When any new technology emerges, there’s much postulating about “what if’s” and “could be’s.” At this point, that’s about all we have when it comes to near field communication (NFC) in the United States. However, Isis – the joint mobile payments venture between AT&T, T-Mobile, and Verizon – is looking to solidify NFC adoption among the techno-savvy in Austin, Texas.
Austin is one of two announced pilot cities for the Isis mobile wallet technology (with Salt Lake City the second). While NFC is one of the most talked about technology trends for retail and it's expected to be a $214 billion market by 2015, it has yet to pick up any real steam in the states.
If any city could put NFC on the map, however, chances are Austin could do it. It is, after all, a college town, state capital, Live Music Capital of the World, and business and tech hotspot. Plus, it’s pretty weird. It’s the perfect blend of entrepreneurs, geeks, hippies, outdoor enthusiasts, and hipsters who love cool, new technology.
...
Sounds like Isis and Austin will be a
good mix, but the question remains: how will this new technology be
integrated into the city’s fabric? Beyond the obvious of having a robust
infrastructure, long-term success of NFCs requires that consumers find
the technology relevant to their daily lives. In the same way we can’t
help but tweet how amazing our lunch was, NFC vendors have to create the
same level of wide-scale market integration.
So, here are five ways I believe Isis, and other businesses looking
to springboard their technologies, can capitalize on Austin’s unique
vibe and receive successful adoption
1. Spread the Word with Festivals and Conferences
Austin hosts the Austin City Limits
musical festival every fall and the SXSW music, film, and interactive
expo every March. Both of these festivals would be a great launch pad
for Isis to promote NFC to a mass audience.
Austin City Limits has been the city’s premier music festival for the
past 10 years. Over 75,000 patrons attend each of the festival’s three
days. It’s essentially a frenzy of eating, drinking, dancing, singing,
and shopping. Oh, and it’s cash only. While seasoned festival goers
bring cash to accommodate their favorite activities, they also all bring
cell phones. What better way to create NFC buzz than to allow consumers
to fly through the lines and wave their phones to purchase a mighty cone?
And there’s the Holy Grail of interactive media, film, and music
festivals, otherwise known as SXSW. Selective placement of NFC terminals
throughout the SXSW interactive conference could get techies and
industry bloggers hyped about the service (it certainly worked for
Twitter). While Isis hasn’t said whether they will have a presence at
the festival, I think it would be a shot in the foot to skip out.
2. Find Innovative Ways to Integrate NFC With the University
Programs such as the Austin Technology Incubator have been innovating bright ideas for over 20 years. A 2010 graduate of the incubator, Austin-based RFMicron
is now one of the leading providers of hardware/software bundles used
for RFID-based asset tracking. To incentivize and increase NFC adoption,
businesses will have to propose ways to incorporate phones into the
retail experience. Combining RFID technologies with NFC payments is one
way they can do this.
With more than 50,000 students, The University of Texas at Austin is
clearly brimming with opportunity. If you’ve dared step in the city
limits on a Saturday in September, then you know there are well over
100,000 football fans that don the city. NFC would be an extremely
convenient way to grab a quick box of popcorn before the next touchdown.
Add in the fact that UT is #1 in merchandising sales
of all U.S. colleges, and has held the top spot for five years. So, why
not tap into this fervor, too? Pair NFC with that burnt orange T-shirt
everyone is buying and you have great potential.
3. Create NFC Purchasing Habits at Hip Food Venues
Austin has some great food and restaurant opportunities for all occasions and budgets. Like Portland, LA, and many other US cities, Austin has seen a resurgence of mobile food trucks.
And while many are cooking up new and innovative foods for cheap eats
on the go, they’re stuck to cash transactions for a number of a reasons,
including hardware limitations, implementation expense, and a
hard-nosed defiance in paying credit card processing fees.
Simply put, business owners would have to understand how NFC could bring more customers to rationalize the investment. A 2010 study
by the Journal of Consumer research indicated that consumers were more
likely to make an impulsive “unhealthy” purchase on credit than cash.
Would the same hold true for NFC? And would this be enough to entice
mobile food operators to adopt the technology at the chance of
converting the all-things-healthy-and-organic consumers to buy a Hey! Cupcake?
4. Integrate NFC into High-End Supermarkets
We recently wrote about the potential NFC has in a grocery store
environment. And when it comes to food, Austin prides itself on having
the best of the best. After all, Austin is the world headquarters of
Whole Foods and home to other higher-end grocers, like HEB’s Central
Market.
Near Field Communications World recently wrote about the innovative use of Quick Response (QR) codes
by the second largest supermarket chain in Korea. Using a series of
images, the chain recreated a grocery store layout inside a subway
station, allowing commuters to take pictures of food they wanted to
purchase. The food was delivered to their home that evening.
Combine ideas like this with NFC and you have the ability to
instantly track purchases and provide loyalty rewards and coupon
promotions – all fuel to add to NFC’s revenue fire. Companies like ViVOtech will need to push retailers to take the plunge to test the waters on NFC payment and promotion opportunities.
5. Attract the NFC Crowd in Merchant Neighborhoods
Austin’s South Congress Avenue (or “SoCo” to the locals) is known for
its art mavens, fashionistas, and savvy shoppers. Many frequent the
small apparel shops
and merchant tables commuting from work, after a bike ride, or on the
way to meet up with friends. While strolling the stores, most are taking
pictures, texting, or chatting on their phones.
What if someone sent a picture of a necklace to a friend asking her
opinion, and then her phone prompted her to purchase the piece of
jewelry? Pending friend approval, this sale would close in an instant.
To gain widespread adoption, NFC will need to capitalize on such
opportunities to easily convert casual browsers into paying shoppers.
Austin’s Adoption is Key to U.S. Success
Given the payment options available at the point of sale, NFC is just
another to add to the list. In the same way American Express made it
cool to be a cardholder, NFC vendors must capture the same level of
enthusiasm to convert cash and card shoppers to mobile payments.
While Austinites are certainly open-minded, savvy, and quick to
evangelise cool things (and the infrastructure is certainly strong
here), widespread adoption across the United States will require NFC
vendors to find that right blend of backbone with consumer readiness and
desire.
For now, however, we’ll just have to sit back and continue to ask our
“what if’s.” So, what do you think: are US consumers ready for NFC, and
is Austin ready to lead the way? Share your thoughts below.