Pay-By-Touch: Fingerprint Scanning Technology and its Effects on Mobile Marketing and Online Retailers
“If you’re not open to new products, you’re missing out.”
-Larry Wilson, VP of Customer Relations, NCA
Online retailers have become masters at helping customers find exactly what they are looking for. Gone are the days where purchasing a television or newspaper advertisement to promote a new product were the only promotional material needed to launch a successful item. Today, internet giants such as Amazon help companies to zero in on specific target markets for particular products through the use innovative marketing and advertising technique. Amazon allows merchants to bid on keywords that customer might search for, and then generates product listings based on how relevancy and the amount bid on a particular keyword by a company selling a product. Merchants selling through the online retailer can also purchase banner advertisements to display multiple products along the top of the webpage, as well as advertisements generated based on user interest and if a potential customer has browsed similar products recently. Almost all major online retailers set up product marketing similarly. These types of innovative marketing strategies work effectively when a consumer is making online purchases on a desktop, however they start to fall short on mobile.
Increasing mobile use is something we know for a fact isn’t going away anytime soon. According to Smart Insights, over 50% of online searches are made on mobile. Companies such as Facebook depend heavily on mobile users as a source of continues ad revenue, with 91% of yearly ad revenue being from mobile. Other companies however, such as Amazon and similar large online retailers, do not see nearly the same level of revenue generated from mobile users. In fact, cart abandonment is as high as 80% when it comes to shoppers using their phone or tablet to make purchases. This is credited to a smaller screen making it harder to type in all of the necessary shipping and payment information into a retailer’s app or mobile site. Frustrated, shoppers decide to wait until they have computer access to order a something online.
When fingerprint scanning technology was first brought to mobile in 2007 on the Toshiba G500, people though it was a neat feature that didn’t really add much value to the overall product. After all, what is the use of unlocking your phone with your fingerprint when a simple passcode works just as efficiently? Several other fingerprint scanner cell phones hit the markets in the following years, but it wasn’t until 2015 with the release of Apple’s iPhone 5S and its Touch ID software that people really began to utilize the feature effectively. When it was first launched, Touch ID could be used to unlock a consumers iPhone and also to authenticate purchases on the iTunes Store. In 2013 however it was expanded to allow users to make purchases using Apple Pay. The subsequent models of the iPhone have all included an every improving fingerprint scanning technology, and a multitude of Android phones have also begun to include this as well.
The introduction of using fingerprints to pay for online purchases has done wonders to promote turnover from those shopping online. Because purchasers no longer have to enter lengthy shipping and billing information, Touch ID, Apple Pay, and all other fingerprint scanning software for use in mobile ecommerce promote impulse buying among consumers. In fact, while the traditional method of typing in all of ones’ information during checkout on a keyboard takes on average 103 seconds, using a fingerprint to authorize a purchase during checkout takes approximately 17 seconds. This encourages customers to purchase an item immediately instead of waiting until the reach a desktop computer.
While customers being able to check out almost immediately on while on mobile, even when using a new device for the first time, is great in regards to discourage cart abandonment, it creates a headache for companies trying to advertise their products to potential customers. One of the aspects of Amazon that makes it so successful is that users go there with one thing in mind: to buy something. Amazon has been able to target that intent in a way that promotes visitors to browse several products when looking for the specific one they intend to buy. With pay-by-fingerprint allowing customers to purchase a product with just the tap of their finger, marketers fear that consumers will spend less time viewing product listings and favor instead a more streamlined buying experience.
There are currently several problems that fingerprint scanning technology on phones face. For one, people with disfigured or scarred fingertips often have problems using the technology, even with simple tasks such as unlocking their phones. Even though their “fingerprints” are still unique, current technology is designed to recognize the traditional, healthy image of a fingerprint. In addition to this is the safety concerns surrounding the use of fingerprint scanning. It is possible to make silicon copies of someone’s fingerprints, and it is also possible to force someone to put their fingerprint on a mobile device for malicious purposes. Therefore, updating current recognition technology is a must before this technology can truly be incorporated into an average person’s daily use. Consumers are always looking for ways in which technology can make their lives easier, and with an estimated 550 million people owning fingerprint scanning phones by the end of 2017, online retailers in particular can expect a huge surge in customers looking to capitalize on this intuitive feature.
