Announced today in a joint press conference with Citi, Mastercard, First Data and Sprint was the launch of Google Wallet a Near Field communication (NFC) payment system which is about to be test launched in New York City and San Francisco. This mobile application and hardware will allow consumers to use their mobile phones as a payment device (tapping it on a PIN reader) as well as potentially use it to hold their loyalty cards and product coupons which they can immediately redeem in store.
Its all about the data…
Why would Google want to get into the mobile payment industry? Think about the purchases you make on a daily basis and what they say about you. By compiling a list of a person’s purchases you can tell their geography (where they live and hang out), approximate their demographic and financial data and get a deeper look at their spending habits (what stores do they frequent, what sort of products do they buy etc). Like any other initiative that Google does they will be using your data to target advertisements in the form of offers and loyalty programs.
Further implications:
Without knowing the governance of this type of consumer data (and not knowing Google’s future plans) through the help of Google, companies could potentially have a wealth of data at their fingertips as a result of this initiative. First through the use of loyalty programs companies can link offline user accounts to their online accounts and compare their purchases. This could help them see the recency and frequency of purchases ( good ol’ RFM) but also see how consumer behaviour differs between the two outlets. By having this data they can make a wide variety of changes to what consumers experience either in store or online.
Again if privacy regulations allow it, companies can also get a better view of their customers and the general public on a more macro view. Having access to this wealth of purchase data companies can see what segments of customers are purchasing their products, what other products they are likely to buy and in some instances get a better sense of the purchase cycle. In terms of a supply chain view companies could also see at what times in the year consumers are more likely to purchase products and as a result they could work harder to move customers into their stores at these peak times.
Looking at this from a marketing and CRM point of view this development from Google has a lot of potential for companies to better reach customers and optimize efforts. On the consumer side of things it could get a little scary. Essentially through the use of this app you could potentially be giving away all of your purchase data for Google to sell to companies.In the past this hasn’t gone that well in the realm of public opinion ( remember Facebook beacon?). With more companies looking to move into the mobile advertising and payment field this will definitely be a development to watch for as to whether it works for the better or worse.