Merchants enter mobile payment arena
With mobile payments on the brink of booming, everyone is angling to get in the game, from payment companies like PayPal and Square to mobile carrier ventures like Isis and Vodaphone to Internet giants like Google. This week, a group of U.S. retailers announced they were taking payment matters into their own hands and planning a joint merchant mobile payments network called Merchant Customer Exchange (MCX). And there are some big players involved.
Robin Sidel at The Wall Street Journal reports that 14 merchants have signed on so far, including Wal-Mart, Target, Best Buy, 7-Eleven, and Lowe’s. Wal-Mart corporate VP and assistant treasurer told Sidel, “We’re open to all partners, but it has to be beneficial to member merchants in a way that improves the system and doesn’t layer on additional costs.”
Saving money appears to be one major motivator behind the new network. Ryan Kim at GigaOm asserts that member merchants are setting themselves up to save money in multiple ways. He writes:
By banding together, they may be able to get better interchange fees from the credit card networks. And in a mobile wallet, they may be able to steer consumers to use their own issued cards or prepaid gift cards. And if an issued card is pulling funds directly from a bank account, they can avoid card fees. You might see retailers offer deals on the spot for consumers who fund a purchase using their bank account through their mobile wallet.
Kim also notes that by launching their own system, the retailers will retain control over their own data and keep it out of third-party hands, pointing out that “Google, for example, is trying to get at the purchase data through Google Wallet.”
No launch date has yet been set for MCX, and Sidel reports that the search for a CEO is underway.
The future of shopping is all in the tech
Recent Nielsen reports show that not only are smartphones holding a majority in the U.S. (50.4% of mobile subscribers as of March own a smartphone), but that smartphone owners are using their phones to shop. The latest Nielsen report shows that 47% of smartphone owners (or 45 million users) used shopping apps in June, with eBay Mobile and Amazon Mobile apps in the lead.
There’s no question that mobile technology is beginning to change the retail landscape, but we’re just at the tip of the iceberg. Jon Swartz took a look at the future of shopping over at USA Today and writes that technology advances will change everything from physical appearances of stores to shifting the retail workforce focus to be more customer centric. Shopkick CEO Cyriac Roeding told Swartz, “The next five years will bring more change to retail than the last 100 years,” and a Gartner analyst told him that retail we know today will be a thing of the past in 10 years:
“Big-box stores such as Office Depot, Old Navy and Best Buy will shrink to become test centers for online purchases. Retail stores will be there for a ‘touch and feel’ experience only, with no actual sales. Stores won’t stock any merchandise; it’ll be shipped to you. This will help them stay competitive with online-only retailers, Sterneckert says.”
Some of the interesting tech Swartz examines includes digital dressing rooms that allow customers to see how clothing will look and fit simply by standing in front of an Intel Magic Mirror that simulates body type and fabric fit, with no need to actually try on the clothes, and 3-D printers that will allow consumers to print-on-demand many household necessities such as towels and utensils.
Swartz also looks at the coming brick-and-mortar retail revolution and notes that mobile technology will play a key role:
“By the time you walk into a store in the near future, the employees there will probably know what you want to buy, based on information on your trusty phone or tablet. Merchants will know your gender, age, race and income … imagine waving your smartphone over products and seeing what’s inside. Holding the phone over a DVD’s bar code might activate a movie trailer on the phone’s screen … All of this will be made possible with so much personal data on smartphones, and the ability of merchants to parse it to gauge who is just browsing and who’s on a mission to buy.
Swartz examines smartphone technology, the death of cash, augmented reality and harnessing social media as the driving forces behind the future of retail. His post is well worth the read.
East vs West Coast mobile shopping trends
Big data company Sense Networks released its first Mobile Advertising Pulse report, showing East and West Coast mobile shopping behaviors tend to align with lifestyle stereotypes of the two coasts. The company press release on the report identifies the East Coast as “a hub for education and the more practical consumer,” and the West Coast as “being known for residents that are focused on health and fitness.”
Looking at click-through rates (CTR) for mobile advertising deals, Sense Networks identified the top two ad deals for East Coast consumers as “optical and eye doctor deals,” whereas West Coast consumers leaned toward mani-pedi offers and Pilates classes. A few of the fun East Coast versus West Coast data points include:
- “Consumers throughout the East also had a 60% higher CTR on education deals, including art and photography courses.”
- “Overall West Coast consumers had a 24% higher CTR on health and fitness deals than east coast mobile users.”
- “East Coast consumers had a 26% higher CTR on nightlife and an 18% higher CTR on restaurants.”
- “West Coast consumers had a 136% higher CTR on travel and 33% higher CTR on food and drink (for example, wine tasting).”
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