The Mobile Money Network™ Blog

Phil Vickery Checks Out on Mobile

MMN’s MD John Milliken featured heavily in last week’s Retail Week article ‘Smartphones Ring the Changes in Retail’. Discussing in-store mobile payments, John says, “The technology is available and relatively easy to implement; the innovation exists in being able to link systems together.” Our collaboration with Thomas Pink is an example of MMN’s innovation in this area: this week Thomas Pink unveiled the range of official merchandise for the British and Irish Lions’ Tour at The Golden Lion in Mayfair – renamed The Pink Lion for the duration of the week-long campaign. Lions’ coach Warren Gatland pulled pints while customers purchased Thomas Pink Lions’ apparel from pictures on the walls using MMN’s Thomas Pink mobile checkout app (demonstrated by Phil Vickery above). Martin Bayfield, Lewis Moody and Andy Irvine joined in the fun with rugby lessons on the turf outside.

Retail Week e-Commerce Summit

MMN Marketing Director Nick White gave the keynote speech at the Retail Week e-Commerce Summit on Wednesday, in which he explained both how mobile payments provide consumers with a simpler, faster way to pay, and how to improve distribution, reach and revenue by enabling mobile payments across all channels. The Summit saw a strong turnout from forward-thinking retailers and featured inspiring talks from Ishan Patel of Aurora Fashions and Sarah Baillie of Debenhams. On Tuesday, Nick’s panel ‘How Will e-Commerce Change the Future of Retail?’ provoked passionate discussion amongst panelists from Waitrose and Morrisons. A key theme from the event was the importance of data to both customers and retailers.

What is Mobile Commerce?

Nick White used this slide (above) to illustrate the mobile purchase process in four key quadrants: marketing, search, merchandising and checkout. The concept is expanded in our slide below, detailing the purchase in three domains – home (where PC and tablet are dominant), out and about and in-store (where, for both, mobile is dominant). As a channel, what makes mobile unique is its application to every quadrant and therefore its ability to draw together the purchase experience. For example, mobile can be used for search at home with the Tesco app, which enables customers to compile their shopping list by scanning the barcodes of products they are throwing in the bin. Equally, mobile is used at an in-store checkout with Pay by Square, which links the mobile device with the till. m-Commerce is a broad term and, as it develops, we will have to analyse its various components in greater detail to better explain it. The key is to understand that the mobile device, uniquely, knows everything about its owner and can influence and personalise their experience in each quadrant, enabling a targeted, bespoke service that perpetuates the ‘demographic of one’ experience. Mobile will never completely take over from e-Commerce, but it will become equally as dominant.

4G is here, but is it any good?

Everything Everywhere has launched 4G in 11 cities across the UK, offering a massive opportunity for the network if it can get it right. In the UK, we pay a lot for data and generally the experience falls short: at the moment, the quality of the service is holding the industry back. Faster broadband is expensive and, if it proves to be unreliable or offer poor coverage, customers won’t be happy. The predictions seem lukewarm: Guy Laurence, CEO of Vodafone, says that its own 4G service to be launched next year has a longer wavelength and will focus on providing a good service indoors, casting doubt on the reach of EE’s offering.

Battle of the mobile wallets

Vodafone made the news again this week when Gemalto announced the launch of its mobile wallet in partnership with the operator, as Project Oscar (the UK network operators’ JV, which includes Vodafone) announced its rebranding as Weve. On Twitter, the community questioned what this meant for Oscar/Weve: Vodafone is a global company with presence in 30 territories, and it is not surprising that it is exploring solo projects alongside the JV. All the member operators of Weve have their own wallets and NFC initiatives. Tweeters are missing the point: in the near term, Weve is positioning itself as a marketing platform while Vodafone launches the wallet in Germany and Spain. The question is how Vodafone will add differentiation to NFC that benefits consumers and retailers. If it’s only concerned with in-store checkout, it’ll miss out on a lot of what m-Commerce offers. Ultimately, to benefit the consumer and retailers, it needs to add value across the purchasing journey.

 

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Retail Week’s George MacDonald on new ways of buying
We were delighted to chat to George MacDonald, Executive editor of Retail Week about SimplyTap’s current Empire magazine ad campaign with HMV. The innovative ad allows consumers to make instant off the page purchases using QR Codes. George says: ‘New and more convenient ways of buying are increasingly important to retailers. They’re becoming interested in mobile and campaigns such as this because it gives them the means to grab more of spend.’

