Google on the future and evolution of Search

Google wants to own your Wallet...

Or should it be –How will Google end up owning your wallet? 

Yesterday’s launch of Google Wallet was a watershed moment for the payments industry. Google announced an app that will turn shoppers’ phones into their wallets. Google Wallet enables consumers to securely store their credit cards, coupons, loyalty, and gift cards on their phones, so they can pay, redeem offers, and earn loyalty points - all with a single tap on their phone. It is in a field test now and will be available to all consumers this summer. 

But what makes this so unique? - it’s putting the wallet in a single app on your mobile phone. 

Google Wallet is designed for an open commerce ecosystem. Since Google Wallet is a mobile app, it can do more than a regular wallet ever could, like storing thousands of payment cards, loyalty cards, gift cards, receipts, boarding passes, tickets, and Google Offers. Every offer and loyalty point can be redeemed automatically with a single tap via NFC.  Google Offer is in direct competition with Groupon, and we will likely hear about the launch sometime next week.

Google Wallet is not a simple replacement for an ordinary wallet; it is an example of the ‘Wallet of the Future.’ Launched in partnership with MasterCard, First Data, Sprint, and Citi, Google wants to move your money wallet into your phone. Here is the product launch Video.

Stephanie Tilenius, vice president of commerce at Google, announced at the launch “We are about to embark on a new era of commerce. We believe that 2011 will be the year of mobile local commerce. Just TAP, PAY and SAVE”. She said “The world of commerce is ripe for a new wave, we are on the verge of major shift in payments and therefore commerce. Google is uniquely positioned to bring about this shift and accelerate.” 

To me, Google Wallet is the perfect Mobile and Local Commerce coming together. It brings together Merchants, Payments Networks, Carriers, banks, and other pieces of the ecosystem to make this possible. 

Think of it, there are over 3 billion mobile phones worldwide, and over 40% of the world’s population carries a mobile phone, far more than using a computer or accessing the internet. Mobile Phone is fast emerging as a ‘preferred’ transaction medium. Smartphone sales grew 72% in 2010, and 300 million smartphones were sold globally in 2010. Several forces are accelerating the pace of customer adoption. Read my earlier post on M-Commerce to understand this better. 

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How are various blocs coming together? 
Study the Google Model carefully, and you will understand the cleverly crafted master strategy. You will see how the different blocs (refer to image) are falling into place in a mutually reinforcing manner. The Offer and Wallet model allows Google to get precious customer information correlated directly to sales in the physical world and will enable it to place relevant offers and serendipitous advertisements when shoppers are in stores, ready to spend money and even more receptive to coupons and other discount offers. 

Currently, Google is not taking any 'cut' from the payments revenue; However, Google would make money by selling coupons and advertising that come along with the experience. This isn't Google's first attempt at electronic payments. Google "Checkout,” an online payment service launched in 2006, met with limited success.


Evolution of Payments: 

In the past few thousand years, the world of payments has not changed much—from coins to paper money to plastic cards. Now we’re on the brink of the following significant shift. The Initial phase of e-commerce was about leveraging HTML and web technologies to bring consumers online, very similar to how we shop today. In 1994, it started with Amazon and eBay, and even today, it continues similarly. But this is about to change now. 

With smartphones, mapped Geo-locations, and NFC, the online and offline worlds converge. The Payments industry is moving beyond plastic and is fast embracing digital currency. Smartphones have fundamentally changed how consumers interact with mobile technology. This new centricity is profoundly changing the customer experience. 

This shift and the increasing convergence of Banking, technology, and information create customer value and new business models. However, this is just an inflection point; the significance of this shift in Mobile Payments and Digital Money will be more apparent with rapid consumer adoption. 

Click to enlarge

Why should a customer be interested? 

Because Google has created a new kind of incentive for people to use -Google Wallet. The new system will be compatible with Google Offers, a Groupon-style deal program, credit cards, and store loyalty cards. If you are following the Local and Deal Commerce (aka Groupon, Living Social, etc.) space, you will understand the potential and customer interest.
Over time, consumers can save each of these offers directly to their Google Wallet. That means consumers will get the benefit of carrying their offers with them at all times. 

"Unique because combining Offers, Loyalty, and Payments in an Open Platform."

However, even with strong tailwinds to support the adoption, there are some challenges to overcome: 

• What about Non-Android phones? If Google Wallet is an open platform, it needs to be cross-platform. How does Google plan to integrate into the larger ecosystem? 
• Dependency on Mastercard PayPass terminals: Google Wallet only connects to MasterCard PayPass terminals. There are more than 135,000 of those in U.S. stores and restaurants, but that's only a small fraction of the total number. 
• What about Mobile Carriers other than SPRINT?; especially when other carriers plan their own Mobile Wallets. AT&T, Verizon Wireless, and T-Mobile USA have formed their consortium to create a wallet- ISIS, that will compete with Google's.
• Competition from other Payments and Card Companies: Visa has also launched a similar initiative, read the blog announcement. It plans to launch a digital wallet product in the U.S. and Canada later this year and already offers a mobile payment program at retailers around the world. Visa has agreements in place with Bank of America, Chase, U.S. Bank, and Wells Fargo for mobile payments. 

