Digital wallets & iBeacons for Retailers (Apple Passbook, Google Wallet, …)

digital-couponsDigital wallets such as Apple Passbook (for iPhones) and Google Wallet (for Android devices) are used to arrange and manage the digital versions of things you usually physically take with you when you go shopping, such as loyalty cards, discount coupons, gift cards, … …basically any card you keep in your leather wallet, typically with some kind of barcode on; Apple calls them “Passes”, while Google prefers the word “Object” – I like Apple’s lingo better, so for me – and in the rest of this Post – it’s “Passes”.

What about payments (credit-cards, etc.)? Currently Passbook doesn’t manage payments, while Google Wallet has the ambition to be also a full-fledged payment solution.

Anyway, I’m not interested in payments right now: my goal is to improve customers’ in-store shopping-experience and at the same time gather better, real-time information about shopper-behavior.

…and Microsoft? Rumor has it that Windows Phone 8.1 will support Apple Passbook formatted digital wallet content and import it into Microsoft Wallet.

In a few words, how do Passes work?

Consumers essentially…

1) …receive Passes (e.g. discount-coupons) through email, SMS, a website, a printed QR-code, their preferred social network, […insert here any reasonable, past/present/future online and offline channel…]

2) …”one-click” install Passes on their smartphones

3) …while shopping in-store, redeem Passes at the till, letting the cashier scan the barcode that pops-up on their smartphones display

Apparently it is like using traditional coupons, isn’t it?

No, it’s not because Passes have some very innovative and valuable features.

First of all, Passes are location-aware and time-aware, so they pop-up on the display of the customer’s smartphone at the right time (for example before an offer is going to expire) and in the right place (just before entering the store or – even better – in-store, in front of the right product).

Location awareness is provided by “conventional” geo-location (GPS plus triangulation of 3G/4G towers, WiFi, etc.) or by iBeacons (to know more about this awesome indoor micro-location technology, feel free to download my white-paper titled “iBeacon Bible” from http://www.gaia-matrix.com iBeacons are going to change your life, I’m not kidding!).

To be precise, Google Wallet doesn’t use iBeacons yet, but rumors say Google is working on it – if anybody from Google is reading this, could please confirm or deny? (…many thanks!)

Second feature, Passes can be updated “on-the-air“.

Once a Pass is installed on a consumer’s smartphone, the retailer that supplied it can easily, dynamically and selectively (for different segments of users) change its content sending pertinent updates, for example a new discount, the balance of a gift-card or the point-balance of a loyalty-card.

“Segments of users”? Yes, you can group consumers taking into account info that you know about them, such as personal data, purchase history, product preferences, average order value, etc. Therefore Passes can be highly tailored with content specific to a single user – or they can be generic for any user.

Retailers can even leverage “perpetual” coupons for ongoing promotions that run all over the year; once the Pass is installed it’s possible to update any or all of the content and send notifications that a “fresh” offer, for example, is available.

Third feature, analytics; a Retailer can monitor and analyze how each individual Pass is used by its recipient – for example, who has installed a Pass? When was it redeemed? Where? And so on…

A note about digital redemption: unlike a traditional paper coupon, shoppers don’t hand over a pass when it is scanned at the till, so retailers need to put in place appropriate procedures to manage things like duplicate scans, etc.

Some considerations about Passes

From the shopper’s point of view, Passes are very easy to download/install (it’s “one-click”) and the user experience is delightful and very, very simple.

For retailers, Passes are very easy to distribute and extremely cost-effective: this is a channel that undeniably has a low cost and big payback; Passes provide retailers with a direct, lasting connection to customers, sidestepping third parties and bypassing old-fashioned, traditional coupon distribution and local advertising.

Moreover, the interactive, real-time nature of Passes facilitates unconventional marketing campaigns where incentives can change considering location, time of the day, number of redemptions and even inventory.

In conclusion, today digital wallets are still in their infancy, but in 12/24 months, they’ll definitely become a key tool for retail customer acquisition and promotion – especially if employed in concert with iBeacons for indoors micro-location and interaction.

Andy Cavallini (andy.cavallini@gaia-matrix.com)

PS: a second, more detailed Post about digital wallets and their integration with an iBeacon infrastructure will follow in a short time – stay tuned (or even better, don’t hesitate to subscribe to my blog-site at http://www.gaia-matrix.com)

Gaia-Matrix

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