by scott.gillum | Sep 15, 2014 | 2014, Tech Trends
Like much of the world I tuned in last week to watch Tim Cook unveil the latest Apple products and services. Afterwards, I was curious to see the analysts and so called “tech experts” reactions on the announcement. Most were ho-hum “nothing new here”, and “it was what we expected,” the market response was similar, with the stock getting a small bounce then falling after the announcement.
Apple, better than anyone, gets the “use case” right for its technologies. And it is why I was surprised by the media and analysts reaction. Listening to the announcement and recap, most of the focus on Apple Pay was on Retail use. In the press release, Apple discusses the near field communication (NFC) technology, names its retail, credit card and bank partners. Pointing out that there are merchants ready to accept Apple Pay as a very secure payment method. But nothing that really got the media excited, go into any Starbucks on any day and you will see plenty of mobile transactions.
Digging a little deeper, buried at the bottom of the announcement is something more intriguing – “Touch ID” which enables “one touch checkout” for Online Shopping Apps. Say good-bye to the hassle of entering your credit card information on the small screen. See something you like, touch it, and it’s yours!
App developers have already started building Touch ID into retail apps. On the same day of Apple Live, Target announced that it has adopted the Like2Buy platform that which allow the chain’s Instagram followers to buy products featured in photos and Target is now integrating Touch ID into its mobile app. Touch ID for mobile apps is the big deal, but not for the reasons you might think.
Apple is a “big play” kind of an organization. A $349 watch, and people upgrading to an IPhone 6 isn’t going to move the needle for a $171 billion dollar company. Apple Pay helps but that’s a basis points play that gets split multiple ways between the service provider, credit card company, the bank, etc., and it will take years for it to be widely accepted. So where’s the “big play” with Apple Pay?
It’s mobile advertising. According to Mary Meeker in her 2014 Internet Trends report, mobile advertising represents a $30B opportunity in the US alone, based on time on device. Ad spend has lagged because of issues relating to tracking and measurability.
This is why Apple Touch ID is so important; it has the potential to improve tracking, measurability and ROI significantly. With TouchID the buyers never leaves the screen to transact. Attribution, tracking and conversion rates will improve, but the challenge remains — how do you get consumers to transact?
According to McKinsey’s From solutions to adoption: The next phase of consumer mobile payment, you give them a special deal or offer – an ad. There’s the closed loop.
Most important Drivers of Mobile Payments
Respondents ranking most important (light blue) and least Imports (dark blue)
Apple has had a long history of introducing products at the beginning of the “hockey stick”, usually relating to the consumer adoption curve of new technologies, this time the hockey stick is mobile advertising. The real payoff of Apple Pay for now, in my humble opinion, is not retail, it’s mobile and it is about buying on your phone versus paying with your phone.
by scott.gillum | Apr 18, 2013 | 2013
I grew up in a factory town, a community of craftsman. At 15, my grandfather watched as they built the factory where he would work for fifty years. On the day it opened he got a job working on the assembly line. At its peak, it employed 10,000 people.
During that time, the town grew and merchants prospered. But as production at the factories slowed and the work moved overseas, the merchants began to feel the impact, and when the big box retailers rolled in, it killed them. By my teens, the new reality was high unemployment, vacant storefronts, and the once thriving downtown shopping area was now a ghost town.
Started in Brooklyn in 2005, Etsy was the idea of Robert Kalin, Chris Maguire, and Haim Schoppik, who modeled it after open craft fairs. In an article in Wired magazine writer Rob Walker described Kalin’s vision as “a cultural movement that could revive the power and voice of the individual against the depersonalized landscape of big box retail.”
The site was originally designed to be an e-commerce platform for handmade items, on the belief that hand crafted items had “an intrinsic value” that should be given a forum outside of traditional retail. Etsy has since modified its policies to include designers of goods, and curators of vintage goods (20 years or older).
Example Vintage Shop – Forever Fashionable
It provides users (shop owners) a virtual storefront on the internet for a small fee of $0.20 per listed item. Providing global scale for small shop owners who design, build, or curate items such as art, jewelry and other handcrafted items.
Unlike the Fancy or Ebay, Etsy puts the focus on their shop owners, which now number 800,000. Visitors can read shop owner’s profiles, follow them, and see the items and shops they favor. Perhaps most interesting is the video series Etsy has created to tell the stories of it craftsman and curators, celebrating their passions, interest and ambitions.
Example Shop Owner Video
Etsy now enters an interesting time in its rapid rise. In order to scale to the next level, it must wrestle with the challenge that handmade items also come with production limitations. As the site tries to stay true to its founding vision of handcrafted items, it has loosened the rules to allowing for the option of “remote employees.”
It now acknowledges that not every designer actually has the desire and/or capability to build what he or she designs, permitting production to be outsourced to someone else.
Perhaps the most shocking change is that Etsy is piloting integrating into mainstream retail through an arrangement with West Elm (owned by Williams Sonoma) that would bring Etsy merchant’s products to the shelves of the nationwide chain.
For now, Etsy won’t put big box retailers out of business any time soon, but given the current state of retail it may be an evolution that is much needed. With the evolution of ecommerce and the rise of big box retailers also came the coldness of impersonal transactions.
Etsy offers its 25 million members the opportunity to develop a relationship with shop owners, to become an admirer of their work and/or appreciate their eye for style. A chance to do business on a personal level again, with someone they know, and/or share a similar interest or passion.
And as a result, it changes the buying experience from one of procuring an item because of the functionality or utility, to one of investing in the uniqueness of the idea that originated it, and in the skill of the craftsman that produced it.
Etsy offers all the things you loved about doing business with a small proprietor or craftsman in your local community without the geographic limitations. It’s an opportunity to reconnect to humanity and to the small merchants that built the downtown you knew as a kid.