans in order to further create engagement and loyalty in their customer base, and ultimately increase sales.

There’s a clear distinction then that Google aim to incorporate their digital wallet as part of their wider plans of facilitating online payments for their users, whilst Apple’s Passbook is focused more on the non-payment side, solely being a place to store all the necessities of your wallet without making payments.

However with the launch of Apple Pay in October 2014, the in-store experience changed for retailers and consumers. Not only loyalty card are stored within mobile phones, the payment is made through NFC (Near Field Communication), a technology built-in iPhones. This means that the consumer only uses his smartphone to connect all services on the same mobile interaction. Adding the fact that Apple has already several major partnerships with major credit card services such as Visa, American Express, banks and retailers, this translates in a huge advantage for Apple.

iBeacon technology provides a glance in to the near future

Very soon we will see more machine-to-machine (M2M) communications between connected devices, allowing technology to create more efficiency and further improving our lives. iBeacons provide an insight in to the near future of that interconnected world of the Internet of Things (IoT).

Retail stores, airports and sporting events to name a few have already demonstrated why there is so much hype about the potential of ibeacons and the innovative ways it’s enhancing our mobile experiences, including more relevant, personalised marketing efforts and more effective ways of communicating with the public at events.

Apple’s release of their iBeacon functionality paved the way for a new way of looking a Bluetooth Low Energy (BLE) and unleashed the premise of using beacons in conjunction with smartphones, especially for digital wallets.

iBeacons are a great example of how IoT will function with cheap, low energy devices interacting with smartphones or tablets to bring ordinary objects or locations to life, intrinsically linking the digital and physical worlds together. Furthermore, the easy accessibility of obtaining information from a beacon makes them ideal for use alongside smartphones, with a simple but effective push-notification being the preferred current method of relaying info or sending coupons.

Large companies from Major League Baseball to Virgin Airlines have led the way in adopting beacons, but it’s in retail that many are predicting it to have the most influence, especially in customer spending with Juniper Research suggesting there will be over 1bn mobile coupon users by 2019, highlighting the importance of digital wallets such as Apple’s Passbook or Google Wallet in the mobile marketing sphere.

The current use cases of ibeacons is just the tip of the iceberg in its own future potential and that of the IoT which will create a world linked by internet-connected devices, which in turn will create more productivity for all.

The words of a CTO @ Web Summit 2014

Last week Passworks’ CEO Francisco Belo (@FBBelo) and myself (Passworks’ CTO@lmmendes) went to Dublin to attend the Web Summit 2014 for the first time.

Without knowing what to expect for sure besides the fact that we would find there lots of investors and startups presenting their products (1,000 experienced investors and at least 2,000 startups), we grabbed a two for one ticket, arranged a booth for the first day and went on exploring the summit.

The sheer dimension of the venue at the Royal Dublin Society (RDS) was astonishing. It was divided in 4 primary summits: Machine, Enterprise, Marketing and Builders and we were exhibiting at the Enterprise summit.

When we arrived at the first day and saw the size of our booth we were a little bit disappointed to see all startups were crammed one on top each other. The internet connection was also incredibly flaky, which posed quite an obstacle every time we tried to demonstrate our product. Our luck was that our CEO — as always — had a backup plan: he pulled a 3G modem to show the Passworks platform so we wouldn’t need to resort showing our development platform on a local machine.

The balance of our first day was that the event was too generic and many of the people that approached us were more interested in knowing how ibeacons worked (how can they be configured and how they integrate with Passbook). In spite of these people were not our main audience/target, in terms of contacts it was a very interesting and important day for a startup like ours, to do some networking and to meet new people as potential clients or partners.

Please, bear in mind that setting up a stand in a fair like the one on WebSummit or a similar event requires a specific mindset: you must be willing to actively engage with the people passing by your stand and to remember to be polite and treat everyone at the event as equal, even if you think that their business doesn’t fit with yours or if it’s only a person curious about your technology, because in the startup world the word-of-mouth is a very important thing and you want the people to remember you and your company.

