Sidekicks galore

The origin of the word sidekick comes from old pickpocket slang in London from the 19th century. The kick was the nickname for the front part of the trousers and grabbing someone’s wallet from the side pocket on the front was considered a tough task. Hence the side-kick was the gentleman’s safest bet.

In recent times, it seems like most startups , specially those in the hyperlocal and food space, have decided that their sidekick is the digital wallet. Most companies are spending huge amounts of money, through discounts, freebies , cashback and other initiatives to get people to register on their digital wallets and store money. While I understand the logic behind converting people to their own wallet (greater control over transactions, ability to track usage and transaction flow , money earning interest) , I feel that that many brands are making a mistake by spending an effort on their own wallet.

Currently we have a couple of major players in the digital wallet space(PayTM, Mobikwik, PayU, Airtel Money) and we can also consider Ola Money and Flipkart’s former initiative. It makes sense for newer players to either tie up with one of them(PayTM/Mobikwik/Ola Money) or ask a Visa / Mastercard to provide an alternative. Managing a wallet comes with it’s own set of hassles and regulations and the net gains from getting some players on your wallet is lost by the effort put in.More importantly at some stage, we are going to reach the same point faced by credit card companies some years back. As more and more brands and companies started issuing their own loyalty cards, people were worried about which cards to keep and which to give up. Thus at the end of the day, only a few top loyalty/credit cards were retained while a large number were used once or twice and then given up.

From a customer standpoint, there are 3 problems –

a) People are going to only stick with a wallet as long as they are getting cashback/discounts/ benefits. Once the wallet is no longer able to provide those, they may give it up or if it becomes the major player they will keep using it when necessary

b) People are going to wonder what is going to happen with their money if they are not using a wallet or if the brand discontinues the wallet. Will the money be returned directly to the account or will it be given in form of credits or lost?

c) While digital /mobile wallets do make it easier for the customer, why will a shop owner pay the credit card company/payment gateway and the wallet company for a transaction? Thus overtime, the customer will see lesser traction from outlets and vendors which defeats the idea of a cashless economy

While I am not against the concept of a cashless economy and support digital wallets, I think the time is apt for banking institutions to create a consortium which will provide a single wallet standard. Banks can create apps/ methods for using the wallet standard while ensuring interoperability. If the banks provide the product, it can be an additional payment mechanism for vendors so they do not end up getting hit twice while customers need not have to share data with multiple parties.

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Adios, Kinect

The announcement that it’s not mandatory to purchase the Xbox One with the Kinect sensor is probably yet another blow to Microsoft’s aspirations but it’s also a sad end to a device which could have brought about a change not just in gaming but many other applications. Much before Google Glass became popular, Kinect was trying to follow people around their living rooms. Kinect is yet another of the Microsoft ideas which seems to have died a natural death after much effort(anyone remember┬áZune, Tablet PC and MSN Sportswatch ?)

It’s a pity because Kinect hacks seem to have brought about some very interesting applications. People have come up with ways for them to use finger movements as instructions, to develop robots which can do advanced tasks, and even monitor a person’s pulse. The key is to see if Microsoft decides to use the learnings from the Kinect project in other fields, be it bringing additional features to their Phone operating systems or enabling more features in next editions of Windows which may move from a touch based operation system to a gesture based operating system, like those shown in Minority report

In the meantime, it might also make sense for other companies to learn from the Kinect debacle. The Kinect was a product which served as an accessory but never grew a loyal enough following to make it worthy of being an individual product by itself. Forcing customers to purchase it just pushed away many customers. But if it had been priced in a better fashion(as Dan Ariely has explained) , it might have been sold as a value for money combination. ┬áSo the key for Microsoft was not just providing a better customer experience but also making them feel there was value in it. The pricing was initially much higher and was brought down only after they lost many customers to Sony. As my old marketing professor would say, You mess up even one of the four P’s and you will piss it all away.

Hardware solutions to Payment security

So today Yes Bank has announced a partnership with Taisys for a Wafer SIM which you can attach to your regular SIM for making mobile payments. The brilliance of this concept is that it addresses two fundamental problems – a) irregular data services in parts of India b) security for transactions. Even more importantly, this might be the first salvo in the fight from hardware players who want to change the security paradigm when it comes to banking and payment solutions in India.

