Something's Brewing Out There

“Do you ever get the feeling that there’s something going on that we don’t know about?”Fenwick (Kevin Bacon) in the 1982 movie, “Diner”That one line from the movie “Diner” pretty much sums up my feelings – as a shopper – about Apple Pay, Apple’s “mobile wallet” initiative that was announced in early September. Unless you’ve been hiding under a rock, you’re no doubt aware that some time this month, Apple Pay will enable iPhone 6 owners to purchase merchandise in stores by holding up this fingerprint sensor/NFC chip-enabled phone against a checkout reader at the POS.Unlike the Google Wallet, PayPal, Square, Isis (renamed “Softcard” to avoid confusion with a certain hardline terrorist group), Loop and Level Up announcements, Apple Pay was greeted with a lot of media hoopla. In fewer than six hours, Chase Bank sent me several emails touting its involvement in Apple Pay with assurances that my credit and debit card accounts would soon be accessible through the iPhone. A similar message came from Walgreens, which, along with McDonald’s, Whole Foods, Toys “R” Us, Petco and Macy’s, is on board as part of the estimated 220,000 store locations where the payment option will be honored.Some of the coverage was hyperbolic. One TV report asserted that Apple Pay will break down the barriers of international currency exchange and change commerce forever. Apple does that to reporters. They even clapped when Apple CEO Tim Cook merely took the stage in Cupertino. But the fact that Cook never uttered the word “Walmart” once pretty much telegraphed what the world’s largest retailer thinks of Apple Pay.Walmart intends to develop its own mobile payment system, presumably as part of the CurrentC initiative from Merchant Customer Exchange (MCX), which also includes Target, Shell, 7-Eleven and others. So it’ll be Apple vs. Walmart. Oh goody, another corporate format war. Remember Blu-ray vs. HD-DVD? Betamax vs. VHS? All those incompatible CompactFlash, Memory Stick, MMC and SD cards still rattling around in your desk somewhere? All of these format wars muddied the marketplace by befuddling the shopper.And what about the shopper? Odds are you’ll have a hard time finding many who are all that excited about having a mobile wallet, and why should they be? Any time-savings gained won’t be significant. The security aspect seems counter-intuitive: This morning, everyone’s credit cards and bathroom selfies got hacked; by lunch, it was all “feel free to wave your phones around – it’s as solid as Sears.”Nevertheless, “somethings going on,” to use Fenwick’s phrase, when the biggest corporate players on earth are suddenly scrambling to topple the credit-card status quo. But to get to whatever enormous prize they believe lies over the horizon, they’ll first have to incentivize unmotivated shoppers to make the transition from plastic to NFC chip.And therein lies a game-changing opportunity for shopper marketing.Shopper marketing executives are struggling with the wide-ranging nature of digital innovation and the sheer numbers of app developers knocking on their doors. Some are players and some are pretenders, but few shopper marketing executives have any metrics to separate one from the other. Meanwhile, as the mobile shopping article on page 80 of this issue reports, shopper usage of mobile phones inside stores is stubbornly low with fewer than 10% of shoppers rating tools like shopping lists, notifications from brands and location-based services as useful.Assuming, therefore, that a prolonged “format war” doesn’t muddle it all up, persuading shoppers to embrace the mobile wallet will involve a lot of incentives, offers, coupon tie-ins and other digital promotional ideas. If the players – Visa, Walmart, Apple, MCX, etc. – really are playing for serious money, they’ll want these incentives delivered by apps and tools that truly can motivate shoppers. That, in turn, should hasten a consolidation among app makers, the cream should rise to the top, and that will benefit everyone.Speaking of cream, my guess is that the first operator they’ll be studying is Starbucks, its loyalty program and its phone apps that let customers order, save favorites, scan, pay, and earn rewards. Next, they’ll be calling on some of you. Be ready.Bill Schober is editorial director of the Path to Purchase Institute. He can be reached via e-mail: bschober@p2pi.org or phone: 773-992-4430.

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