Shiny New Object Vs. The Value Proposition

Just because a new and sophisticated technology comes along doesn’t mean it will be widely adopted and used.

A great example of this is in mobile payments.

Using NFC (near field communication) in mobile phones, which even Apple finally included in its more recent iPhones, a consumer can pay at a store checkout by simply tapping their phone to a checkout terminal.

Of course, not all checkout terminals initially were mobile-payment ready, but the number has greatly increased, along with the number of people who have phones that are mobile payment capable.

Despite all of this, mobile payments are still somewhat dead in the water.

A new study found that most (71%) people aren’t using mobile wallets regularly at point of sale. And these are early adopters, based on the survey of 900 consumers by BI Intelligence.

Approaching the three-year mark for widespread availability of mobile payments, only 2% of consumers use mobile payments seven or more times a week, according to the BII survey.

This is not necessarily because consumers aren’t warming to using their phones to pay for things. The same survey found that most (78%) consumers made a purchase on a smartphone, just not by paying in physical stores.

Mobile payment providers are going to have to add value and convenience in ways specific to the in-person environment, whether by rewards, transit integration, incentives or a method that hasn’t yet been identified, according to the BII study.

At the moment, consumers seem happy with the ways they pay now, with no need to change their behavior.

This is a great example of the value proposition.

If a new technology does not improve or enhance the act of paying for something at a store enough to abandon traditional ways, it will not win out.

This is a lesson in mobile payments that AI and IoT proponents should note.

8 comments about "Shiny New Object Vs. The Value Proposition ".
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  1. James Smith from J. R. Smith Group, July 27, 2017 at 10:09 a.m.

    Chuck:  True that some tech has a slow or early flat adoption curve...some just dies for want of, as you say, a value proposition.  But I wonder if we are seeing too many tech advances being launched in too short a time frame, which...aside from security overwhelming for most consumers. Your thoughts?

  2. Chuck Martin from Chuck Martin replied, July 27, 2017 at 10:26 a.m.

    That's a great point, James. It was slower during the early commercial web days, as each person had to get on the network. Now that all are connected, the product launch speed is greatly accelerated. More people/companies can more eaily launch more things. And to your point, the market can absorb only so much at a time. Teh technology may be relativley easy to create but changing consumer behavior not so much.

  3. Doug Garnett from Protonik, LLC, July 27, 2017 at 1:21 p.m.

    I signed up for Apple Pay right away... And there's only one way I end up using it... It's a simpler way to pay at Starbucks than using the Starbucks App. 

    The key is your comnent about consumer value. But I also think too many delude themslves that consumers want it to be easy to part with hard earned dollars. 

    Companies do. Generally consumers don't.

    Just look at my Starbucks use. A single corpration, trusted, where I buy regularly. In that situation I'm willing to trust phone pay. Otherwise, there's a bit of comfort that I don't make it too easy to spend my money.

    Amazon Go will also face this problem. I like to know what I'm spending my money on. And vaguely being charged for whatever is in my basket without reviewing it item by item at checkout is not going to be loved by people with scarce funds.

    We must respect the consumer more - and stop believing that just because we CAN (and our sci fi fictions tell us it's good) doesn't mean the market WILL.

  4. Chuck Martin from Chuck Martin replied, July 27, 2017 at 1:28 p.m.

    All great points, Doug. Also adds to the issue of some people wanting to do this and others not.

  5. Doug Garnett from Protonik, LLC replied, July 27, 2017 at 1:36 p.m.

    I have a hunch that how tight one's money is influences adoption - those with more money can be more comfortable risking a new payment option. But I haven't seen any studies that look at the question.

    Certainly not all QVC customers are wealthy yet they make buying pretty easy. But their customers also come to trust them over years of interaction and that minimizes a feeling of risk.

    Paying "wherever" by phone doesn't have that trust level.

  6. Chuck Martin from Chuck Martin, July 27, 2017 at 2:02 p.m.

    Studies do show that many consumers are skeptical of security associated with mobile payments, Doug. Have not come across any relating to the issue of personal financial situation in relation to mobile wallets.

  7. R MARK REASBECK from www.USAonly.US , July 27, 2017 at 7:02 p.m.

    Odd man Out.  will never EVER pay for anything using a devise. Exposure to your finacial "wallet" sounds pretty dumb to me.  In fact , I really get tired of people in a convienience store who uses a card for a pack of gum.  Takes way too much time when I can hand them a paper currency, take my gum, leave no trail for anyone.  I know one person who uses a phone for payment. A younger brother with a Starbucks addiction.

  8. Chuck Martin from Chuck Martin replied, July 30, 2017 at 10:22 a.m.

    You obviously are not alone on that, Mark.

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