Indian payment solutions , be they banks or private players, face the same problem of balancing ease of use versus security of payments and data. Hardware solutions can be customised further to be banking provider independent or can be integrated into the next generation of smartphones so that we can choose and select our payment methods

At the same time, from a security perspective , we need to improve the software side of security authentication. For far too long, we have relied on OTPs and PIN numbers while we actually need to move to a smoother method of authentication. This could be through two paths – a) greater data collection from customer which brings up privacy issues and b) alternative authentication methods which reduces customer ease

People have suggested using biometric authentication such as Iris scans/ fingerprint scans and algorithms which will track how you type. Biometric authentication still requires much improvement and doesnt work on clouded irises/ cracked fingers. What we need is banks to go for methodologies which allow them to test the customer’s knowledge of previous transactions- for example, a cafe where he/she regularly has lunch at or a takeaway place where they last ordered pizzas from. Using data they already have from previous transactions, payment providers can help customers navigate security hurdles.

However some customers may feel that this intrudes on their privacy and that banks are abusing their trust. In such a scenario, payment providers can consider a partnership with social media platforms such as Facebook/ Google for a photo based identification where people are asked to identify friends/ family members from images which would serve as an authentication protocol.

That said, we can see that payment providers may have to merge both approaches(software and hardware) to come up with a comprehensive solution which can help users both while they are in urban regions and in places where connectivity is poor but transaction security is still important

Fevicol Ka Jod

In the urge to go “mobile”, many firms in India seem to have forgotten that it’s very easy to get people to download an app, through emoluments or aggressive marketing but very tough to retain them and increase the time spent by customer . Mobile applications do provide the brand with a stickier experience but retaining customers and encouraging them to spend more time requires a comprehensive strategy with a clear focus on UI/UX which is sadly missing in many brands

If I were to compare three categories – online retail , home delivery and travel, I would say only Travel apps seem to have cracked the UI/UX puzzle in India. They are user friendly, provide a simple guide for usage and make it easy for returning to use the app. While driving increased transactions , even if at a lower ticket size, Ola and Uber are both killing it. That said, TaxiFor Sure did come up with some usual innovations such as multiple destinations that could be saved and a better Wallet system but the acquisition seems to have killed their app innovation cycle. Uber could do well to copy some of the TFS innovations,if not their technical systems which always seemed much better than Ola’s and Uber’s.

Online Retail such as Flipkart/ Myntra suffer from the discount mania. The offers may drive people to download the app but I doubt if people will return considering that it is far more difficult to compare products on a mobile application as opposed to a website. A mobile app may make One click purchasing much simpler (assuming the credit card details are stored) but in India one click purchasing is still an unknown commodity and with recent delivery fiascos and purchase rollbacks, it may be a mistake for ecommerce companies and firms to go all in with a mobile app

Home Delivery apps are horrible. I checked out all of them and was disappointed universally. To the extent that the news that Zomato is coming up with an online delivery mechanism gives me hope. Home Delivery apps need to really focus on presenting the information better and focusing more on better products than providing lots of offers to drive traction.

It is important all mobile app companies are clear on these points of their mobile strategy –

1. Not driving traction through offers as much as through addressing a clear pain point which wasnt accessible through website/ online channels. For example Ola/Uber providing point to point transport options

2. Driving value for vendors and other stakeholders by providing more data and info on customer profile while enabling higher transparency for customers . This helps customers get clarity on what they are paying for and why a premium can be charged (like surge pricing in Ola/Uber)

3. Focusing on a consistent UI/UX strategy while differentiating oneself from others. No Hamburger menus . Focus on simplifying the whole process so even a 60 year old can use it. Ideally the litmus test should be handing over the app to the mobile developer’s parents/ elders to see if they can use it easily

Spamming us to Death

In the last two weeks, I have seen daily front page ads for myriad e-commerce firms, starting from the Big bullies like Amazon and Flipkart to smaller players like Craftsvilla . All these ads proclaim big discounts and scream about sales. Apart from regular sales, e-commerce players and now Mobile wallet companies blast offers through emailers, messages and other channels. As if this is not enough, some companies even force you to download their app when you are trying to visit their website.

Most Indian companies, e-commerce or otherwise have a poor understanding of digital marketing. They reapply the old print and TV marketing techniques of sustained marketing blasts and maximum eyeballs to drive sales, forgetting that these sales last only till the next player spends even more money or the discounts dry up. Worse, over time, the customer gets inured to the nature of these discounts and only reacts when the discounts are significantly larger. In the middle of all this, the brand loses hard earned equity as people concentrate more on discounts and choose to purchase products depending on the discount available.

