With sales of smartphones and other mobile devices occurring in record numbers, “mcommerce,” or mobile commerce, is exploding. Today’s mobile wallet technology is set to meld the smartphone with the payment processor, creating a synergy that may well result in marketer’s nirvana.
According to eMarketer, there will be over 140 million smartphone and tablet users in the United States by 2018. For the first time, marketers will be able to reach these Internet users as they’re out and about, enticing them with attractive local offers in real time. Driving this revolution is the emergence of two technologies: physical payment methods and the geofence.
Physical Payment Methods
The Galaxy S5 from Samsung is a game changer. The phone features a sophisticated fingerprint reader. PayPal and several other companies are rushing to integrate the technology into their own services, which would allow users to purchase items at local retailers by essentially signing with their fingertips.
According to PayPal, the transaction would be absolutely secure, and they will not store fingerprint data on their servers. The technology promises to enable consumers to purchase items with their smartphones without having to fumble with smartphone keyboards.
This technology is the result of the FIDO Alliance, a consortium of payment processing and mobile device companies with the common goal of enabling consumers to pay for items on the go without having to manage multiple passwords. The FIDO Alliance also plans to support retina, voice, and face scans!
The Geofence
Many marketers think of the smartphone as a device that keeps consumers connected to the companies they like at all times. The geofence is a natural outgrowth of this concept. Smartphones know where consumers are at all times. They also know where retailers are located. Geofencing is what occurs when those two pieces of data are combined.
Think of it this way: when a mobile ad platform of the very near future detects that a consumer is physically near a store, it can generate a custom discount code or coupon for them on the fly. The retailer ensures that the consumer doesn’t go to a competitor, and the consumer gets a few percent off.
This technology will allow retailers to drop costly loyalty cards and other such programs because the geofence will be baked directly into the phone’s sim card. Businesses will be able to catch the attention of consumers when they’re the most receptive.
Consumers will have all of their discounts and loyalty cards stored in their phones, and they’ll be alerted when their favorite local shops are offering new sales. Naturally, which offers consumers choose to avail themselves to and under what circumstances will be fair game, opening up the possibility of entire firms that crunch, package and sell this data.
According to Nielsen, however, over 80% of purchases are planned. While the impulse buy will always be worth striving for, retailers should not expect consumers to make large purchases as a response to entering a geofence.
To get maximum results, retailers will still need to intercept their potential consumers at the moment of need, when large purchases are being planned.
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