Comment: What's next in mobile commerce?

With mobile becoming a central part of the end-to-end shopping experience, it's a topic retailers and merchants can't afford to ignore and is something they need to integrate into their business planning. In order for retailers, no matter what size, to take steps toward enticing customers in-store they need to understand the current options within the mobile landscape, technologies available to them and the elements that will enable them to enhance their relationships with customers.

Confidence and education in the use of mobile payments and commerce technology, such as applications, NFC and mobile wallets, iBeam and iBeacon among other technologies is continuously growing. Retailers and customers alike have become more familiar and comfortable with the terminology and of using these types of different technologies and applications to search for information about products and services, through to payment and loyalty.

As this proliferation of mobile continues, we will see more companies looking for new, interesting and convenient ways to use the technology to drive sales and to retain consumer interest and relevance. For example, online furniture retailer is trialling shopping experiences including NFC at its London showroom, enabling consumers to tap NFC tags to find out further information about items and email themselves a wish list of products they have viewed. In addition, a shopping centre in Solihull, UK, is piloting a service that lets shoppers access discounts and promotions from multiple retailers by tapping their phone against NFC-enabled posters displayed in the windows of participating stores.

NFC provides a clear opportunity for retailers to engage with customers in a convenient and simple way both in store and importantly on the move. The technology allows customers to tap to find out more about specific products in or out of the store and ultimately offers an easy and secure way to pay for items. Furthermore, NFC is expected to only gain in momentum, with research from the NFC Forum noting that half a billion NFC-enabled mobile devices are expected to hit the market in 2014 and grow to one billion devices by 2018.

The advantage to retailers is clear, when NFC is paired with other technologies such as digital wallets, mobile loyalty programmes, Bluetooth low energy (BLE) and geo location advertising, retailers have a comprehensive suite of tools to approach and engage with new customers while retaining loyal customers.

NFC companion technologies

As part of this focus on new technology, NFC momentum has also brought Hosted Card Emulation (HCE) in to the broader discussion, applications that emulate an NFC smart card and talk directly to the NFC reader, without going through a secure element. But where and how does HCE fit into the retail conversation?

The payment scene has become complicated over the past few years. Without a doubt, HCE will help NFC to be more accessible and versatile to developers and will expedite services to market which, as a result, will drive consumer familiarity and encourage adoption. Retailers need to evaluate where mobile will help them to improve how they interact with both existing and new customers and precisely which technology or combination of technologies will stimulate a change in consumer behaviour, inciting them to make purchases in-store and use their mobile devices to redeem offers and pay for items. HCE presents a suitable choice for retailers that are looking to offer what are perceived to be low-level secure services such as basic couponing or loyalty. As the major hurdle in adoption of NFC has traditionally been the ambiguity in the ownership of the secure element, the introduction of HCE-enabled NFC payments could well be the pivotal factor that could enable NFC to really deliver and finally justify the belief that the industry has had in it. We have to understand however that customer choice is paramount when selecting when and which coupons or vouchers to use, holding information anywhere other than on the device the consumer wants to use could be counterproductive to a consumer change in behaviour and a retailer or brand getting value for money on any investment in targeted promotion.

BLE, which allows devices to use less power than standard Bluetooth connections and offers the same connectivity with a range of 15 metres or 50 feet, is another technology that has been touted as a big enabler for retail. It allows retailers to target nearby customers, if they are within range, and push offers and advertisements to them via their mobile device. Bluetooth low energy also provides more control to the consumer compared to previous versions of Bluetooth. Consumers are able to easily filter out irrelevant messages and advertisements, choosing only which pop-up messages, offers or advertisements they would like to use or read.

Apple's iBeacon technology is the best-known example of BLE location-monitoring technology but PayPal is now rolling out its own beacons as well. Big name retailers such as Macy's and brands including Major League Baseball and the NFL are all set to roll out their own all Bluetooth smart beacons.

What technology to choose?

No matter what the technology application is be it BLE, NFC or mobile wallet, mobile devices offer an unparalleled way for retailers to interact with customers. However, retailers will need to review which mobile-related technologies will allow them to best engage with customers throughout their journey. To do this retailers must first look at their own business model to evaluate what they're already doing to engage with customers – prior to purchase, in-store, online and post purchase.

A number of questions then need to be answered and assessed prior to choosing a technology such as – is the goal to create more footfall or increase spend? Or is it to entice customers to buy a certain product or help boost sales on a certain day or month, or ultimately to build that brand affinity and for customers to return again and again?

The retailers that will succeed in boosting sales and engaging customers will be those that address the questions that matter most to their business and more importantly their customers. Retailers who pick a technology with a short-term view are only setting themselves up to be subject to short-term gains.

More importantly, if retailers aren't continually evaluating and learning about who their customer base is, how they want to talk to them or how they want to receive offers, updates or pay for items they risk alienating them by offering  irrelevant information – wasting both valuable opportunities and budget, therefore jeopardising the bottom line.

Different technologies, like NFC and BLE, can be particularly useful and impactful as long as they are used with a specific goal in mind. And with the caveat that retailers are committed to educating themselves, staff and customers on the technologies they're implementing and any changes that are made along the way.

Technology offers retailers and brands the ability to engage their customers and their bottom line like never before. But retailers need to carefully and strategically choose which technology path they want to follow and continuously make the effort to re-evaluate, and in some cases change tack, based on what makes the most sense long-term for their business plan, model and customers. Mobile needs to be an essential part of business and marketing strategy, as it is the only tool that customers choose to take with them wherever they go. Retailers' futures are quite literally in the hands of their customers.

Paul Crutchley, strategic engagement director at mobile operators association, the GSMA, will be writing a regular Essential Retail column on mobile technology's influence on retail over the coming months.

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