If one were to measure the effectiveness of these promotions in terms of driving sales, we would probably see a definite correlation. However one needs to ask – is this customer sticky? What enables him to stick to an e-commerce platform or brand knowing that tomorrow another rival brand can offer him a better discount ? Is the cost of acquisition(in terms of discount offered + promotional cost ) valid considering the lifetime value of the customer cannot be calculated accurately?

Equally importantly, one needs to measure the brand impact. With concurrent discounts, app based sales and flash sales, e-commerce firms have created a false expectation in the mind of customers which will last until the VC funds last. Once the discounts vanish, the customer may well retaliate by switching / opting for offline retail outlets. Building a brand identity over time , even if initially costlier might have helped e-commerce firms slowly gain customers.

Traditional media is losing eyeballs and moving to the digital world. It’s high time marketers understood that in this modern world, it’s not sustained spamming and media blasts but quality content which works best. Equally important for a brand is to be innovative and not just reactive. Although Oreo abroad and Amul, in India have a good reactive campaign, its taken them decades of research and work to create a clear brand image. It behooves brands to work on creating their own space online and not blindly copy the existing trends.

Spaces where there exist great scope for marketing and customer engagement include travel, healthcare and education. However Indian brands need to realise branding and marketing isnt just social media and specifically media blasts but also judicious use of channels and innovative content strategy.

One wonders how marketers will survive when email finally vanishes. How will they cope with the loss of traditional digital marketing channels. It’s time for marketers to come up with alternative solutions. After all, this is the age of Slack, Whatsapp and Uber.

Green Cars

Ford has just jumped onto the Tesla bandwagon by opening up it’s patents for all companies to use. I don’t think a Mahindra could follow suit, considering all the money they have invested and someone like a Toyota would be skeptical of such an initiative.

The important question, however, is not whether the patents are free but whether electric cars are truly good for the environment. Currently , electric cars are more a hobby horse of the truly rich and not something for the Aam Aadmi. There remains much for improvement in terms of mileage, reliability and durability. That said, they do provide a useful alternative to existing fossil fuel cars.

However, we ignore a key factor while lauding the lack of pollution from the electric car industry. Though the electric cars themselves may not pollute, we fail to account for the pollution created while generating the electricity for these cars. In India, summer months are taxing for the power network as Air Conditioning and Fridge usage rises. Add to that, usage of electricity for charging Electric cars and the strain on the network may rise manyfold. Indian electric plants generate power through burning fossil fuels/ oil. We have not tapped into natural resources or nuclear energy to an extent where they can replace fossil fuel plants.

In such a scenario, not only are we raising the cost of power , thus making electric cars even more unviable for the ordinary customer but we are also polluting our atmosphere more by burning the very fossil fuels we wish to avoid using in our cars.

The key is for the Government to come up with a clear strategy and policy for electric car manufacturers. Not only are they to provide alternative sources of power generation to ease the load on regular power networks , but also a clear direction for car manufacturers to look in other alternatives such as new fuels or mechanisms to reduce vehicular traffic and consolidate into public transport. This would also help improve productivity and standard of living for the general masses.

Facebook Messenger’s Evolution

In previous posts, I have discussed how Whatsapp is part of Facebook’s plans to expand their social media presence. At the same time, an important monetization aspect remains marketing to the correct audience and Facebook has been struggling with this in recent times, what with reduced usage and migration of the younger audience to platforms such as Twitter/ Snapchat.

At such a time, Facebook has brought in new elements in Messenger which is aimed at helping brands engage the audience. This also includes messaging from the app which allows people to communicate from the app and the corresponding message will feature the app as well. This adds 2 elements – firstly the brand is able to ensure that the branding is not affected by the transfer from their app. Secondly The app is able to reach a larger audience of non users by motivating existing users to share information with their friends through the Facebook Messenger app.

For Facebook there are immediate benefits – greater involvement from new apps and developers whom they might be interested in acquiring at a later stage. But the most important benefit is that it rekindles the social relevance of Facebook. Over time, Facebook has been losing users and traction among existing users. Many people log into Facebook but time spent on the website has been going down while number of posts or images shared has also been reduced. This has a direct impact on the marketing revenues of Facebook. By enabling sharing through messenger, Facebook reactivates many dormant users while increasing their share of wallet of the marketing budget

The key to see is how quickly developers swarm onto this ecosystem and what other players such as Twitter do to oppose this. Twitter already has credit card and purchase through tweet systems coming in place and over time,they are definitely looking at providing brands with a channel not just for engagement but for closing the loop as well. It’s key that Facebook work on making Messenger not just a branding tool but also a method for completing the transaction. Ideally, partnerships with payment channels or acquisition of a payment startup may help them in this regard.