Again, it cannot be overstated just how much increasing smartphone adoption will play a role in both how consumers buy products online, and how these products will be marketed to them in the first place. With over 50% of Asian citizens owning a smartphone at the end of 2015, online retailers are aware of the ever growing need to successfully reach consumers on mobile platforms. Pay-by-fingerprint is one innovation that retailers hope will spur consumers to use their mobile devices for a substantial number of their future purposes.
Currently, the only information stored to an individual’s Touch ID is credit card information and their identity, used to unlock their device and authorize purchases. In theory though, so much more information could be linked to an individual’s fingerprints, and can even be stored on a phone’s operating system as an encrypted security measure. Such information can include address, clothing sizes, color preferences, clothing style preferences, video game account credentials and login information, friends list and flowers — the list is endless. Any information about a phone’s owner that is input into the phone at any point can be recorded to a person’s “fingerprint identity”, and used by retailers to target their marketing effectively.
Targeting specific markets is most useful when applied across different platforms, whether it’s on a laptop, phone, television, or video game console. This gives companies the widest reach in terms of the amount of potential customers they can reach. Fingerprint scanning technology can be incorporated into many existing technologies that are common in everyday life, and this provides a unique opportunity for marketers. Take for example a video game console with a fingerprint scanner built into the controller itself. Gamers would no longer need to go through the process of arduously entering all of their payment and billing information into their console manually. Instead, with a quick swipe of the thumb, they would be able to make in-game purchases with ease.
Although targeting specific markets with traditional advertising has proven effective in the past, ad agencies are always looking for a new way to reach customers. Finding a balance of quality, frequency, and quantity of ads has always been a struggle, even more so today as consumers are bombarded with advertisements from when they wake up to when they go to sleep at night. People quickly grow tired of seeing the same advertisements shoved in their faces every day, so marketing agencies are looking for ways in which to advertise products in a less intrusive manner. One way to accomplish this is to encourage consumers to personally share their shopping experiences and purchases with friends through mobile messaging apps.
Marketing through messaging has several unique advantages over traditional marketing techniques. First and foremost, it is seen as non-intrusive, because it is someone you know personally advising you to buy something. The key to this however is creating an experience that the customer feels is worth sharing. Retailers would also have to make the option to share their shopping experience easy to do so. Pay-by-fingerprint plays into this in a big way, because again it plays upon peoples’ inclination at impulse buying. Being able to purchase a product someone recommends to you with the tap of a finger would greatly increase the amount of consumers who actually purchase a product after being recommended to them by a friend. Over 1 billion people use the popular messaging app WhatsApp, with Facebook Messenger having nearly as many. With billions of messages being sent every single day through these messaging apps, many on phones that currently support pay-by-fingerprint, it would seem wise for marketers to focus on how to get customers to share their shopping experiences with friends, and subsequently to have their friends buy the same product in an intuitive, instant manner.
Fingerprint scanning technology and the changes it will make in the way products are marketed are not limited to mobile devices, or even devices within one’s own home. The creation of third party payment services, such as PayPal or Venmo, would allow consumers to potentially save their payment information to their fingerprints to be used in conventional retail stores. Users could set up an account on one of these third party services, enter their billing and payment information a single time, and register it to their fingerprint. Instead of carrying around a wallet full of cash and credit cards that could be stolen or lost, customers could simply walk into a store and swipe your thumb as a form of payment, essentially eliminating the need to carry around physical credit or debit cards. In addition to this, any payments made would be recorded to their account, so the third party payment service would have a full record of who bought what particular products at what times. This information is useful to advertisers attempting to curate their content to a specific target market.
