Published on: May 31, 2011by Kevin Coupe
Google has introduced a new mobile application called Google Wallet, which is designed to let people pay for purchases at bricks-and-mortar stores using their smart phones. At the same time, the company also is introducing Google Offers, which provides, according to USA Today, “mobile discounts you can redeem by tapping your phone at participating merchants, or by showing the bar code as you check out ... Consumers will be able to store credit cards, loyalty cards, gift cards and mobile offers on their phones.”
Other notes from the story:
• “Google is partnering with Citi, MasterCard, First Data and Sprint and merchants including Subway, Macy's, Walgreens and American Eagle Outfitters. Google says it is building an open solution to other financial companies and retailers.”
• “For mobile payments to take off, consumer behavior will have to change. But Google points out that while a decade ago 70% of consumers were reluctant to pay for stuff online, today 70% access their credit card information over the Internet.”
• “Google will begin initial field testing of Google Wallet in New York and San Francisco this summer. To start, Google Wallet will be compatible with Nexus S 4G, available on Sprint. The Wallet app will connect only to MasterCard PayPass terminals at first, of which there are more than 135,000 in stores and restaurants.”
One discordant note: CNN reports that “PayPal is suing Google for allegedly stealing its employees and trade secrets that may have led to the launch of Google's mobile payment service. The 28-page lawsuit, filed in a superior court in San Jose, Calif., late Thursday, accuses Google and two former PayPal employees who now work at Google of implementing PayPal's confidential trade secrets related to mobile payment technology.”
The part of this that should open retailers’ eyes is the notion of using a smart phone to both pay for one’s purchases as well as immediately integrate various kinds of discounts - whether they come from coupons, gift cards, loyalty promotions or whatever. This will further empower the shopper to be in control of the purchase, and require the retailer to develop programs that are shopper-centric.
It will present challenges. If coupons are automatically stored on smart phones, and automatically applied to purchases, it likely will mean that two percent redemption rates will no longer exist. More coupons will be redeemed, which means that marketers will have to be a lot more careful about the coupons they put out there and a lot more targeted about the people to whom they send them.
From my POV, that’s all a good thing. There’s a lot less waste, and a lot more efficiency and effectiveness. Eyes-open marketing, let’s call it.
- KC's View: