PYMNTS Summer School Recap: Day Two
Welcome to our PYMNTS Summer School 2013 Recaps – a series designed to bring our readers everything they need to know from the faculty, fellows and forward-thinking innovators we’ve assembled at PYMNTS Summer School. Each day, a different PYMNTS.com editor will give you a rundown of the best quotes and most interesting ideas from mobile payments ecosystem experts, as well as reaction from attendees and more.
PYMNTS Summer School officially began, Monday, August 12, on Harvard University’s campus in Cambridge, MA, and while summer is nearly coming to an end, Summer School was still in full swing on Tuesday.
Module 2: Tools And Tactics For Consumer And Merchant Engagement
Karen Webster, CEO, Market Platform Dynamics (MPD), facilitated the first module that discussed strategies for consumer and merchant engagement. Speakers included John Caron, VP Marketing at Catalina Marketing, Stephanie Swain, SVP, Retail and Payments at Aimia, and Lee Rainie, Director of the Pew Research Center’s Internet and American Life Project. The essence of this module was to capture the importance of the “omnichannel,” which is the convergence of the mobile channel, online channel and in-store shopping. According to the presenters, channels are converging, and there is a dire need for retailers to offer a seamless channel for consumers.
Caron explained that mobile channel is permeating the commerce space, and has led to the advent of mobile couponing. This unique service allows shoppers to merge traditional in-store shopping with the mobile experience.
“Roughly half of consumers have used mobile coupons, and there is a reason: we are constantly looking for value. It is important to us because we want to save money—it’s part of our culture,” said Caron.
The speakers reiterated that growing mobile usage is creating opportunity for merchants looking to build customer loyalty and improve the percentage of retained shoppers. However, mobile commerce has yet to become mainstream because merchants are still on the fence about investing.
Swain explained, “It is scary for merchants to invest in mobile commerce. It isn’t promised that these $21 million devices will be something they will be able to use in the future.”
Merchants will need to take a leap of faith since the speakers and many audience members agree that the mobile experience is quickly becoming more than just a luxury—but an expectation.
LevelUp Case Study
Following yesterday’s live case study on the Google Wallet, Tuesday’s session centered on the business model of LevelUp with “Chief Ninja” Seth Priebatsch in attendance as well. Jeff Bussgang, Harvard Business Senior Lecturer and Partner at Flybridge Capital, curated the discussion, and asked audience members to evaluate the LevelUp business model.
Bussgang probed the audience and said, “There was a big pivot: evaluate the pivot they made from the original founding vision to the new model.”
Several members of the audience waved their hands waiting to be called on so they could share thoughts on the business model. There were a variety of opinions, which included both pros and cons about why the old business model failed to ignite. Again, we can’t spoil too much of what went on during the discussion. But we can reveal a teaser about what Priebatsch said when he bravely took the stage to take questions and give feedback about the case study conversation.
Priebatsch—standing strong behind his business endeavors—stated: “we’ve always said the same thing to our investors: we will either be a multi, multi-billion dollar company, or we will be bankrupt. But we don’t want to be profitable, we want to be big.”
Module 3: The Technology Of Mobile Commerce
After taking time to step away and refuel with a lunch break, summer school was quickly called back in session. Module 3 addressed the more technilogical side of mobile commerce, and this time David Evans, Founder of MPD, facilitated the lecture.
Speakers included Matt Calman, Founder of Mobey Forum North America, George Wallner, Chairman, Co-Founder and CTO at Loop and finally CEO of Braintree, Aunkur Arya.
The lecturers got into the technical aspects of what the components of a smartphone are, and how these features can be employed in the commerce channel.
Calman discussed what he thought was the principle formula, and explained that offering a new mobile payment solution requires a novel token exchange, a novel clearing and settling network—or both—while bundling intent.
The variety of mobile payment technologies can seem overwhelming, but in the end, it’s simply about secure, quick, simple token exchange.
Module 4: Igniting Mobile Commerce
Day 2 of PYMNTS Summer School 2013 ended with a bang, as Senior VP at Walmart U.S., Daniel Eckert, GM—eCommerce and Strategic Partnerships, Western Union Digital, Marwan Forzley, and Head of Product Strategy and Business Operations, Retail Services at PayPal, Patrick Gauthier, came together to lead the discussion on what it will take for mobile commerce to ignite.
David Evans opened the last module of the day, and stated, “Once it gets ignited, it grows.”
But how can merchants help to push mobile commerce to ignition?
Gauthier believes that a 30 percent adoption rate is needed for critical mass. Momentum for ignition can be built if a 30 percent adoption rate is achieved.
The audience perked up when Eckert took the stage, as fellows were eager to hear what the Senior VP at Walmart had to say on the topic.
Eckert commenced his speech in a very Steve Jobs-like fashion, opening with several impressive stats about the company’s everyday business. He shared that every week Walmart serves 245 million shoppers across the United States.
“We are essentially serving all of America. Because of the enormous scale, Walmart gets every single proposal under the sun. People think: if I can just put my technology in Walmart, then bam—we’ve got ignition.” Yet, Eckert warns, “That’s just not the case.”
Eckert emphasized that the key to ignition is a three-legged stool value that involves the provider, the customer and the merchant. Mass adoption will occur when all three legs of the stool come together.
“Access to scale and distribution is only part of a successful ignition strategy in payments,” Eckert said.
Top Three Tweets
Mention @PYMNTS or use the hashtag #IPSS2013 to interact with the PYMNTS team and other Summer School guests!
Feedback From Fellows
“It was interesting to hear from the big gorillas, if you will, such as PayPal, MCX, and Walmart. It was great to see what they are thinking and how they responded to interesting questions on the panel.” – Johan Envall, Manager of Strategic Partnerships at Seamless Payments AB
“My favorite part of the day was hearing Seth from LevelUp. I think his energy and enthusiasm was amazing. I think the case study that we went through was a really good way for us to get an overview, and to critically break down a company and a strategy, which I think was incredibly valuable.” - Jyotsana (Jo) Jagadish from Citi.
To read the Day One recap, click here. Check back tomorrow Day Three!