Google has published a promo video for its Wallet system, and it further demonstrates the feature that was launched a while back. It's impressed many with the possibilities of "wave and pay" contactless credit card payments and how they will improve shopping. But the video misses out on a couple of key aspects of the technology that'll change shopping forever, and they have everything to do with advertising.
If the video accomplishes nothing else, it shows just how easy NFC wave-and-pay systems work. It's a subtle difference, but not having to fish out a plastic card from your wallet and swipe it through a reading machine actually speeds up the checkout process significantly. Plus, having your payment details stored in your phone is going to be handy so you can see what you've been spending. And now MasterCard has just demonstrated an even more clever system based on Wallet and its own payment tools: QkR. It's a smartphone app that uses NFC, Wallet, and other tricks like QR codes and un-hearable audio signals in TV shows that actually transmit shopping data the app can "hear" to enhance shopping for everything from food in a restaurant to items advertised on TV.
This is just the tip of the iceberg, however. For another hint at how shopping will change, check out how Apple and Starbucks have been expanding their iTunes-based partnership that lets iPhone users download a free tune when they're in a store using its Wi-Fi. Recently Starbucks expanded the program to gave away the paid app Shazam Encore; this week the freebie is an extended sample of an e-book; and in the future it's said that TV shows will be given away. Wallet, and systems like it, offer the ability to combine a store loyalty card along with your credit card info--when you pay, in a single move the store updates your loyalty points too, and in effect Starbucks is buying your coffee store loyalty with its Apple-enabled treats.
Advertising, driven by tech like this, is about to change. When you use your phone to make a wave-and-pay payment, it will transact with the store's computer to share your data over a very short-range wireless signal (perhaps NFC or Bluetooth 4 or some other system). But your smartphone also knows where it is thanks to A-GPS and other location services, and has its own Net connection. Combined, this tech will let a store deliver tailored adverts to you in highly precise ways. Perhaps when you pay for an item, and assuming you've clicked "agree" on the store's preference panel in your smartphone pay app, then your phone will get an advert downloaded to it in addition to the store loyalty points—perhaps giving you an incentive like delivering more loyalty points or possibly a small discount on purchases if you consent to auto-ad delivery.
Amazon is testing this sort of system out right now on its e-ink based Kindle e-readers, with its ad-supported editions that show adverts when you're not using them to read an e-book—it even expanded the trial this week with local deals served up through its own network. There's no reason that Amazon won't use this system in a more enhanced way on its upcoming Android tablet, using the better tech of a full tablet to push smarter adverts at users.
What if your iPhone detected an NFC or Bluetooth signal as you walked into a store, and auto-prompted you with a unique advert, a deal (calculated on the fly by the store's systems, matched to your shopping habits and what stock the store would like to move faster)? And the simple "picture and slogan" advert is only the simplest way this can work, because a smartphone is a tiny computer, so an advert could take the form of a brand-smattered app—perhaps one that's useful to you in a way beyond simply shopping, ensuring that the brand gets shown to you more often. As Apple is showing (and aggressively patenting too), a shopping incentive could even be a video, a game, or a piece of music. All of this could be delivered to your phone in a variety of different ways, using a local Wi-Fi network, Bluetooth or even NFC (for small amounts of data), leveraging location-sensing. And wouldn't you accept, say, a 1% discount on a purchase if you consent to tweeting out info about your purchase, or a store-related message, at the point of sale?
Brands will favor systems like this because it lets them deliver offers to you at just the right moment (when you're thinking about spending money) with an almost unmatchable precision. And by tracking how you react and how you generally spend, they can adjust their advertising and deals with even more precision. You'll accept the enhanced adverts, because they'll actually deliver offers and discounts to you that are useful, rather than the scattershot promotions we're exposed to nowadays. And the upshot will be that shopping moves from an activity where you chose an item then take it to the cash register and hand over your credit card, to a more interactive, multimedia-enhanced affair with your smartphone or tablet PC as a vehicle for interacting with a store. Plus it'll likely come with some of the security benefits enabled by using a smart shopping system (perhaps, as Apple suggests, using your phone to "sign" your signature to ensure you're the only one who can shop with your phone).
"Shopping" is a word that'll need to be re-thought.
[Image: Flickr user thomaspurves]