For several years, pundits and analysts have breathlessly heralded the coming age of the cellular phone as all-in-one personal information center and payment device, a replacement for the wallet — one that not only makes phone calls but keeps track of appointments and contact lists and takes the place of debit and credit cards.
Makes phone calls? Check. Appointments and contact lists? Check. Replaces debit and credit cards? Well, this one has been a bit slower in coming.
As with most in-store technology, this is another area where Japan leads the pack. J. Gerry Purdy, Ph.D., vice president and chief analyst of Frost & Sullivan, said the first real use of the cell phone as payment device took place in Japan in 2001.
"NTT DoCoMo (Japan's largest cellular operator) set up a number of vending machines with a data line connection to the back of the machines," he said. "Then, they put code numbers on the items in the vending machines. The user sent a short code with something like 'buy' and the network sent a signal to the vending machine to dispense the product."
Today, companies continue to explore ways to get customers to interact with in-store systems. The emphasis seems to have shifted from product payment to call-to-action and brand delivery.
"This is a solid business tool," said Monte Zweben, chairman of SeeSaw Networks, an out-of-home digital signage network with more than 10,000 venues in its portfolio.
"Until recently, a call-to-action on any kind of sign had to be a phone number, e-mail or Web address. But unfortunately, people are unlikely to engage in a time-consuming conversation or remember a URL when on the move. Text messaging, on the other hand, is quick and easy and becoming commonplace," he said.
There's no question about the commonplace nature of texting. Research firm M:Metrics reported that 39.2 percent of cell phone users in the U.S. regularly send text messages. The Mobile Marketing Association puts the number even higher, saying 69 percent use text messaging regularly and 44 percent use it daily.
In April, SeeSaw announced that it had added built-in functionality to its digital signage network to allow clients to deliver interactive campaigns targeted at cell phones. Customers send a text message to a number shown on-screen and receive some sort of perk in return — an "m-coupon," perhaps, or access to exclusive content.
Software developer C-nario recently unveiled its Engager product, which allows the creation of interactive campaigns built around highly developed logic. For instance, a retailer could run a contest by showing a series of questions that the customer answers with his cell phone. If he gets enough of them correct, an m-coupon is automatically delivered to the phone. That coupon can display on the phone's screen an actual barcode that can be scanned at check-out.
Frank Olea, whose company Olea Exhibits/Displays Inc. recently built cellular-enabled kiosks for Sears and H&R Block, said the adoption of cellular interactivity could be just as beneficial for retailers and deployers as for the public.
"Using my cell phone to buy tickets, pay bills, wire money, receive coupons and other transactions will enable the deployer of kiosks to do it on a much more cost-effective basis, because they'll eliminate expensive items like cash-handling equipment," he said.
And if "American Idol" is any indication — the show received 64 million text-message votes during its fifth season — customers already are comfortable with the idea of using their phones to make things happen.
"It's happening today," said SeeSaw's Zweben. "People download ring tones, promotions, songs and videos regularly in response to advertising across all media."
This article originally published in Self-Service World magazine, Aug 2007.