It is easy to imagine a world where fingerprint scanning technology is integrated across multiple devices, services, and platforms. Surprisingly enough, it may not be the online retailers who benefit most from this wide spread adoption, but instead third party payment services that incorporate pay-by-fingerprint. These services, similar in the structure and operations of current companies such as PayPal, would allow users to make one account through which they make all online or in person fingerprint purchases. Such an approach would entice consumers to utilize the fingerprint scanning features on their phone as it would offer a simple and convenient way in which they can purchase products. Online retail giants such as Amazon may even partner with these payment services, or even help in their development as we have seen Amazon do with many of its services. With Amazon constantly looking for ways to increase their customer base on mobile, fingerprint scanning as a payment method would help them and other online retailers to take advantage of consumers’ tendency to impulse buy products they do not actually need.
Customers would be able to use pay-by-fingerprint at a moment’s notice, and while taking part in a multitude of activities. Say for example an individual is playing a video game on a home console like the Xbox One. They may be playing a racing game online with friends when they are notified that there are new racetracks available for purchase as an expansion pack to the original game. Instead of exiting their game, entering their credit card information, and generally upsetting their current gaming experience, they could merely swipe their thumb along a small fingerprint scanner built into their controller to instantly pay for and download the expansion pack. Not only would their payment information, including credit or debit card numbers, be immediately entered into the gaming console to save them the time and effort of entering it themselves, the payment would also be authorized by the individual’s fingerprint, adding another level of security to the process.
Similarly, pay-by-fingerprint could also be utilized in conventional retail stores as a means to streamline checkout, and also to track consumers’ purchases and buying habits. One such company that could benefit from this new technology is Walmart. If each register was equipped with fingerprint scanning technology, customers would be able to ring up their purchases and merely tap their finger to pay for everything. Walmart would be able to see all past purchases, what stores they were made at, and when they were made, and then synch up this data to an account based around your fingerprint. Store would be able to track your purchases across different locations, and in turn learn your buying habits. This information would be extremely useful to not only individual companies such as Walmart, but also for marketing agencies and large online retailers. If this kind of information was all save on to an individual’s fingerprint, then anytime they make a purchase more information could be added. Again like Walmart, marketing agencies and large online retailers such as Amazon would be able to track consumer buying habits more efficiently, and build upon their current advertising techniques to target individuals with the highest buying potential for a particular product.
As mentioned before, there are several hurdles that must be overcome in order for pay-by-fingerprint to become widely integrated in retail. There is a fear that fingerprints could be reproduced using artificial methods, and used to steal someone’s identity. To combat this type of fraud, fingerprint scanners will have to be technologically capable of determining several different factors with which they identify an individual, including pulse rate, body heat, and amount of perspiration. When the technology becomes capable of measuring these and these and other such similar variables, it will help to prevent one from producing someone else’s fingerprints through artificial means, such as 3D printing.
Of course, there is no guarantee that this technology will catch on and be incorporated for use across multiple devices and in retail. Other forms of identification, such as facial recognition, are currently be tested as a means of mobile security and credit card authorization. Although similar in intent to pay-by-fingerprint, facial recognition differs greatly in functionality and practicality, and is also not developed enough to be as secure as a method as fingerprint scanning. Also, unless companies such as Amazon run promotional campaigns to promote the use of pay-by-fingerprint and the benefits it would provide for its consumers, many people may be reluctant to adopt the new technology, or even ignorant of it all together. Many people are wary of the security concerns that currently surround the use of fingerprint scanning as a payment method, and unless the technology is greatly improved upon those concerns are unlikely to disappear. However, with innovation and technological advancement at an all-time high, it is definitely worthwhile for retailers, marketers, and ad agencies to pursue the use of pay-by-fingerprint, and explore the many pros and cons of such a technology until it is perfected or another, better technology comes along to take its place.
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