By Brian Kilcourse, Managing Partner
10/23/2007
Last week, the International Air Transport Association, which represents 240 airlines worldwide, announced approval of a standard that will enable airline passengers to download 2D barcodes to their cell phones or PDAs, and use those barcodes to check onto a flight. The capability is now being tested by Air Canada. Essentially the way this new capability will work is that when customers buy tickets online, they will register their mobile device, which will enable the airline’s system to subsequently download a 2D barcode via a text message. When boarding, passengers will present the barcode image to a reader.
AirCanada’s website offers the following instructions: “If your mobile device supports 2D barcode technology as most do, you will now receive two SMS text messages to confirm your check-in: one SMS text containing the details regarding your flight, and another SMS containing a link to a barcode image.” Even the instructions themselves underline the absurd level of ubiquity of mobile technologies, including as they do two technology buzzwords, “2D barcode” and “SMS.”
This innovation speaks to the tremendous capabilities of mobile technology for delivering value directly into the hands of consumers- without paper and in real time. Projects are cropping up all around the globe. Competition in South Africa between banking institutions FNB, MTN, and upstart WIZZIT for cell phone-based banking has been well documented in trade press. Digital marketing is finding acceptance as well. For example, South African mobile marketing company StarFish Mobile boasts clients as diverse as Cadbury and Coca Cola. Australian company Divoco offers mobile services for German retailer Nah & Frisch with mobile marketing capabilities. Another test project at the University of Muenster in Germany enables users to take pictures of coupons digitally displayed on public payphones with their cell phones and later redeem those coupons at local merchants’ stores.
So what’s happening with mobile commerce in the U.S. market? Although cell phones, Blackberries, and iPhones are everywhere, most offerings are still built around specialized use cases. For example, Starbucks is currently rolling out a capability that enables customers to buy songs from iTunes to their iPhones and WiFi-enabled iPods via the instore T-Mobile hotspot. The company expects to have this in all stores by the end of 2008. In another fairly well known example, EBay and PayPal work together with most of the major U.S. carriers to enable customers to bid on and pay for auction items.
Mobile cell phone-based banking is starting to heat up in the U.S., although it has yet to gain wide acceptance. Firethorn, a company that provides electronic commerce services, announced a partnership in September with America First Credit Union (one of the top ten U.S. credit unions) to provide mobile banking capabilities to over 400,000 of America First’s customers., with a “go live” date in early 2008. Clairmail, a competitor of Firethorn’s, announced a partnership in September with Verisign to offer mobile banking capabilities to financial institutions. While consumers continue to drag their feet about accepting chip-enabled debit and credit cards because of concerns about data security, cell phone-based payment systems would enable companies to leapfrog to a technology that consumers already embrace.
Although mobile commerce in any flavor hasn’t really hit hard in the U.S. market quite yet, “the times they are a-changing.” What does it mean for retailers? RSR research data indicates that retailers are still skeptical of the value of cell phones as an information, sales, and marketing channel; our last benchmark on multi-channel retailing (published in late-2006) showed that at the time, only 15% viewed the channel as “very important,” while 44% said “somewhat important” and 41% said it is “not important.” This is one technology where retailers don’t want to follow the industry’s traditionally long adoption cycle. Already in other parts of the world, companies have added mobile technology as a “touchpoint” to consumers, and they seem to accept it as easily as they do text messaging. Indeed; in London earlier this month, we were struck by how many advertisements on taxis and buses ended with the message, “To find out more, text message us at….”
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