Maximizing Mobile

While the idea of scanning a bar code with your phone may seem like something straight out of the film “Minority Report,” the concept is closer to wide-spread adoption than you might think. Retailers throughout the world are finding ways to leverage the power of cell phones to increase sales, generate loyalty and improve customer convenience.

A quick glance at the numbers shows why mobile mania makes sense. After all, there are 260 million cell phones in the United States, compared with fewer than 100 million credit cards. Cell phones have become a part of our identity, while wallets just take up space in our pockets and purses.

Tom Parker from San Francisco’s Bay Area Rapid Transit spoke last month at NRFtech about results from a trial that allowed participants to pay for their rides with cell phones. System-wide adoption of mobile payments would have a tremendous impact on overhead costs, Parker said: After all, it costs 6 cents to process every dollar bill that BART takes in. There was no doubt that mobile payments would be more economical.

And minimizing overhead costs wasn’t the only goal: Jack in the Box used the BART trial to drive traffic. Trial participants could use their phones on nearby “smart ads” to find the closest Jack in the Box location and download a special coupon, then pay for their meals with their phones.

Other retailers are rolling out the concept nationally. Last month, Polo Ralph Lauren announced that customers will soon be able to scan codes from print ads and storefront windows to be directed to a new mobile commerce site.

While these announcements are making news in the United States, the craze has already caught on in other parts of the world. In Japan, it’s not unusual to see people buying train tickets or vending machine products with their phones. And in the U.K., nearly half of mobile users have researched a product or service with their phones, while one in five has made a purchase with it.

U.S. consumers haven’t yet shown this same level of desire to embrace the mobile movement. As a result, the burden is on retailers and manufacturers to demonstrate the advantages, the airtight security and the ease of mobile payments.

There is another hurdle, too. While mobile may represent the next best thing for technology leaders, it can be challenging to convince others that its benefits outweigh the costs. At NRFtech, Kroger chief technology officer Jim Scott cautioned that the best way to sell the value of mobile payments is to focus on how it would improve the customer experience, not on how it could solve myriad technological issues.

For many large retailers, making the leap into mobile would require considerable investment, a solid database and a strong commitment from the top. But if we’ve learned anything from “Minority Report,” we should know not to dismiss the idea too quickly.