All-in-all, the first day was pretty intense as we spent the whole day standing at our booth from 8h45 AM to around 6 PM answering questions and making our product known. We didn’t get the opportunity to see what was out there at the rest of the Summit because we were committed to trying to get the maximum return on our stand.

On the second and third days of the event our approach changed: we went to discover the Web Summit and all the startups presenting on both days, picking the most promising business-wise one by one, trying figure it out if they‘d be a good fit as partners or clients.

This proved to be a valuable experience, since we listened to the pitch of almost all the startups we talked to which ultimately gave us some ideas and allowed us to fine tune our own pitch while giving us lots of leads.

Summing it all up I had a blast at the Summit. It gave me an unique opportunity to talk to other CTOs and developers about their growing pains, experiences and technology. I recommend going to one of these events for the experience; it’s very rewarding.

Why now is the right time to incorporate digital wallet passes in to your marketing plan

Get ahead of the game and take advantage of the huge marketing opportunity that digital wallets have to offer. That’s definitely the message if the recent roll out by major companies of digital wallet and iBeacon technology is anything to go by.

We’re rapidly expanding towards a future where smartphones will be even more inextricably linked to every aspect our everyday routines. Current consumers desire more channels to access brand’s content and require fast, convenient ways to do it.

The non-payment side of digital wallets such as Passbook and Google Wallet is still nascent in terms of brand adoption, but as smartphone users are becoming more in sync with its functionalities brands should look to move their tickets or coupon and loyalty campaigns to more dynamic digital smartphone versions. Companies such as Starbucks, Major League Baseball and American Airlines have been leading the change to digital wallets and reaping the benefits as a result.

Digital wallets form an important part of the current trend of new mobile technologies which are all focused on creating unique and innovative experiences for customers whilst paving the way for a more seamless transition between the physical and the digital worlds.

Real-time communication channels such as iBeacons are challenging brands to give more relevant information to their customers and provide opportunities to influence consumer spending whilst in-store.

iBeacons are set to play an important role in all brand-to-customer interactions in the near future, especially for retail stores in the fight to win back market share from online competitors with digital wallets at the forefront.

The benefits of Apple Passbook for brands

Passbook offers brands a significant opportunity to drive engagement with customers and increase store foot traffic through one convenient app.

Passbook is an app native to Apple devices, pre-installed on all operating systems that run iOS6 or later. The essential premise is one place to store coupons, event tickets, loyalty cards and the like, but more than just being a digital wallet, it also represents huge marketing potential for brands.

The fact that Passbook is a default app means a target audience already exist that are accustomed to using it. As an example, in the US Passbook is already the 4th most popular mobile commerce app and a fifth of all iPhone users already use it to download coupons. Furthermore, with over 300 million iPhones around the world and all future devices set to have Passbook installed, the wide range of users that brands can reach is vast.

The convenience of having all a wallet’s non-payment aspects in one app is beneficial to both brand and customer. For example, the easier access to both coupons and loyalty cards allows brands to offer their customers a seamless interchange between the two whilst increasing sales and providing better customer service.

Location-based notifications enhance the dynamic features of a Passbook pass allowing brands to send updated information to their customer’s phone via push notifications, which highlights the potential to refine marketing strategies with more personalised, relevant offers. Apple’s iBeacon technology has already paved the way for geolocation to play a key role in brand to customer interaction.

Incorporating Passbook passes into a brand’s existing mobile marketing strategy has been shown to boost sales and increase coupon conversion rates, with 64% higher conversions compared to regular mobile web coupons. It also provides a totally different platform to a brand’s app, as consumers don’t want to fill their phones with apps for every different shop or restaurant, and require a simpler, more expedient way of utilising their smartphone whilst in-store.

Crucially for smaller brands, Passbook doesn’t need an app to work alongside it, as passes can be added straight to it via email, SMS or distribution campaigns in social networks. This opens up the barriers to entry, enabling brands with smaller resources to have a cost-effective way to offer their customers mobile content and drive up sales.

Passworks platform enable brands to create a pass, manage and distribute a marketing campaign that may take the form of digital coupons, membership or loyalty cards, and events or travel tickets, via Apple Passbook.