Any time I can spend with Gary Schwartz talking about mobile payments and commerce and how retailers need to start embracing this quickly is an education. Now he’s gone and written a book to make sure this message gets out.
Listen to the audio version now: [audio: http://blip.tv/file/get/Untether-TheImpulseEconomy394.mp3]
Rob Woodbridge: I’m sitting with Gary Schwartz, you’re CEO of Impact Mobile and author of The Impulse Economy, and I’m going to actually hold it up here like this, The Impulse Economy, how’s that? Gary welcome, thanks for coming on.
Gary Schwartz: Hey, thank you for having me.
Rob Woodbridge: A long time coming, I remember when we talked about this a long time ago about the — not the struggles, but the joy we’ll say of writing a book.
Gary Schwartz: No, you know, the struggles, struggles, they were there — two years of airport writing, meeting with folk coast to coast, struggles but good struggles. To understand anything when you’re in the middle of the battle and you’re really down in the trenches, it’s a challenge because it’s hard to know who’s winning, you know.
Rob Woodbridge: It is, especially you know, you’re talking to guys, they’re building as the industry is developing, so who knows what directions it’s going to go in.
Gary Schwartz: Listen, the industry doesn’t know which direction it’s going. And everybody’s grasping for straws and trying to read the tea leaves to mix metaphors, but that’s what makes it really exciting. I think what happens when you write a book over a two year period, is you start cutting up the edges and you start to realize that you develop a really good core. And that core is really sound because you’ve spent two years cutting off the edges. And of course things change like as we put this to print, you know, there have been just a whole flurry of announcements, and they will continue to flurry. I think the thing to understand is that the philosophy, the engagement with the consumer doesn’t change. And so the understanding and the need to have frictionless engagement, the understanding and the need to reinvent the store intelligently, the angst of the storekeeper, the needs of the shopper, those things don’t change.
Rob Woodridge: No. And they never will, right? It’s just a different medium for them to worry about.
Gary Schwartz: Absolutely.
Rob Woodridge: So go over the book, give us a brief overview of exactly what’s in The Impulse Economy?
Gary Schwartz: Well it’s called The Impulse Economy because it’s about the impulse consumer. The impulse consumer predated mobile. We are intrinsically impulse consumers. What’s happened is a lot of the things that we put into the mall, into the store, have interrupted purchase, you know, there have been whims of the storekeeper, somewhat contrived from a consumer perspective. What’s happening is we’re getting back to our native shopping behavior which is the ability to do things on the fly from our couch, from the street, from the car, from the mall. And now we’re bringing that impulse ability to shop within a shop and that’s an impulse engagement but not a pleasant impulse engagement from the storekeeper’s perspective. So it’s about that whole reengagement with the shopper and understanding how to as a storekeeper or as a service provider to hit the right note with that consumer, understand how to use the phone to effectively drive purchase.
Rob Woodbridge: But that’s the key, right, is that to drive purchase?
Gary Schwartz: It is, it is, it is all about driving ‘ ka ching’. And so it’s nice to have all the fluff of a campaign and brand awareness and all the things that we love, but if it aint driving sales. It’s not going to be … it’s not going to be a front and center focus for anybody the next year.
Rob Woodbridge: Well you talked about that core and my guess is the core as you were chipping away, the core is a philosophy isn’t it, or is it a methodology around this?
Gary Schwartz: You know, I mean there is obviously a methodology that sort of evolved. When you start looking at the industry and when you look at the way that the mobile marketing has evolved and mobile marketing was very focused on campaign engagement and doing things that were really cool and getting into the magazine as the cool brand. And what it’s evolved into is an indispensible channel and brands that really know where the future is with their consumer have understood that they need to now use that channel. So the philosophy is really on in the world which has cross channel disconnect as its central layer of angst. What are the things, the toolkits that you can use to engage with that consumer, follow that consumer and drive sale? And it doesn’t matter if it’s in the store, in the cloud or in their home, whether it’s in the car or at the dwell at elevator and it’s that central philosophy right across all your the media touch points across all your retail touch points, that has to be ground in continually. And that’s what the book’s about.
Rob Woodbridge: 100%, and what was surprising about this was that the — is it the adoption rate that you’re seeing now? Or is it the fact that it’s so influx that this industry doesn’t really have a border, it doesn’t have… it’s a morphis isn’t it?
Gary Schwartz: Well you know what, the biggest problem with mobile is mobile. It’s the biggest problem with mobile is everybody talks about mobile and it’s not about mobile, it’s about understanding how to engage the new shopper. And if you fixate on the technology, if you fixate on the device, you’re never going to be able to to integrate it into your business as usual core focus. It’s always going to be a bell and a whistle. What brands, retailers, what anybody out there needs to understand is it’s about ROI, it’s about understanding how to drive your objectives with sales and if that’s your focus and then you say, “Oh, you know what, mobile or you know, a cloud based integration with a portable screen or whatever, you know, can sell that product. That is the realization a lot of brands have to go through otherwise they continue to build campaigns, they continue to rely on bells and whistles. So sometimes it’s the dumb solutions that are the most exciting. And do you know why they’re most exciting? It’s because they generate revenue and revenue is exciting. So sometimes it’s SMS and mobile web, not you know, high end integrations, very costly integrations with POS, with apps, with things that sound fun but just on driving the tonnage and engagement and reach and frequency the brands the need.
