SAN DIEGO—Let’s get one thing straight: No one’s going to Mars after the CTIA Enterprise & Applications show.
That was the opening remark by Dan Schulman, group president of enterprise growth for American Express. Those who remember Sir Richard Branson’s spring CTIA keynote and subsequent April Fool’s prank a few years ago will understand what that’s all about. In 2008, Branson took the stage to claim Virgin and Google were taking volunteers on a solar-powered space ship to Mars.
Despite the hoax, Schulman, former CEO of Virgin Mobile USA, was invited back to this week’s CTIA conference, and while Mars is out of the picture, his keynote yesterday illuminated a mobile commerce and payments space that is definitely headed towards the realm of science fiction.
While NFC-enabled payments are all the rage, Schulman said that tapping a phone at the point of sale (POS) is just the tip of the iceberg, adding that the road ahead necessitates teamwork amongst all the ecosystem players in the audience
“It is very clear to me that mobile and commerce are on a collision course, and over the next several years that’s going to play itself out, and it’s going to affect all of us,” he said.
Specifically, Schulman explained how the stage is set for mobile commerce and payments to revolutionize the way consumers think about shopping, with brick-and-mortar retailers being forced to either adapt or die. “I just heard someone say that Best Buy is becoming a showroom for Amazon going forward,” he said.
His point was that today’s shoppers are equipped with smartphones that allow them to price compare on the go, download coupons and get recommendations from friends. If a product is available for less from an online retailer, the physical retail outlets become less a purchase point and more of a place for consumers to touch and feel products.
The change is already happening, as market caps for brick-and-mortar retailers are slumping while online retailers are seeing strong growth.
“Bricks and mortars are desperately trying to fight back against online retail,” Schulman said, emphasizing how it will be up to the brick-and-mortar companies to imagine commerce as a completely digitized experience and then get on the bus or be left behind altogether.
The digital shopping experience will be more sophisticated, offering advantages and efficiencies for marketers, retailers and consumers, he said. Schulman imagines a day when consumers will tap their phone as they enter the store, allowing the retailer a complete purchasing profile, replete with favorite brands and products. If the consumer has opted in, they’ll then be served with offers and coupons that are specifically geared towards their interests and based on what they’ve purchased in the past.
“You basically go into that store, and your phone says here’s the SKUs of products I usually purchase, here are the brands that I prefer, the budget I’ve got, the coupons I’ve got, and basically the retailer can respond to that and do customized offers back to you,” he said, noting that this type of technology represents the first time that marketers have ever been able to track an offer all the way down to the POS, allowing them to see who’s purchased and who hasn’t.
To that end, American Express is working on its own mobile wallet product, which enables consumers to pay for goods online with a combination of credit, cash and virtual currency, such as loyalty points, but it’s primarily being implemented for online commerce from desktops right now.
“Today, if you wave your phone at a cash register, in most cases, the person behind the register is probably going to look at you like you’re crazy,” Schulman said, adding that the American Express’ platform enables commerce now before NFC becomes deployed and will migrate to NFC once that technology sees more adoption.
In the end, mobile commerce, and all of it many facets, represent a pretty big jump for not just this industry but the world. In order for this kind of grandiose vision to be realized, large companies that are often slow to react and resistant to change are going to have to move quickly and with the right partners, he said.
Schulman thinks that the alternative is grim for those who can’t wrap their heads around where this space is going, pointing out that only 22 of the Fortune 100 companies from the 1950s are still included in that elite group today.