Thomas Frey: A fractal transaction is simply an automated point of money distribution. Money flows into the transaction, from one or more sources, and instantly leaves the transaction, automatically distributing money to one or more recipients. While this doesn’t sound like anything earthshaking, it indeed is. Fractal transaction are destined to crack open many new rich veins for business strategists to mine.
Imagine yourself sometime in the future sitting in front of a television, watching your favorite show, and a pizza commercial comes on. This is one of those commercials that hits you at exactly the right time and you instantly start craving pizza. For the next few seconds you stare at the screen and your mind thinks of nothing other than pizza. Finally you give in and utter the single word “yes”.
Thirty seconds later a flying pizza drone docks at your house with a piping hot pizza with exactly the right toppings. In addition to the pizza the drone also comes with a six pack of beer, and not just any beer, but you’re favorite import beer from Australia. When you gave the command by saying “yes” it automatically knew what you wanted.
The marketing world has long tried to figure out a way to combine the buying moment with the marketing moment. In this example I take it one step further and combine the marketing moment with the buying moment and the fulfillment moment. No time to second guess yourself because the transaction is complete. In this scenario, you will very likely have a slice of pizza in your mouth before you realize how much you spent. For major cravings, price is irrelevant.
Some people believe this to be the ultimate transaction with instant gratification, instant money exchange, and a satisfied customer. Personally I’m glad we don’t have anything like this yet because I’d weigh over 800 pounds. Adding a little friction between my brain and my stomach is a good thing.
But the transaction world is changing and some emerging new technologies are attempting to turbo charge impulse purchases by making it very, very, very easy to say “yes”.
Nothing kills a purchase quicker than making people wait. Take a crowded store and bottleneck the checkout process with too few checkout lanes and you can see the potential customers walking away. Some will even leave full shopping carts in the aisles. People hate to wait.
Today many retail outlets have converted over to self checkout lanes because even if people have to wait, it won’t be long and customers have more control over the process. Major retailers in Europe have stepped up their installation of the self-checkout systems after finding out that sales increased an average of 10 percent.
A recent survey in Munich, Germany, in April 2006 by Visual Merchandising Initiative, showed that 73% of customers strongly preferred self-checkouts to attended checkouts. Also, 70% said self-scanning enhanced their shopping experience, and 64% welcomed a reduction in waiting in store lines.
M-Commerce = Mobile Money
When it comes to wireless handheld devices, the Japanese are moving faster than almost everyone else in the world. Given Japan’s cash-focused consumer economy and the high percentage of people using cell phones, a wallet phone becomes an obvious next step.
According to a recent eMarketer study, over 95% of Japanese consumers already have a mobile phone. This compares to 75% of consumers in the U.S. and 61% in Canada. Japan is a culture that promotes the early adoption of new technology, and 16% of Japanese mobile phone customers already use some kind of m-commerce.
The idea that mobile wallets could replace traditional wallets is not science fiction to Japanese consumers. Over a third of those surveyed by NTT DoCoMo said that mobile wallets would not just replace wallets, but coins as well, and 26% even think that currency will disappear completely over time.
Mobile wallet chips can hold far more information than just a few bank balances. For example, they can eliminate keys from your pocket in the same way that a mobile wallet can eliminate the need to carry cash. Besides cardkeys, mobile wallets can also carry insurance information and other data found in the traditional wallet.
Even though mobile wallets are a relatively new phenomenon, NTT DoCoMo found that 57.5% of Japanese consumers are interested in using them.
Payments made by mobile wallets can provide instant feedback as well as the location of the consumer. For marketing people this creates value far beyond the dollar amount of the transaction. Experts on the Internet have often theorized how the targeting and feedback potential of the online marketplace will dramatically change things. Mobile advertisers who aim promotions at mobile wallet users will take this potential even further.
The Payee Side of a Transaction
Every transaction involves two side of the equation, the payer and the payee. While some version of the mobile wallet will be changing life on the payer side of the transaction, we are also setting the stage for some major changes on the payee side as well.