Square step up mobile retail innovation
We’re big fans of innovation at the MMN and are fascinated by what Jack Dorsey is doing at Square. He’s trying to break through the complex value chain which is involved in payments. He wants to have complete control over the process by owning both ends – the customer’s handset and the in-store till. It’s almost like an Apple model for the High Street. On the downside, trying to take on the world is inevitably slow and you’ve got to displace other businesses in the value chain like NCR. Till packages are quite complex and it’s telling that Square are only really making headway in coffee shops and restaurants. Supermarkets and department stores add extra complexity to the electronic point of sale with discount prices, vouchers and stock availability. Can Dorsey make his business truly attractive to medium and larger retailers? He’s obviously had great success with Square so far and the market has followed with companies like iZettle springing up. Can Dorsey run fast enough without everyone else catching up?

Why Apple aren’t dominating mobile payments… yet
Someone who won’t be in the race against Square just yet is Apple. There’s been speculation in the media about why they’ve been reticent about their mobile payment plans in the face of ambitious projects from Google and Microsoft. Apple is an enormous company which is principally a hardware business. None of its current revenue streams are impacted by it not moving forward into mobile payments right now and it’s become so large that it doesn’t have to innovate in non-core areas anymore. Apple has the luxury of being able to sit there knowing that it has hundreds of millions of customers using its technology and hang fire until the right moment. Why should it chuck a fortune away on mobile payments at this stage when it can buy the most successful business when things are more established? It’s a different story for banks and payment companies who need to innovate because their current revenue streams could be impacted by developments in the industry.

Networks to join forces on an open mobile payments platform
Talking of which, Project Oscar, a multi-carrier common UK mobile payment platform was meant to launch in time for the Olympics. However the FT reported this week that it could get the regulatory nod this summer. The operators have chosen not to comment on the project but on paper, it’s a really exciting development. We know historically with things like mobile data, that the temptation will be to try and own the entire environment. However if an open platform is put in place there could be proper innovation, proper consumer value and proper value for everyone in the eco-system. It could provide us with a step change in the growth of mobile payments and mobile money in the UK.

An m-commerce solution for small retailers
A study this week by Onepoll found that small retailers are moving slowly in their uptake of m-commerce. This isn’t a surprise – these guys are finding it tough: they’re worried about getting customers through the door and earning revenue. They know mobile is going to be big but they want to find out about it in a low risk way without having to invest in it heavily. We’re absolutely primed to introduce small businesses to the mobile retail environment. Through our common platform SimplyTap they can join other retailers and access new customers and channels in which to sell their products.

Visa look at how mobile payments will help all retailers
This week our MD John Milliken presented MMN to retailers at Visa’s When Worlds Collide event in London. More will be revealed about Visa’s plans for the future in next week’s post but it wasn’t a surprise that they emphasised mobile payment as a priority. Retailers of all sizes can accelerate their shift to mobile with Visa’s support of NFC and MMN’s instant mobile checkout, market places and network.

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Banks and mobile operators are working together
This week we were interested to hear that Deutsche Telekom had teamed up with MasterCard to create a mobile payments application. The move comes in the wake of Vodafone’s partnership with Visa. Further proof that the evolution of the mobile wallet requires mobile operators to collaborate with banks so both parties can take advantage of developments in mobile commerce.

Retailers are all benefiting from mobile shopping
The launch of IBM’s augmented reality mobile shopping app shows that the tech giant is also keen to collaborate, this time with retailers. It makes a huge amount of sense for customers to be able to use their mobile phone like a personal shopper (and this one lives in your pocket and is better suited to cross-sell and up-sell). Retailers like John Lewis and Comet have already cottoned on and their apps work like in-store shopping assistants, while the Amazon app offers the capability to search by barcode.

While the augmented reality is a nice feature in IBM’s app, it’s expensive and the experience is fairly limited right now. Augmented reality requires a large amount of data transfer which today’s mobiles still aren’t very good at. However the advantage of mobile (over online and offline marketing) is that it can offer the retailer an aggregation of personal data – demographic, geographic, financial – which can then be tailored to customers and used to add an extra dimension in the in-store experience. While customers aren’t going to download an app for each store they purchase from, they’ll be looking for a platform which hosts a number of retailers, which is the thinking behind our SimplyTap app.

Small businesses are getting solutions too
Similarly, Dan Wagner is offering small businesses a mobile payment system with the launch of mPowa. Dan is an industry luminary who has massive insight into commerce and mPowa has broad platform and geographic appeal. However he’s joining a space already inhabited by iZettle and Square. We hope he makes a big success of it, there’s room for all of these guys.

NatWest adds more weight to NFC
Following on from PayWave (Samsung/Visa), PayPass (MasterCard), QuickTap (Orange/Barclaycard)and PayTag (BarclayCard), NatWest have announced TouchPay, their NFC payments service in partnership with Visa. NatWest have already established an enviable mobile banking base, having bravely ventured out into the space before their competitors. Undoubtedly it will be a great success.

Smartphones are everywhere
We can’t get enough of smartphones and new figures suggest that by 2015, 90% of the mobile market will be smartphone-based. But it’s not just the iPhone dominating the market while Nokia and Blackberry are suffering losses. We’re also seeing the rise and rise of Samsung, propelled last month by the release of the awesome Galaxy S3.

