10 Bold Predictions for the Year Ahead

With the holidays over it is time to turn attention back to the work and the year ahead.

2014 closed with the full-fledged arrival of mobile payments through Apple Pay and mobile and mobile payments look to have significant impacts in the year to come; read on for what else we see in store.

What's in Your (Mobile) Wallet?

There will be an arms race among banks to be the default card on Apple Pay. In truth, this has already started. It is noteworthy how early this fight has been taken up, given the relatively small number of merchants currently supporting Apple Pay. This reveals how high the stakes are—being card number two might not count for much in the future—and the confidence banks have that Apple Pay will succeed.

Clash of the Titans, Part 1

Speaking of arms races, CurrentC, the merchant-led mobile payment solution, will try hard to launch its mobile payments fast enough and with enough critical mass to outflank Apple Pay. What will make this race especially interesting is watching to see if CurrentC merchant solidarity can outlast consumer preference. In the meantime, Apple Pay’s success developing the marketplace will allow Google Wallet to quietly carve out a nice spot in the payments industry.

Clash of the Titans, Part 2

As the current industry heavyweights Expedia, Priceline, Orbitz and others slug it out for Online Travel Agency (OTA) dominance, Google and Amazon will enter the fray and massively disrupt the industry. Together, they will push margins way down (possibly through an agency commission model) and unlock the value of their respective assets, which include massive war chests, huge customer bases, deep customer insights and the fact they are, well, the industry’s number one and number five internet destinations. This could make Apple Pay vs. CurrentC look like a fair fight.

Context is King

With the explosion in use of mobile payments, marketers will increasingly turn to apps, beacons, push notifications and other ways to reach consumers in a quick, low-cost and timely manner. We should be careful what we wish for. Brands must be relevant or risk being deleted. Knowing that a customer is driving near your store, has a reward certificate and looked at TVs on your website within the last two weeks provides the kind of context necessary for communications to succeed. Poor contextual understanding is increasingly risky.

CMOs Get Bold and Savvy and Worry Less About Tenure

CMOs’ tech budgets may be surpassing those of their IT counterparts but they are still chasing consumers who, with mobile as the primary connection point, increasingly wield all the power. Bold brands start to re-org (or even de-org) to take advantage of this new normal. Smart CMOs will increasingly look to partners best positioned to help them successfully engage with empowered customers. The integrated brand, loyalty, mobile and even media agencies who can do this will win, but they must think much more broadly.

Decalration of Independents

Boutique hotels increasingly go mainstream (R.I.P. Kimpton), and highlight how local authenticity is elusive and just does not mix well with giant hotel groups. They are survived by true independents whose scarcity is perhaps their biggest asset. Economy hotels enjoy their moment in the sun, showcasing the solid value of broad distribution, low prices and free breakfast and Wi-Fi. Welcome back, Days Inn.

One Door Closes and Another One Opens

As social media becomes increasingly private and Millennials become harder and harder to reach on their terms, leading-edge brands do something really cool and authentic in their own right: become more and more transparent. This honesty goes a lot further and is a lot easier than trying to engineer a viral YouTube video with what, increasingly, is paid media. If McDonald’s is brave enough to show us what’s really in the McRib, what do we have to hide?

The Coming Disintermediation 

In a lot of ways this is the Airbnb or Uber effect, with smart companies trying to become the main gateway between us and what we want. Amazon will increasingly be the place we go to buy clothes, computers, watches and just about everything else we can buy at the mall. Food and grocery delivery will become increasingly commonplace and be handled by a number of upstarts such as Instacart, sort of an Uber for groceries, and companies like GrubHub or DiningIn.com. And Netflix or streaming services like Dish’s new Sling TV—not cable—could become the main conduit to the entertainment we seek. Logistics and fulfillment are commoditized.

QSR Food Fight

Given the great success of Starbucks’ app and loyalty program, it should not surprise us that Wendy’s, Taco Bell and Chick-Fil-A are all launching their own versions. While this rationale is hard to fault, consumers don’t really want an all-app menu; we want to pay with Apple Pay or Google Wallet, and we want these services to automatically apply that QSR BOGO coupon and redeem loyalty points, based on our preferences, before we actually pay. Whoever figures this out best—if not fastest—gains a decided leg up. Given the critical importance of throughput speed, geo-targeted offers and so on, the QSR industry will be a bellwether of how mobile apps, mobile payments, coupons and loyalty programs are to come together in the future.

Loyalty Points Become a Real Currency

If you missed the bitcoin revolution (and hey, try buying a latte with one), this one is for you: As the mobile payment, offer and loyalty stream is figured out, part of the solution to make things more elegant will be to enable consumers to monetize their loyalty points, stash this cash in a stored value card within their mobile payments solution, and use it for full or partial payment. Points.com should do this, but Apple Pay is more likely to do it successfully, pocketing a small fortune in the process.

If you would like to discuss any of our predictions in more detail, or our loyalty and CRM offerings, please contact Margaret Murphy at MMurphy@olson.com, and we would be happy to give you more information.