Unattended retail to take center stage in the collision of digital and physical

Technology today continues to grow at a magnificent rate. So significant, in fact, that experiences on your favorite website or app probably consume a considerable portion of your down time. Other online activities – such as watching TV, ordering food and managing money – are largely digitized activities today, whose user experiences are only getting better.

But while online experiences flourish, the offline world remains a struggle. Finding a parking spot, waiting on a restaurant check and navigating through festival crowds are the same headaches they’ve always been. Mobile technology, on one hand, is eroding much of this pain, through the advent of order ahead, check deposit capture and digital ticketing. Additionally, augmented reality (AR) and geolocation are playing pivotal roles in delivering connected experiences in previously offline environments – as seen with Snapchat geofilters and Pokemon Go.

The Mirroring Worlds of Personal Health and Finance

As humans, we consume. Our bodies were built to consume so that we can remain alive. We consume a Potbelly sandwich for lunch so that we have energy to make conscious decisions and perform at a high level at work. Occasionally, we add chips to our lunch order if we’re craving something salty.

In similar fashion, we as economic consumers pay $8.50 for that Potbelly sub, and another $1.50 for the desirable, but not crucial, bag of chips. Subconsciously, we know that the sandwich is vital to an energy level apt for afternoon work, while the chips are more of a nice-to-have. Chances are, the consumer’s body in this example shares the same opinion as his checking account on the addition of chips.

Evaluating the Top Mobile Apps for Personal Finance

Digital disruption is real, as Blockbuster, Borders and taxi companies will tell you. As digital permeates Financial Services, banks are continually pressured to function as technology companies and offer rich mobile packages – packages that have already evolved tremendously from the archaic offerings initially brought to market after the financial crisis.

Some have responded well to the demand, with vastly improved apps that narrow the gap to third-party apps that traditionally rank higher in app stores’ finance category. Banks like Chase have deployed increasingly sophisticated features and UIs that look more like a tech company’s than the traditional bank’s. And even while banks have made depositing checks and paying friends easier on mobile devices, customers still lack a truly functional mechanism for managing their finances in aggregate.

Introducing Differentiated Product Offerings in Banking

Fitbit did it with fitness challenges. Snapchat is doing it with lenses and geofilters. Uber will do it with Trip Experiences. This critical component of the customer experience is engagement. After providing customers with a good deal on your product or subscription through a seamless in-store experience or digital journey, give them a reason to use it all the time – and to use it over the five other similar apps or stores at their disposal. With the customer frequently on your turf, selling becomes that much easier.

Nurturing routine engagement, however, requires being unique from the customer’s other options. What makes Spotify the clear choice for streaming music over Pandora, iHeartRadio and Apple Music? Why Eatsa over other quick-service restaurants in San Francisco? Differentiation tactics span both physical and digital channels – and in some cases, a combination of the two. Let’s explore several examples across industries.

Mobilizing a Powerful Customer Experience

As any marketer will tell you, modern-day technology has created opportunities for brands to engage with customers in ways that were previously unthinkable. With the use of geo-location and push notifications within smartphones, communication can be made with the customer regardless of the time of day or activity being performed. But, with the evolution of mobile has also been a transformation in the customer journey – and therefore the need for brands to deliver an augmented and dynamic end-to-end customer experience.

Rather than simply making products widely available and tailoring offerings to a customer’s unique tastes and channel preferences, brands must take work off of the customer during all phases of the journey: from product discovery to distribution to consumption. Uber Eats has excelled in this domain by presenting the most relevant eateries to the user based on purchase history, restaurant proximity and food availability. Upon placement of an order, the customer can track its location, status and ETA in real-time using Uber’s maps API and its interface with restaurants and couriers.

Pondering “Foursquare Banking” by American Express

In an earlier post, I proposed that banks could enhance transaction account products by partnering with fintechs or other technology companies that have a competitive advantage in delivering rich, consumer-centric experiences through digital channels. By integrating the solutions of a non-bank like Yelp, Samsung or Google, a bank can add context to card and checking account transactions that coincides with the overarching consumer activity – ultimately creating new value propositions and revenue streams built on consumer data.

The rumor of Amazon’s potential acquisition of Capital One in early February largely validated the new value created out of this type of bank-tech partnership. And though Capital One, Amazon and the non-banks listed above are all solid candidates for delivering a co-branded product, the most compelling duo for producing such a solution is American Express and Foursquare.

Reimagining the Transaction Account

The lines between consumer and financial worlds have drawn closer over time. This began several decades ago with mass adoption of credit cards, as banks got their first glimpse into daily consumer activity and habitual spending. Uber, Disney Magic Bands and the “invisible payment” were next, removing friction from the payment and checkout experiences. Finally, mobile wallets have now gone mainstream, creating an entire ecosystem of use cases around the point of sale and end-to-end customer experience.

Banks have historically played an integral role in consumer-focused activities by virtue of owning the payment rails and gateways to cash. Being the custodian of consumers’ transaction accounts was a breeze in a day where all consumer activity came in the form of cash or checks. But as payments and transacting graduate to new levels of complexity, the role of its custodian must keep pace.

Avoiding Commoditization in a Democratized Retail Banking Space

A branding crisis is looming in the Financial Services industry. Its subtle beginning came with Mint and PayPal but became much more apparent with Apple Pay in 2014. New entrants in Financial Services – both smaller fintechs and larger technology companies – have created a crowded value chain that spreads the end customer relationship across a variety of parties. And now, as financial data becomes liberated through regulations like PSD2, banks have begun to rethink operating models.

Using Facebook Bots to Route Insights Back to the Customer

As millennials begin to make up a larger proportion of the consumer base, there will be heightened expectations on businesses to inform their customers of relevant information in real-time using the mobile channel. One way that many providers have responded to this need is by leveraging the real-time push notification smartphone feature, which can instantly alert or transmit insights to consumers.

American Express has offered real-time push notifications to its cardholders for quite some time – but has recently taken this feature a step further with the release of purchase notifications via its Facebook Messenger chatbot, which uses AI to perform a variety of customer support functions. Cardholders opting into the service receive real-time payment details through the Messenger app, with the option of retrieving other basic transactional information and the ability to navigate to their card account.

How Banks Can Remain Relevant in the Mobile Wallet Race

A once-fragmented mobile wallet ecosystem has evolved into a spectrum of definitive players that intend to be the consumer’s go-to payment method in physical stores, a space loosely defined as “proximity payments”. The evolution of this space has raised a conspicuous question: who owns the customer at retail checkout? Traditionally managed offline by the merchant, the now-digitized, in-store customer experience has undergone a paradigm shift that vaulted third-party tech companies into the driver’s seat.

Meanwhile, banks, as trusted custodians of a consumer’s payment accounts, see no reason why they can’t become consumers’ “everywhere” shopping and payment companion. Just a few names to invest in wallet infrastructure include: Capital One, Chase, USAA, Fifth Third, BBVA Compass and Citi. Though online and in-app payments have garnered most attention, proximity payments remain very much in play.