KFC China fast food restaurants accepted Alipay mobile payments since July 2015. McDonald’s China also adapted Alipay in September 2015. Consumers now can use unique Alipay QR code in their smartphones to pay for the orders, which transactions will take only two seconds or less. It will be more convenient and efficient for both customers and cashiers. All KFC restaurants in the country only accepted cash payments in the past 27 years. Though Alipay simplifies the payment process, yet the benefit of creating consumer behavior database has been the main reason to accelerate the cooperation of these two industry giants.
For retailers in food and beverage or FMCG industry, knowing consumer behavior and target customer segments for different trade zones is as important as improving product and service quality. Classify customers into different groups in terms of different needs and characteristics to optimize its products and marketing mix for store performance improvement.
Usually, brand owners could pull out consumer behavior data from CRM database. Yet it’s hard to attract people to sign up for the membership program without big incentives such as discounts or exclusive deals. Now collecting consumer data through mobile payment makes it easier. Using big data technology to build customer profiles, to forecast the spending potential from purchase orders. Specify demographics like age, gender and behaviors like product-purchase interests in local areas. Identify high potential customers regarding different trade zones to enhance sales promotion and market strategy planning for better store performance. Different target segments in different trade zones could also be a good reference for the new store location selection, sales forecast and lease negotiations.
Mobile payment not only provides superior customer shopping experience, but supports the demands of O2O commerce. Retailers could also use big data analysis to find out who are the most desirable customers, and then create personalized offers which they are likely to buy.
Nowadays people are getting used to use bank service via all kinds of digital channels, such as online websites or apps. Bank 3.0 is an inevitable trend as the evolving of technological advancements. Instead of walking into a physical bank branch, waiting in a long line to open an account or deposit money, consumers use banking services much like they shop online. From bank management’s perspective, moving toward digital services could also help to branch out touch points of reaching more customers but reducing operating costs.
However, what are the constraints to hold back the innovation of bank 3.0? Following are some unspoken challenges:
High IT security requirements: The requirement of accurate financial numbers, near real-time system updating frequency, and high firewall security in banking industry is much higher than other businesses. Bank IT departments tend to be very cautious of any new upgrade within its current operating system. They will ask for formal documentation to thoroughly understand technical details before rolling out to the organization, which will help reduce unexpected “surprise” and ensure compatibility with existing technology after implementation.
Paradigm shift in mindset: Besides technical issues, the mindset of some managers remains traditional. Some are unwilling to embrace the digital banking concept. It’s difficult to transform the whole organization immediately. Evangelizing the old schools gently about the new trend could be the best way to convert people.
Organizational politics: It’s never easy for an enterprise to develop new processes across multiple divisions without a long painful transition. The larger the organization is, the tougher the change would be. Therefore, how to implement the new technology smoothly is truly a leadership challenge internally that solution providers could do little as an outsider.
With the smartphone penetration rate rising, the customer shopping behavior in retail market has changed dramatically and impacted the traditional business model. According to a survey on online retail market in UK, mobile commerce has increased 254% between 2010 and 2011, and risen by a further 300% between 2011 and 2012. 69% of tablet owners make a purchase on their devices every month. The trend happens in emerging markets right now. Consumers have gradually adopted the new Omni-Channel shopping approaches, such as ordering from online shopping websites or App portals.
Have you used mobiles to pay credit card bills or transfer money among accounts via any Bank App? It’s far more convenient than visiting to a bank and waiting in line at counter for these trivials. With mobile banking boom on the horizon, many banks have adopted new technology to catch up with this inevitable Bank 3.0 trend, and release their own App to attract customers.
However, you may wonder whether this trend only happens in developed countries in terms of smartphone penetration rate. How about emerging markets with plenty of unbankable population, who cannot afford expensive gadgets? Surprisingly, people there may use mobile banking services daily more often than you’d expected. Below are some of the findings.
It’s not only smartphones can do mobile payments, but also any outdated mobile capable of texting messages can do it via “Text Banking”, a service which allows you to quickly request or receive account information via text message.
Prevalent among small businesses
It fundamentally revolutionized how people do small businesses. For example, a fisherman in Kenya rural village used to spend days commuting between home and local market for vending in person. Now, he can deliver fish through a bus and receive payment remotely at home. It saves both time and money to nurture his business dramatically.
However, it might backfire in both personal security and credit fraud issues. How can one ensure that his/her personal transaction records, such as amount, GPS location, account number etc, in the phone log won’t be exposed accidently or intentionally from the telecom company side? On the other hand, how can the bank or telecom company prevent one from using single-use cell phones for trafficking or frauds without further credit investigation in advance?
Mobile banking is without doubt rising and popular in emerging countries now. Many NGOs or banks are probing to reach out these unbankable population. How to find a balance between financial regulations and usage convenience is the key to build a better solution locally.
The goal of the marketing is always to send the right message to the right people at the right time on the right spot. Location-based marketing or geo-marketing seems trendy now but it is not a new idea at all. Traditional billboard ads at “selected” locations, or “regional local” TV commercials are also applying “location-based” concept in marketing campaign since it is broadcast the message to certain target audience by selected areas.
In the earlier web era, marketer used email or other web site to do promotion electronically but had not much choices on location or target segments. It was just a transformation from printed format to electronic format and was still a blind and massive way to push “unappreciated” message out to consumers.
Location-based marketing helps target consumers more precisely
Sending out the “right” message to target consumer is always the challenges to the marketers. With new technology and mobile device wildly adoption, it is now possible to capture where and when the consumer is, which presents consumer’s lifestyle as well as the product preference or interests. In short, location-based marketing can be more precisely target the potential clients to raise the campaign success rate. There are two main technologies used in location-based marketing currently:
Geofencing – It is the application or software that use GPS technology to establish a virtual perimeter or boundary around a physical geographic location, which requires satellites and cell phone towers to communicate with mobile devices. It is used in outdoor and larger areas to identify consumer’s proximal location.
Beacon – It is a device by using bluetooth technology to constantly emitting a signal to the receiver (mobile device) within a very short distance to trigger an application. It is usually used indoor to know more precise location of the consumer.
With those two technologies, marketers can track the consumer no matter they are indoor or outdoor, and hold different marketing activities to consumers based on the locations and time.
Nowadays Location-based marketing usually involves the four elements:
Smart phone/ tablet device – It is the central media to interact with consumers. Without the device, it is impossible to make the campaign happen.
Proximal location identification technology – As described above, it is to get where the consumer are in real time.
Campaign APPs – All the promotion idea and objective of the campaign are delivered through the APPs, which is the most critical part of the marketing activities.
Consumer’s behavior database/ model – No matter it is real time analysis or pre-set model, marketer needs to know what the consumer is interested or care, so that the appropriate message/ actions can then be brought to consumers.
More and more retailers are using location-based marketing campaign and getting good results from it. It is not just the trend but seems like an essential element to involve location component on all service to bring customer with better experience on shopping.
Below are some interesting and successful location-based marketing cases:
The Montana Bureau of Tourism, USA, winter of 2013-2014 : Pre-setting targeting consumer and analyzing demographics, sending out the relevant ads to those people who have visited ski-related store or locations in that season. This campaign combined consumer analysis in-advanced.
American Eagle, USA, 2013: Shopkick roll out 100 AOE stores with iBeacon trial plan. Customers will get message of the specific promotion of the store righter after they walked in the door.
Macy’s, USA, 2013-2014: in 2013, Macy’s applied iBeacon with opt-in app to track customer in store for promotion, and it seems play a big role for the 2013 black sales. In 2014, Macy’s combined the Apple pay to enhance customer’s shopping experience and convenience in store.