Consider the first iMacs. The computers were remarkable because of their clean-and-simple approach to design. The devices were all-in-one; they looked like a great big monitor and came in a few colors. That was all brand new and exciting. But they also didn't do one thing: they didn't include a floppy drive. There was a hard drive and there were USB ports for external drives. But there was no floppy drive.
By doing that, Apple essentially killed off the floppy. The company made a statement by not doing something, which clearly communicated that it believed the technology was over and it was moving on to a more elegant solution.
Apple did it again, perhaps even more dramatically, with the iPhone and Adobe's Flash technology. The infamous stubbornness of Steve Jobs held the line for years, steadfastly refusing to believe that Flash had any place on his phone. Flash is still somewhat alive, but really, Apple started the beginning of the end.
Last week, Apple released its newest iPhone with a bunch of new features. Not sure if this particular model has anything truly remarkable (not that it didn't sell out in an hour, though). But, once again, it didn't have something that sent a very clear message. Apple decided not to include a near-field communication (NFC) chip in the phone.
And it's possible that that may be the beginning of the end of a technology that was a leading candidate in enabling the behavior that we all know is bearing down on us marketers like a runaway train: using mobile while shopping in the real world.
The Mobile Marketplace
Let's consider what is at stake, regardless of what technology enables it. Shoppers are increasingly understanding that a smartphone makes shopping a lot easier, faster, and more economical. According to a study by the coupon giant Valassis (and quoted in eMarketer), mobile coupon usage has doubled in the last year. As well, 25 percent of users are looking for those coupons on their phone and 62 percent are at the very least using their phones to check on prices.
But even more compelling than any of those numbers is the big news that happened at some point over this summer: penetration of mobile phone users in the United States passed 50 percent. We are now in a new era where (very soon) more people will have smartphones than don't. The mobile shopping behavior that the leading-edgers have been engaging in is going to become even more prevalent and natural.
Today we have people who are using their phone before and during their shopping trip, really up to the point of the checkout. Then they put the phone away and pull out their credit card. In fact, it is still considered a bit rude to have your phone out when you are checking out.
That is going to stop.
Payments as the Last Moment
Which brings us back to NFC and Apple's non-inclusion of the technology. Google has been pushing NFC for a while now. It has it built into the Nexus, its flagship Android phone. Essentially, NFC is just wireless data transfer. But the core use case is for payments; Google Wallet relies upon NFC.
When Apple decided not to include NFC, it either felt the technology wasn't ready for its device, or it wanted to rely on a different approach - something it calls Passbook. Announced at Apple's developer event, Passbook is a single app that holds all of the stuff that is now making your (real) wallet so thick: loyalty cards, boarding passes, and coupons. Passbook promises to bundle all that up and make it easy.
Are we getting prepared for a Google Wallet/NFC vs. Passbook/other tech battle? Who knows. But we now have a clear vision of what is going to come next: two major players have begun to focus on the checkout. Most marketers tend to not worry too much about checkout. Our job is done. We got the consumer to want to buy the product and they are paying. How they pay is not much of a concern.
But now, checkout is becoming a core part of the digital ecosystem in which we are all operating. Marketers have begun to stop thinking about their job as simply getting people to buy something and start thinking about their job as starting and growing relationships. Now that the checkout is intrinsically connected to the entire process, and not simply the handing over of money, we need to make it a part of our process.
In 1960, someone named E. Jerome McCarthy outlined what he called the Four Ps Classification. It was meant as a high-level guide that helped develop marketing strategy. The four Ps were: price, product, promotion, and place. Today, I think we need to add one more P: purchase. That action needs to be a part of your plan, if for no other reason than it is not only the completion of one transaction, but the gateway to the next.
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Gary Stein is SVP, strategy and planning in iCrossing's San Francisco office. He has been working in marketing for more than a decade. Gary lives in San Francisco with his family. Follow him on Twitter: @garyst3in. The opinions expressed in Gary's columns are his alone.
March 19, 2014