Benefits to Retailers: 

With the integration of coupons or offers into Google Wallet, Retailers can target customers by providing discounts directly within search ads to check-in offers to offers in Google Places  (Think Ad-sense, FourSquare, GrouponNow, and Facebook Places, etc.).

The integration of offers into Google Wallet will enable merchants to close the loop by directly connecting their online and mobile advertising with offline purchases. Also, Google Wallet provides merchants with targeted foot traffic and a way to engage with customers in-store, thus enhancing the customer experience. Check this video: 

So what else happened in the Payments space this week? 

Earlier this week, Square, the company founded by Twitter creator Jack Dorsey announced its mobile payment plans. On Monday, Dorsey showed Square’s way of replacing wallets and cash registers without using NFC. 

Using this Square App, instead of NFC, users order and pay with an iPhone application, which stores their credit card information. At checkout, buyers give their names to the cashier, who will need to use an iPad as a register to complete the transaction. This App just might render the cash register and POS terminal useless, but that calls for a separate post some other time.

Also, there are two other stories worth following:
Why is Paypal suing Google Executives?  And Who will win at Mobile Payments, Google, or Square?

Please leave your comments and share your views. I look forward to reading them.

Google Advisor : Making financial products comparison easy

Financial decisions are some of the most difficult decisions we face. Be it, finding the right credit card and mortgage or finding the right insurance product for our family. Due to information asymmetries, it becomes increasingly difficult to find the right product or option. While consumers now have instant access to more details than ever before, this has also made it much harder to find exactly what they want. 

With this in mind, today, Google has rolled out a fantastic tool for consumers. Google Advisor is a comparison tool which allows users to get information on financial products. It enables you to compare offer options for your credit cards, checking and savings accounts, CDs or mortgage. With Google Advisor, the search company has entered the consumer finance comparison space. Currently, the service is only available in the United States and it is a matter of time before we see an international launch.

Is it still a logo ? if it changes everyday

I asked a simple question to some of my friends in Branding,Marketing,and Advertisement -" Why is a company Logo important?and if it changes everyday-Is it still a logo?.

I was frowned upon at first and then in a very kotleresque manner was doused with marketing gyan; some obvious answers..

• A good and unique logo is the first step to achieve brand recognition;
• It shows what the company is about and it attracts people and is a good marketing tool to market the product;
• A companies advertising and promotional efforts should be centered around brand image. A logo represents that image without saying anything. Its an extension of the brand and should merit its qualities; etc

Well I don't' disagree with the marketing and traditional views, but was wondering :-" Do we place too much importance on a Logo?". Google is a company that changes its logo almost everyday, and still is one of the most popular brands.

My quest led me to an interesting old post by Doug Edwards -director of consumer marketing and brand management for Google 1999-2005.

I will be happy to hear from readers what they think about this.....

The Future of Internet Search

Today on the Official Google Blog, Marisa Meyer posted an in-depth look at what the future of Internet searches holds. She shares many interesting thoughts.. She asks a lot of important and interesting questions on the direction of search and how searches will be performed in the coming years.

The most interesting ones she touches on are the "location" and "social" values that can be attached to search.

To search for ‘pizza’ or ‘water hole’, location plays a key role. So if Google knows where you are –it will help deliver relevant results.The social aspect is also worth noting. How do we cull the collective information of our friends -- or simply those around us -- to find the information we need.

Here are some of her thoughts:

Search needs to be more mobile -- it should be available and easy to use in cell phones and in cars and on handheld, wearable devices that we don't even have yet……..

Google's "70-20-10" Formula

According to CEO Eric Schmidt, 70 percent of their resources are channeled to the core business of internet search and advertising, and 20 percent is channeled to adjacent products such as desktop and product search services. The remaining 10 percent is focused on highly experimental products - innovations important for the long term.

Liisa Välikangas, Managing Director of the Woodside Institute, wrote an interesting piece called The golden spur: Innovation independence. In it, she reveals some surprising facts about the importance of personal independence in the innovation process.

For instance Google's independence formula is particularly revealing: the company has a management philosophy that requires it to dedicate 10% of its investment to employee- initiated projects unrelated to the core business.

It is observed that the importance of efficiency and reliability in business has stifled our freedom to explore new things. The author argues that the “freedom to explore” factor is essential to innovation. And innovation is essential to sustained competitiveness. Today's leadership challenge is learning to manage the independent thinkers who refuse the constraints of professionalism and instead innovate on their own terms – in other words, as amateurs.

This freedom is facilitated by communications technologies that enable individuals to participate increasingly on their own terms. Companies need to unleash their human talent and raise their level of innovation so that they can compete globally. To accomplish this, managers must respect their employees' independence – the very source of innovation. Liisa further states that the case for innovation is the case for the labor of love, that is, the work of passionate amateurs.

Innovation Redux

Google's Marissa Mayer gave an interesting presentation at Stanford University.
Here is a snapshot of her presentation : (This holds good for any company, society etc be it FMCG , Financial Services, Hi tech, education etc)
Notions of Innovation redux :