Rob Woodbridge: So where are, I mean what’s driving revenue now for these guys? Is it that, is it the low level stuff that we’re looking beyond right now, that’s making money?
Gary Schwartz: You know what, what is driving revenue is when you can connect the channels effectively, when you can drive … when you can make sure that between this touch point and that touch point, there’s no dropoff, to make sure that the conversation that started online continues with me and not a competitor into store, into my media, back into my CRM platorm, if you can connect the dots, you will always be able to win. The problem is, is that there’s a lot of focus on, what do I do in the store and what do I do in my catalogue and then what do I do online? And it’s in between, it’s the cracks … it’s between the cracks the consumer falls.
Rob Woodbridge: Yeah. I love that, I mean I look at mobile as a gap filler, right, and it’s not an elegant way of putting it.
Gary Schwartz: Yeah, well I mean it’s gap filler or maybe it’s a bridge and it’s the ability to…
Rob Woodbridge: That’s an elegant way of putting it.
Gary Schwartz: Well you know, sometimes I also call bridges gap fillers.
Rob Woodbridge: Exactly.
Gary Schwartz: But you know, it allows you to get from one place to another more effectively. And then what it’s doing, is resuscitating your existing legacy infrastructure and that’s what’s exciting, my gosh, it’s like, “Oh my gosh, my store would be reinvented because I understood how to move somebody from my media into store and into the cloud”, that is very sexy for a retailer because that’s where they need to focus. Mobile is just a means to that end.
Rob Woodbridge: Yeah. Well what’s the big picture for that, I mean is mobile about driving, it has to be about driving new revenue, not just moving revenue from one bucket to another, it has to be new revenue?
Gary Schwartz: No, absolutely, it has to be new revenue and it has to … it has to be new revenue or it has to make sure that I’m driving incremental revenue to my existing touch points. So if I can drive — if I can make sure there are fewer banner shopping carts in the cloud, if I can make sure that there is a less abandoned intent to buy, and I can make sure that that idea actually was executed into my store or the idea in the store wasn’t lost into the Amazon cloud, then I’m a winner. And mobile can do that for you.
Rob Woodbridge: I have to ask, I mean next 12, 18 months, what is getting you excited about? I mean I’m loathe to ask this question because you’re excited about it today, but is there anything that you see that’s coming that you say, “God, I can’t wait for that to arrive?”
Gary Schwartz: You know what, I’m very much a here and now guy and I’m very excited about the future, I’m excited to see what hand Apple plays in the next year. But I know, we know from the IP, you know, tea leaves, that they are totally focused on NFC, that they have patents [inaudible] ties that to iTunes that they now launch in Easypay as a trial in their stores with scanning which is going to die and it’s going to move to much more mature NFC integration. That will be exciting because once the aspirational brand comes in with a strategy, the mobile will validate. And do you know, other things that are exciting, you know, I think the goal is to always look at the future and see where things are going but to be excited by the here and now because if it’s all about the future there is no learning in the present. If you don’t do learning in the present when you get to the future you’ve got nothing. And so things like, simple things that retailers can do like take their existing snail mail email which is … I consider email the snail mail of the phone, right?
Rob Woodbridge: Right.
Gary Schwartz: And make sure that you’re creating a messaging channel to the phone through SMS, that is a simple exercise that you can do now that allows you to drive – and stats will hear me out on this – five x to ten x conversion of your email. That in and of itself should stop everybody in their tracks and to focus on that because if you have engagement with the consumer, if you can understand how to talk to that consumer in a targeted way on messaging then when the wallet comes down the road, when some amazing mobile evolution is in a not too distant future you’re ready for it. You have a relationship with the consumer, you understand how they work on the phone, you’ve tied your retail touch points together fluidly through mobile web and messaging and you’re ready for the next big thing.
Rob Woodbridge: Gary, I wish we could talk forever. Thank you so much for bringing in the book, it’s The Impulse Economy, go check it out. Gary, congratulations.
Gary Schwartz: Thank you so much. Cheers. [silence] [silence] [silence]
In 2010, Gary was elected as the Chair of MEF North America (www.m-e-f.org) with a remit to develop mobile commerce best practices and advance commerce security and privacy (for which he received a MEF award for industry excellence). In 2011, in partnership with MEF and a number of industry groups including the X9.org security standards body, Gary is working to develop m-commerce security and privacy guidelines.
Gary it the recipient of the Asia and Japan Foundation Fellowship as well as the Macromedia People Choice Award and Dodge Foundation award for innovation. Gary is the author of the book The Impulse Economy.