Session 5: Meeting Mobile and Social Commerce at the POS

Highlights

– Why merchants have a say in what gets adopted and when

– How mag stripes and mobile co-exist (and if they will)

– Why extending existing point of sale systems and process is a key to success

– How retailers are using mobile to change the customer experience in store

From mobile couponing to checkout, industry experts addressed the impact of the mPayments revolution on the point of sale in the Day 2’s second session. Jim VonDerheide, Global Loyalty and Business Intelligence at Visa (pictured, center), outlined the company’s approach toward mobile innovation at the point of sale by using Visa’s text-message reward pilot program with Gap as a case study. 

“What value should we be adding to allow our merchants to provide value to consumers?” he said. “We’re looking at how technology is putting us in a space we’ve never been before but can put us in a better space for our merchants and issuers. We’re thinking about the interconnectedness in terms of a wallet.”

In the case of Visa’s partnership with Gap, the goal of the program, he said, was to engage consumers right at stores and in the shopping process. The Real-Time Messaging promotions from Visa and Gap can also then be shared with friends via mobile.

“We think of Visa as a network. We’re trying to convert that into more of a community… of people who use that network,” said VonDerheide with regards to the company’s social media strategy.

VeriFone Marketing SVP Paul Rasori emphasized his view that payments functionality itself would not ignite mPayments but rather couponing and loyalty rewards would drive engagement around “this piece of the Internet I’m carrying around with me.”

“The killer app for mobile hasn’t been thought of yet,” he said, acknowledging that forecasts 2011 would be the year for NFC adoption appear to have been premature.

The leather wallet is dead, Rasori also asserted, offering his prediction that the future of the point of sale would involve multiple mobile wallets (from the Google Wallet to a Best Buy app, for example).

“Each one of those wallets will have a unique functionality on it, and this will be a big challenge,” said Rasori about the potential obstacles facing issuers.

He discussed the scenario of mobile coupons from different sources needing to be redeemed at the point of sale, as well as assigning loyalty points that “may not follow the same path as a transaction.”

He also stressed the urgency for the industry to focus on mPayment security from the get-go, finding a way to protect consumer data itself rather than set up protective walls around the information in the style of traditional PCI compliance.

“If there’s any chinks in the armor from a security perspective, it could sink the whole thing,” said Rasori. “Let’s think of security not just in the security of handset, but all of this information is making its way to the retailer, and they’re the one that ultimately has to protect all this information.”

He went on to list six rules for mCommece success:

• Deployment and management of complex NFC technologies will require significant ongoing services from the retailer’s payment systems provider.

 

• Mobile commerce must add value to the consumer.

 

• Mobile commerce must be streamlined with existing POS services and managed well for the retailer.

 

• Mobile commerce must become ubiquitous to be successful.

 

• Mobile commerce must be integrated with other forms of payment.

 

• Mobile commerce must be ironclad secure.

 

Jon Squire, SVP at SK C&C’s CorFire, emphasized that the personalized relationships a merchant can foster with a consumer – in the form of targeted offers, location-based couponing or even sending out vouchers during off-peak hours – is “for mobile the sweet spot.”

He quoted a 2010 Booz & Co. survey that found 27 percent of consumers said they would be willing to purchase physical goods through social networking sites. By 2015, social commerce sales will total $30 billion, with $14 billion coming from the United States.

Meanwhile, Harvard Business School Associate Professor Ben Edelman addressed legal and regulatory concerns around Groupon, including voucher expiration date and cashback.

“[It’s a] substantial risk to voucher services and to merchants if terms must be altered retroactively,” he said.

Finally, AisleBuyer Marketing VP Scott Todaro demonstrated how the company’s mobile self-checkout application aims to optimize the consumer shopping experience by providing additional product information and even allowing consumers to skip waiting in line to make a purchase.