Goodbye, wallet. Hello, cell phone.
That's how I began my Oct. 4 Digital Pivot post describing four reasons why it was inevitable that we all would soon be using our phones to make purchases in stores and restaurants.
But in case you didn't believe me then, the needle on the marketing Richter scale was pinned to "extreme" recently with three mobile announcements:
Casting the gauntlet to the Visas and MasterCards of the world, AT&T Mobile, Verizon Wireless, and T-Mobile announced they are creating a mobile payment network that will allow consumers to pay for items at stores using their cell phones. Michael Abbott, CEO of the newly formed ISIS joint venture, stated in FierceMobileContent, "the ultimate goal is the development of a mobile wallet solution that effectively renders obsolete cash, credit and debit cards, loyalty cards, coupons, tickets and transit passes." (Note: Among other players, VISA and Sprint have also discussed their mobile payment solutions.)
Not to be beat to The Next Great Thing, Google Chief Executive Eric Schmidt provided a sneak preview of an soon-to-be-released Android phone with a Near Field Communications (NFC) chip that allows consumers to pay for items.
At Monday's Web 2.0 Summit, Morgan Stanley analyst Mary Meeker's presentation, included a hyper-aggressive forecast: Contrasting Internet e-commerce's 15 years to achieve five percent of retail sales. she predicts mobile e-commerce will get to that same level in only five years or one-third the time.
Considering these announcements alongside other significant smart phone marketing data (the hyper-growth of Apple IOS, the future Facebook Phone, still significant share of RIM Blackberry, and others), we're clearly into our first round of chess boxing for the Mobile Payments Market.
Here are three reasons you might want to stop and consider getting educated on mobile payments marketing with the same ferocity that so many have used in flocking (overflocking?) to social media marketing:
1.) The first to the new greenfield site reaps the first mover advantage.
A smart phone with an NPC chip is clearly a technology greenfield ripe for market development. Historically, new technology platforms have been the great Wild West frontier for marketers, where early pioneers reap the first and most visible gains. Think how Dell Computer, Zappos, and even the little LA Kogi Taco truck leveraged Twitter in the early days. (This said -- make sure you arrive at the right greenfield site: The 200 MM subscriber klout of Isis notwithstanding, there is plenty risk on which Mobile Payment Network and/or smart phone strategic alliances will win.)
2.) Mobile marketing job opportunities likely are to flourish.
Google CEO Schmidt ventured that as many as 500 new mobile payment startups associated with the new cell phone-based payment platforms will emerge. Obviously, these new tech companies will be forming their marketing A-Teams.
3.) The new mobile payments technology will stir a tsunami of marketing innovation.
It seems technology innovation begets marketing innovation. As historical examples, consider the freemium business model and the affiliate partner program, though each existed in some form well before Web 1.0 (for reasons beyond the scope of this post), as both exploded in growth with the rise of the Internet. It's fair to say that the likes of Amazon, still an Internet behemoth, would not be without such affiliate marketing innovation.
As a more recent marketing example, look at how Starbucks combined social network technology with crowdsourcing technology. With MyStarbucksidea.com, they have dramatically altered and enhanced the flow of ideas between customer and company.
We expect the same with Mobile Payment networks.
Take a look at the diagram of the Isis marketing. When all the major points of a marketing cycle, from initial advertising, retail location identification, discount coupons, loyalty points to final payment transaction are for the first time co-located on one device owned by one consumer, the rules are surely to change. All the marketing data will have to pass quickly across all stages in order to "fundamentally transform how people shop, pay, and save."
Social media and networks will be very much germane to the new marketing infrastructure formed within the emerging mobile payments world: After all, 200 million of Facebook's 500 million active users access the service through their mobile device. Similarly, some 62 percent of Twitter users are tweeting from their cell phones.
As recently covered in MIT's Technology Review, social purchasing apps are on their way: Giving you some taste for how appealing that blend of flavors will be, Blaze Mobile Wallet for the iPhone not only allows you to pre-pay for a movie ticket from your phone, but informs your friends via Facebook of the the film, theater location and show time. We ain't just singing Kumbaya here: The value of one transaction may well be marginalized by the dollar value of the social connectivity (aka the multiple transactions associated with your friends joining you at the movie).
Now, don't get me wrong. I realize a significant number of you are knee-deep involved with social media marketing.
I am not saying social media marketing is a bad place to be. After all, only a couple of tech cycles ago, it too was a massive greenfield opportunity, but that's also social media marketing's main problem: It's the current place to be.
Hockey great Wayne Gretzky put it well: "A good hockey player plays where the puck is. A great hockey player plays where the puck is going to be."