Let’s talk about something that wasn’t announced at yesterday’s Apple event: NFC.
NFC, or near field communication, is a technology that allows two devices in close proximity to “talk” to each other. Whether you wave your NFC-enabled smartphone over a credit card reader to pay at a store or the store sends a coupon to your phone as you walk by, NFC is going to change the way consumers interact with brands, friends, money, social networks and more.
Don’t think for a second that the NFC-less iPhone 5 means that the intersection of smartphones, mobile payments and marketing isn’t at a tipping point. It is. The questions to ask are: How will it affect PR? and When will it hit the mainstream?
NFC opens a world of possibilities for marketers: trade show booths can broadcast a message, retails stores can deliver coupons and event managers can push notices to attendees, to name a few. Let’s look at NFC payment, which will have a unique and unchartered impact on communications.
The Familiar:
A customer receives a coupon in the mail. She keeps it in her purse until she makes her way to the store. At check-out, she pays using a credit card, asks the cashier to scan her loyalty card, then checks into the store on Foursquare on her way out.
The Future:
A customer walks into the same store. She pays with her NFC-enabled phone by waving it over the reader. During the pass over the reader, the store accepts her payment, registers her purchase in the loyalty program, redeems a coupon, checks her into Foursquare and sends a message to her Facebook friends.
With the simple act of paying for goods, retailers will be able to better connect with and understand customers. The exchange of coupons and discounts will personalize the check-out experience. Similarly, the well of accessible consumer data runs deep. The unprecedented access to data will provide report-loving marketers with endless metrics and critical data to track sales, adjust products, fine-tune messaging, develop custom apps and more. Ultimately, it opens the door for marketers to engage customers in a new way, strengthening relationships and adding depth to the sales experience.
Despite Apple’s decision to hold back, NFC is coming. Last month, Juniper Research forecast mobile-payment transactions to increase by nearly fourfold over the next five years to more than $1.3 trillion. Big names, like Google, PayPal, MasterCard and Verizon, have already claimed real estate in the mobile payment/NFC market. It’s just a matter of time before that future scenario is reality.
Ah, technology. It’s so fun to keep up with you.
As senior vice president at Cookerly, Mike Rieman specializes in building and maintaining relationships with the media and has an excellent track record of landing significant placements in print and broadcast media including USA Today, Wall Street Journal, Bloomberg and Money Magazine.
As design director at Cookerly, Tim serves as the creative lead in the development of branding campaigns, print collateral and digital media for clients across a broad range of industries, including consumer, professional services, healthcare and technology.
As vice president of Cookerly, Sheryl Sellaway uses her extensive corporate communications background to lead consumer PR efforts, deliver strategy for marketing programs and share expertise about community initiatives.
It’s telling that the absence of NFC on the new iPhone 5 hasn’t been much of a surprise to those of us who have observed Apple’s progress in this area. Yes, it would have been great if Apple had included NFC; but is that really going to obstruct the march of NFC? Idon’t think so.
The vast investment in NFC mobile contactless payments and services is not going to wane. And with the NFC-enabled Android, Windows 8 and RIM handsets dominating the smartphone market NFC is going to progress at a pace without Apple. This could be Apple’s loss.
Global brands such as MasterCard, Visa, Barclaycard, Orange and Google have committed, and will continue to commit, millions of dollars on developing NFC capabilities. With Apple’s eschewing of NFC, the other major brands now have a real opportunity to differentiate their offering and challenge the mantle for leadership in the innovation race.
Contactless terminals are being deployed across the retail industry as we speak in readiness for mobile contactless payments.
Apple is taking a different route with mobile contactless payments at the moment and that’s fine but it does mean that iPhone users will miss out on one of the other big benefits of NFC which is the ability to interact with marketing campaigns that use NFC tags embedded in posters and product packaging. We believe that it will be this sort of activity that will initially drive the use and demand for NFC services before payments take off as mainstream.
I totally agree that NFC will move ahead with or without Apple (although an NFC chip in the iPhone 5 certainly would have moved the needle). It’ll be interesting to see which NFC applications catch on. I expect that security concerns will be difficult to overcome, especially when it comes to payment and mobile wallets.
In related news, a supermarket chain in France just opened the first NFC-enabled store. Pretty cool: http://www.nfcworld.com/2012/09/12/317798/casino-to-open-worlds-first-nfc-enabled-supermarket/