M-Commerce: Coming Of Age?
By Matt Pillar, Editor In Chief, Retail Solutions Online/Integrated Solutions For Retailers
In January, I wrote a column for Integrated Solutions For Retailers magazine that called out m-commerce as one of the five biggest retail technology flops of the past decade. I stand by my analysis, but a new decade has dawned indeed.
Last week, I had two separate conversations — one with a retailer, one with a couple of vendor execs in the payments space — that convinced me 2010 will be a watershed year for m-commerce.
M-Commerce Hits Small Town USA
The first promising m-commerce conversation was with Rachel Wallace, new subscriber to Retail Solutions Online and Integrated Solutions For Retailers and marketing director for Wallace Oil, a small family-run chain of gas station/c-stores in La Junta, Colorado. Now, as it relates to "cutting-edge" consumer-facing retail technology, I've often scoffed at claims of imminent ubiquity or proliferation. I live in a small town in Pennsylvania, and the retail technology I see in my travels to big cities in places like New York and California doesn't differ all that much from what I see at my local hardware store. Value is value and benefits are benefits, so if it provides consumers value by benefiting them in some way, your customers will adopt new retail technology no matter where they live. For this reason, I won't assign the words "ubiquitous" or "prolific" to a retail technology until I see it around my town or towns like mine.
Which brings me to the point. While not quite as small as my town, La Junta (population 7,568) is a small one nonetheless, and one whose residents are enjoying the benefits of m-commerce right now. It was introduced by the local bank and several retail members of the local Chamber of Commerce, all of whom partnered with a cell phone payment solutions provider called Bling Nation. Wallace Oil (and the other participating local retailers) found the significantly lower transaction fees associated with the service attractive, so it created incentive for customers to adopt it. The details will be outlined in the April issue of Integrated Solutions For Retailers, but here's a teaser: consumers who have adopted the solution have steadily increased their per-basket sales at the store from $6 to $25 to $40 in a matter of months. The issue will be here mid-month.
Declining Balance On Your Phone?
The other interesting call I had on the m-commerce front was in regards to the recently announced partnership between First Data and DimpleDough. You might know DimpleDough as the company that markets personalized gift cards, but the company offers far more than that. In fact, CEO Shawn Barrieau calls the solution a complete card management and marketing platform, complete with sales and storefront configuration features. "We can plug into any retail environment — online, offline, mom-and-pop, you name it," he says. He and Mike Hursta, VP for the prepaid division at First Data, believe the mobility of gift and spending cards is the future of the First Data/DimpleDough offering. Barrieau points to consumer demand. "The future of gift cards needs to be delivered wherever the consumer is, whenever he wants it," he says. Hursta adds that mobile spending cards are a spontaneous commerce enabler. "Carrying a declining spending card balance on your phone creates incremental gifiting opportunites," he says. "Coffee, snacks, small gifts to recognize the achievements and milestones of friends and coworkers; the ability to pay with your phone enables commerce," he says. "There's a huge opportunity for retailers to maximize spending [see the Wallace Oil example above], and consumers appreciate the convenience of having access to balance statements, purchase history, and balance management right on their phone." Even those personalized cards that DimpleDough markets are available for mobile gift cards. "They're mobile, they're customizable, and they're virtualized," says Hursta.
The barriers to m-commerce are coming down. Application development for smartphones is rampant, retailers and consumers alike are quickly understanding the benefits, and the adoption of smart phones is rapid. Even in my hick town.