Helping retailers join together
Last week’s BRC Retail Symposium concluded that retailers need to be careful not to miss out on the mobile revolution. It’s in line with views which have already been expressed in the industry, including in our Retail Week Report which was published in May. Now we know that mobile is going to be big we need to work out how to help retailers through the revolution and not leave a whole group behind; because being a great retailer doesn’t mean you’re necessarily great at mobile marketing or mobile commerce.

Instant purchase for everyone
One of the ways that we’re helping retailers survive the mobile revolution is by simplifying purchase, making the journey shorter and capturing data. This week SimplyTap placed HMV adverts in Empire magazine which allowed customers to buy directly off the page with QR Codes. In the same issue of Empire, Amazon and Sainsbury’s were advertising rival products. Where it would have previously been a fight of the advertisers, only the QR code in the HMV ad allowed customers to make an instant purchase (the Sainsbury’s ad rather obliquely led to more information, while Amazon relied on brand play). As a result, only HMV/SimplyTap were able to capture and measure sales directly off the page.

 

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Welcome to The Mobile Money Network blog. Rather than just using this space to talk about the exciting things we’re getting up to, we’ll also be providing insightful opinion and thought leadership about the business of mobile commerce. Things are developing rapidly in this world and we’ll be analysing how these changes affect retailers, banks and multi-channel media companies.

The story so far

If you want to know more about our business then watch Mobile Money Network: The Story So Far. Featuring contributions from our chairman Sir Stuart Rose and Retail Week‘s George MacDonald, it serves as an introduction to the mobile payments revolution which is changing the face of retail right now. This year, 35% of retail traffic will be via mobile and by 2020, Visa expects 50% of transactions to run through mobile devices.

The Economist on QR Codes 

QR Codes have been failing to become the next big thing in the UK for a while, but according to The Economist, they’re finally taking off. One of the reasons they haven’t worked is that consumers need an incentive to scan, be that a competition, giveaway or the opportunity to buy. The feature crucially ignores what happens when you monetize QR codes. Purchasing with a QR code turbo-charges the offering and gives the consumer an instant hit.

Booming in-store smart phone usage

Mobile Commerce Daily says we’re addicted to using our smartphones and 33% of us would apparently rather play with our phones than have sex! When it comes to shopping, the figures are even higher. A report from Tradedoubler found that 42% of smartphone owners in Europe are going online in stores to check prices, read reviews and get product information. The next step for retailers is to capitalise on the smartness of these phones by offering the consumer a virtual shop assistant on their mobile. While consumers won’t want to download an app for every retailer in the land, our Simply Tap app can offer this service, and undoubtedly, the virtual assistant will be better informed than its human counterpart.

Mobile banking snack culture

This week a Forrester Report said that US banks were spending one third of their digital budget on mobile this year. We’re surprised the figure isn’t higher. In the UK, mobile banking has become an accepted channel, in fact NatWest customers are making more log-ins via their mobiles than their computers. They’re using their devices in different ways to interact with banks – mobiles use is characterised by ‘snacking’ for example, checking balances, making payments on the move, while bigger screens are used for more in-depth tasks. The upshot is that consumers are becoming more in-touch with their finances and building a familiar and trusting relationship with mobile banking and payments.

PayPal can go further

One of the benefits of mobile payments is that you won’t have to remember to take your wallet out with you. This week PayPal released a video showing how much easier it will be to go shopping in Aurora stores and Pizza Express with a mobile phone. While we’re all for mobile payment iniatives, we’re keen to look at the whole retail process. For the retailer, payment comes right at the end of a journey which includes marketing and getting the right consumers and products through the door. To develop the mobile payment space and benefit consumers and retailers, we need to innovate at each stage of the chain.

Media coverage

Mobile Money Network was in the media last week when our Simply Tap/Thornton’s Best of British offer was mentioned by Lorraine on her daytime ITV show.

We’re also gaining attention in social media land with the innovative Virtual Vinyl Store which has been produced from a collaboration between Simply Tap, Liam Gallagher’s fashion label Pretty Green and Universal music. As well as offering music lovers the chance to purchase classic vinyl and participate in a music quiz, we’re offering a great trip to see the Stone Roses play in Japan.

In an incisive piece in yesterday’s Guardian, our MD, John Milliken, called for retailers to respond quickly to the fundamental shift in consumer behaviour that is being caused by mobile phones. The article has been creating some noise on social, and is definitely worth a read and a RT!

Out and about

This week our team are attending Etail Europe and the British Retail Consortium’s Retail Symposium. Please come and say hello if you’re there too. We’re keen to exchange information and ideas across the industry, and actively encourage you to pass our blog onto your colleagues. If you want to contribute, please post a comment or contact us. Follow our journey here or @theMMN for daily hits.

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