Intro
After its recent unveiling in the US, the Google Wallet is expected to fly over to English shores pretty soon. But what exactly is this “Wallet” that Google are plying as “the next big shift” in personal payment?
Seeking to make redundant that tatty piece of leather currently occupying your back pocket, Google have increased your mobile phone’s capabilities to allow wireless payments for consumer purchases. Using “Near Field Communication” (NFC), a secondary microchip inside the mobile phone - though SK Telecom have shown that this could be integrated into the SIM in the future (see here)- allows the wireless payment of items when held next to the retailer’s corresponding device. In addition to currently holding offers, credit cards (currently only the Citi Mastercard and their prepaid card) and loyalty cards, Google prophesise that the Wallet’s future shall entail the storage of boarding passes, receipts and tickets amongst other things.
Sounds cool eh? But then there’s that little issue of security that automatically springs to the minds of all. Well Google believe that they’ve got this covered. Because Wallet’s use requires a PIN, Google asserted it to be actually safer than having a wallet. Whilst the likelihood of your phone being stolen (and possibly hacked) may make this belief contentious, without a promise of security no-one would ever give it a second thought.
Will it Catch on?
Whilst a brilliant concept and a seemingly inevitable next step in purchase payment, will the Google Wallet actually catch on? Though I’m sure CEO Larry Page would suggest this question has as having a resoundingly affirmative answer, the lack of use – at least domestically - of the supposedly “revolutionary” QR codes means it requires scrutiny.
Firstly, the Google Wallet is only being launched with the fairly underused Citi Mastercard (and their own prepaid card). Yes it’s quite a coup for Citibank, but unless more banks get on board and invoke real competition, it’s unlikely that retailers will consider the benefits of the technology to outweigh the costs of installation and use. Though Visa’s recent touch payment partnership with McDonalds indicates a push forward towards a competitive market, it also suggests that (considering the sizeable investment in such a venture) they’re unlikely to progress from this stage for a while. That said, such a heavy commitment may be seen by other banks as an opportunity to exploit. Either way, the Wallet’s launch looks likely to be fairly more fizzle than fireworks.
Conversely however, considering the now substantial power that Google have in the mobile market, and that they've stated that the technology shall become available on the Android platform, manufacturers will soon be rolling out the majority of their phone devices with Wallet capabilities. This would likely increase both consumer awareness and demand for the technology and pressurise both retailers and banks to get on board.
If it works, what are the implications for brands
This latest step towards all things wireless could well be an enormous step forward in commerce, but the Wallet's capability to automatically obtain and apply the latest offers could heavily impact brands at both ends of the pricing spectrum.
Those willing to discount their products will have the ability to increase the likelihood of their brand being front of mind to consumers when they are at their most receptive to influence.
The vouchers being in the consumer's personal space - their phone - gives them more control over what offers they pay attention to, and ultimately how they shop in the now overcrowded, offer-strewn streets and shop isles. To make customers aware of such promotions, there could be a rise in direct mail, particularly with mobile compatible techniques in order to secure at least an impression if not a sale.
With the availability of such offers having the potential to entice consumer trial and brand consideration where otherwise it might not have occurred, more "premium" brands could suffer. How to fight this? By ensuring that the customer experience and emotional connection the brand provides outweighs the benefits of cheaper, value brands. Whilst this may not be a new concept, the new and more personalised way that brand loyalty can be interjected by alternatives may mean that this is more important than ever. As such, such brands may wish to start considering focusing campaigns on brand loyalty well in advance to the mass uptake of the Google Wallet.
Also, the increasingly large amount of gift vouchers bought over the seasonal period may provide another opportunity for brands to exploit. Using Google Wallet, Christmas shoppers will (assumedly) being able to give gift cards at the touch of a button. As such, ensuring friends/family members perceive a specific brand to be to the recipient’s taste could be highly profitable for the brand, and also affect general awareness. But to guarantee this, due to the likely lack of proximity between the gift card purchaser and recipient (for gift suggestions), work must be done on the brand’s perceived demographic and perception. I.e. If Auntie Jo’s shopping for her 14 year old nephew Sam that she hasn’t seen in 6 months, her thought of “what shop would Sam like”, is answered by the desired brand and not a competitor.
Conclusion
Overall, it would appear that Google Wallet may be a bit of a slow burner, and is unlikely to have much initial impact. That said, whilst NFC technology is likely to merely supplement touchpayment for a while - now being automatically on most new bank cards - considering Google's track record of flinging large amounts of cash at new market ventures, it's arrival as a shopping norm appears a near certainty. As such, brands need to start preparing now.