IT’S NOW OFFICIAL: Apple will support NFC Technology (Near Field Communications) on the new iPhone 6. Finally.
What does this imply in term of Mobile Marketing, for brands, retailers, marketers… and consumers?
We asked Simon Ternoir, mobile technology expert – and fan of everything Apple. He is working as Chief Technology Officer at the startup Unitag, an all-in-one mobile marketing platform focused on NFC and QR Code management, which counts over 1 million users worldwide and customers such as Sephora, Volvo, Spotify, or L’Oréal.
Simon, could you please first briefly remind us what NFC is and how it works?
NFC stands for Near Field Communications. In a nutshell, it is a short range communication technology based on wireless frequencies (RFID), which automatically triggers specific actions (opening a website, sharing contact information, make a call or a payment), as soon as a compatible mobile device comes close to an NFC tag or NFC terminal. NFC can also be used in a two-way communication mode, e.g. to enable file transfers between two NFC-enabled phones.
For marketers, the beauty of NFC is the frictionless experience it creates: users do not need to open an app or flash a code to get access to information. All that’s needed for content to instantly appear on the mobile screen is a single tap from their phone, when they are in range.
For example, passing by a poster ad or display embedded with an NFC chip can immediately send a product video to my NFC-enabled phone, entice me to download an app or unlock an exclusive offer for my next purchase (still waiting for confirmation tonight for Apple’s NFC).
This sounds great. So why NFC hasn’t taken off yet?
NFC isn’t new, it has been around for years. Since 2011, the number of smartphones with NFC capabilities has increased about +300% and continues to grow. Still, NFC can’t be seen so far as a mainstream technology, for two main reasons in my opinion.
First, NFC was originally meant to enable mobile payment. It got a lot of attention since it was presented as the technology behind the Android-based Google Mobile Wallet. However, the stakes in the mobile payment market are very high, with many big players involved that want all a slice of market shares: bank and finance businesses, telco providers, smartphone manufacturers, media networks, Google, etc. This power race prevented the deployment of NFC, yet promising, with the emergence of various isolated NFC payment solutions as a results of different strategic alliances.
And, of course, a big roadblock has been Apple reluctance to integrate NFC technology so far. This has caused an overall inertia, the market appearing to be awaiting for Apple’s decision to see whether or not the technology is worth investing in.
Therefore, merchants were slow to adopt the technology at point-of-sales. And as few stores accept NFC, brands weren’t capable to really leverage NFC for marketing. Which resulted in the relatively low consumer awareness and use of NFC. Today’s launch will drastically change all this!
So why Apple did take so long to enter the NFC market – and why now?
There have been a lot of assumptions in the last few years. Some said NFC failed to convince Apple for payment due to too high safety risks. Others believed integrating NFC chip in every iPhone was too costly in Apple’s manufacturing process, etc. The fact is, Apple apparently just prefers to come later. They adopted a waiting strategy, to see what first happenned in the sector until the technology’s potential was “audit-proofed” and worth the try.
And today, they estimated that now was the right time to “go NFC”, for both the new iPhone 6 and the coming iWatch. Indeed, with consumers having already been “educated” about this new technology (mostly by Apple’s own competitors Samsung and Google!), and with great brands’ and retailers’ initiatives like Starbucks and its 15% customers paying with their phone being successful, this waiting strategy could have been the right one.
Why now? Apple launches “Apple Pay”, a tap-to-pay option to simplify physical purchase via mobile device (or iWatch). They are rolling out NFC payment to their own Apple stores and has already partnered with major payment networks, banks and retailers (incl. Mastercard, Visa, AmEx, Sephora, Wallgreen’s, McDonalds, Target, etc.) to boost the launch of its new mobile wallet.
Payment activities will be easy to implement within the Apple ecosystem, along with iTunes 800 million stored credit cards, an extra security feature via “tokenization” to prevent fraud and in conjunction with the existing Passbook Wallet. This will be a real game-changer in the mobile payment industry so far, initiating fast retailers and user adoption.
So beware, the dream of a “wallet-free” life might be now not so far away than we think!
Beyond payment and mCommerce, let’s see if Apple also plan to use the convenience and simplicity of NFC to facilitate connection between Apple devices. The timing is definitely right, considering the coming area of wearables and connected things.
Now including the 70 to 80 million users expected for iPhone 6, NFC is about to take a new turn in term of reach and applications. This will definitely provide marketers with a whole new playing field for innovations in the near future!
What do you think Apple NFC launch will mean for marketers? Should they consider now to finally invest in NFC?
Now that Apple entered the game, the future of NFC marketing looks extremely bright. Apple’s adoption of NFC is expected to finally give the mobile technology the respect it deserves. We expect it to be a huge trigger point for retailers to start investing in NFC infrastructure and accepting NFC payments. We will probably hear more stories like the recent McDonald globally rolling out NFC in the coming weeks!
So I would encourage every marketer to be prepared to integrate NFC in the months to come. Beyond Mobile Payment, no doubt Apple will soon open its new NFC ecosystem to marketing applications for iPhone users.
Whether to drive sales, traffic, engagement, retention or brand awareness, NFC technology offers endless applications for innovative marketing campaigns. It is is so far the fastest and most seamless mobile tool available, allowing brands to instantly connect with prospects and customers and converge on/offline media. Combined with the ability to track campaigns “on-the-fly” with real-time analytics, NFC empower marketers to take their marketing strategy to a next level with massive consumer insights.
I see in NFC a lots of advantages for both retailers and advertisers.
- It’s simple and immediate. Based simply on proximity for hassle-free user experience.
- It’s very versatile. Whatever the industry or marketing objectives, NFC can be used to trigger any types of actions and transactions: redeem a coupon or a ticket, add points to my loyalty card, find next store, connect on social media, open a link, watch a video, instant call or message, etc.
So we are waiting for Apple to set the frame for future NFC Marketing applications. It will be then up to marketers to unleash the full potential of NFC for successful campaigns, by using the technology the right way. As always in Mobile Marketing, don’t forget to include context when addressing your customers, offer them relevant content and create great experience!
One last question. Which impact do you see for the future of mobile technologies? Now that it is available for iPhone users, will NFC technology take over QR Code, iBeacon or other mobile communication technologies?
One new mobile technology not necessarily replaces the other. In my opinion, existing technologies have each their purposes, their advantages and limits. And each can have a place in brands’ marketing strategy. The proof is that Apple, which relied on iBeacon so far, decides today to launch NFC!
While NFC has the proximity and simplicity of use on its side, QR Codes are extremely cost-effective and scalable for mass media communication. As for iBeacon, it harnesses the power of geo-targeting with micro-location combined with push notification.
All these channels can be quite complementary within the same campaign. And while we should expect more creative initiatives in the foreseeable future, we can already see some highly-successful marketing campaigns using mobile technologies in tandem for effective multi-channel engagement.