Google Wallet

What do you know about Google Wallet?

It's coupons, payments, and loyalty cards on your phone. It includes a "Google Offers" search engine to find new offers. It's currently in a testing phase and there's very limited availability, but it seems like a cool technology. You'd think Google has it all thought out because they've hired talented people; I'll show you a few opportunities they've missed to make a lot of money.

Lets evaluate how this makes money for Google and retailers, ignoring the other players for the sake of a more concise article.

It's a given that Google will roll this out on its Droids. It's a strong selling point for them. You get a cool phone and the ability to leave your wallet at home. Google makes its revenue from advertising and this will be a platform to target individuals; better, more effective advertising means more revenue for Google. 

They want to draw every retailer in, make their wallet ubiquitous in our lives. I don't know the specifics but, because they want many participants, it's not a bad assumption that they'll give retailers the option to analyze the data they generate for free; charging only if a retailer wants Google to do the analytics. Keep that last point in mind, I will use it to tell you how they can improve their service.

Retailers will save money because they will need to print less coupons and ads. Individuals can be targeted so you would expect the react better to ads; more revenue. Their outlet will appear on the Offers search engine, well targeted, and that should draw in even more customers. People that come into the store will almost always carry their "loyalty card" so data might be tracked more robustly. Compare that to the status quo. Do you carry your 15 loyalty cards with you at all times?.

That's Google Wallet. How can we innov8 on that?

The wallet limits itself to short distances. Google is not an expert on hardware or transmitters, but they just bought Motorola. A technology called RFID could be used in conjunction with what they've created, resulting in several synergies. It won't drain your battery either because RFID chips consume very little power.

What would be the benefits?

For Retailers:

• Track what percentage of time a customer spends on every area of a store; someone who spends a lot of time in an isle is looking for value or having a conversation
• Track if a customer responded to an ad or offer, even if they didn't make a purchase - it's an indicator that the ad was somewhat effective
• Urge service representatives to help clients that seems to be looking for something but can't find it
• An in-store solution that shows targeted purchase suggestions and offers just by standing nearby

For Google:

• Collecting more data than retailers can handle is an opportunity to sell an analytics service
• Target ads even more effectively; a person spent 20 minutes in the cereal section and selected the cheapest one, next time you can offer them an ad with the cheapest options; a person always spends 20 minutes in the videogame section of a store but never buys anything, push him over the edge with an offer

There are other possibilities with this but, Google must continue making many experiments with their wallet before rolling it out everywhere. There are several potential pitfalls:

• Too exclusive. Will retailers adopt and promote a technology that reaches <70% of the market? The tech could be licensed or given to other phone platforms. If it's "free", Google gets ad revenue and market penetration.
• Too shy. Another solution called ISIS is already out there. It's small, but companies in this segment have been known for explosive growth. 
• Too scary. Some partners might be afraid of giving Google too much power, it already controls the internet.
• Safety. Security is a main concern here and failing in this dimension will slow adoption to a crawl.
• Too personal. What would you think if your Wallet offered a gym subscription after you bought a larger size of pants? Would it freak you out if store employees call you by your name without ever meeting you?
• Too costly. What will it cost each player to get into this game? What parts of the technology will Google "gift", subsidize, sell at cost, and sell for profit?

I decided to start my blog with this technology because it's current, interesting, and has massive revenue potential. What are your thoughts?