One of the most common questions I’ve been getting at conferences and panels lately is around NFC and “is it a bubble” or where is it headed?  I thought it might be good to note some quick thoughts on the topic.

The last few years many large players in banking, technology and related industries have worked hard to push NFC related technologies to control the wallet.   The theory has been if you can control the wallet, you gain strategic advantages and marketing insights into the customer that are very valuable and can be leveraged across a much larger business.      This has resulted in the strategic groups at many entities engaging in a ferocious battle with carrier partnerships, talent raids/wars and other initiatives to try and push these efforts to gain the lead in the payments marketplace.

Those efforts are interesting, but what’s the value proposition for shoppers?

The problem with NFC is while the strategic benefit of “winning” is clear for large players in banking, technology and even the carriers, the value proposition to consumers  is not.  How does NFC actually make the shopping experience better?   This isn’t a developing country where no credit card system exists and you have to bring a pile of cash to check out at the hotel, you can pay a credit card and it’s great.

With NFC- how are you making the shopping experience better beyond what we have now with the credit card?  Is the credit card really broken? What’s the value proposition for consumers? What about for retailers?

People have charged ahead without answering these questions and as a result we have penetration rates on mobile phones in the single digits, and more alarmingly the same penetration rates at the retail point of sale (so even if phones catch up, not enough retailers support it yet).

This doesn’t mean NFC is dead- it just means the answers around payments will probably come from new players not yet in the game.  One candidate not often discussed—the retailers.  These retailers need to challenge their old business models and think of how they can actually improve the shopping experience using technology.   Restoring a sense of fun and wonder when I walk in the store using these portable computers in the hand could dramatically impact a retail business looking to “turn the tide”.   No question even if this innovation doesn’t come from the retailers, you are going to need to find ways that the value proposition works for them, not just the consumer.  What could the shopping experience look like in the next 5 years in terms of not just payment, but product and deal discovery?

We think the way you shop in 3-5 years will be completely different and at ShopSavy we are working to make this happen a little bit every day.   We know it’s a challenging time times for our retail partners but we believe it represents an opportunity for leaders in retail to really lead the charge and jump ahead of the competition (including Amazon) using technology.   Over the coming year we expect to introduce many of these technologies at ShopSavvy with our strategic partners—we can’t wait to help create the future of shopping.

This week several of the Android blogs wrote about ShopSavvy Wallet and some asked if it was smart for us to go head-to-head with Google and their wallet. Many reporters have asked me, “Which is better?” My usual response is to ask them a question in response, “Which is better a credit card or a pocketbook?” Google Wallet is like a credit card – ShopSavvy Wallet is like a pocketbook. Both are handy, but they serve very different purposes. Let me try to explain.

ShopSavvy Wallet was designed to make it easy to buy products from within ShopSavvy. Lets say you are standing in Sears. You scan the barcode of a 3D TV you want to purchase, but ShopSavvy shows you that Walmart has the same TV for a LOT less. If your ShopSavvy Wallet is setup you can tap the blue pricetag button and purchase the product without having to visit Walmart’s website. ShopSavvy does everything for you – entering your name, email, phone number, shipping and billing address as well as your credit card information. With one swipe of your finger you have saved LOTS of time and hassle.

Today our wallet will allow you to store any credit or debit card like Visa, Mastercard and Amex. In the future you will be able to store other payment types – you will even be able to use your Google Wallet.

Now let me explain what ShopSavvy Wallet is not – in the simplest terms it is not actually a wallet in the sense Google Wallet is actually a financial wallet. Google’s wallet is powered by Citibank – thus it is not just storing payment information – it is the actual financial instrument. ShopSavvy never charges your credit card – we let the merchants charge your card. Google is in the middle of the transaction charging your card (in most cases they are the card). We aren’t involved in the transaction at all. Google is intimately involved. We don’t get a cut of the merchant fees. We don’t get the processing fees. Google does. Google Wallet really is a REAL monetary device. ShopSavvy is just holding data to make it easier for you to buy stuff.

Check out this short video if you want to see how it works:

Yesterday I shared some usage stats for our new Wallet feature. If you are one of the many users of our Wallet feature you are well aware that you could ‘tap to buy’ or ‘slide to pay’ from a limited number of retailers like Buy.com, Barnes & Noble and Target. To make our wallet really appealing we need to add a BUNCH of other retailers. I am pleased to announce that today we are adding a number of new retailers including:

• Walmart
• Half.com
• Overstock.com
• eCampus.com
• Ace Hardware
• Toys ‘R’ Us
• Glyde.com
• Dick’s Sporting Goods
• Radio Shack
• Sports Authority
• GoHastings.com
• GNC
• Modell’s
• ESPN Shop
• NBA Store
• NHL Store
• PBS Store
• iBuyOfficeSupply.com

These new retailers are now live. We are rolling them out with limited access to their inventory to start, but as we prove they are stable we will expand their coverage to include their full catalogs. This brings our total to 39 retailers available in our wallet. Our goal is to add 30 more before the end of the month (adding about 2 per day).

We officially launched our wallet feature in ShopSavvy 5.0 on November 21st, 2011, but unofficially we released the feature on September 19th. The first non-employee user created their wallet and immediately bought an item for $30.90 from Buy.com.

For those of you who haven’t heard about our wallet here is a quick explanation: The wallet feature allows consumers to convert their local purchases to online purchases without leaving the application to visit an online retailer’s website. Simple, fast, low inertia purchasing from any retailer. I thought it was time to share some of the stats since launch:

Q. Which retailers are affected the most by offline to online conversion enabled by ShopSavvy Wallet?

A. 1. Barnes & Noble* ~ 13%

2. Target ~ 6%

3. OfficeMax ~ 3%

4. Macy’s  ~ 1%

5. Walmart ~ 1%

* While B&N saw a LOT of offline to online purchase conversion, the majority of their conversion was to B&N.com (their web property).

** No other retailer saw 1% or more conversion, i.e. very long tail.

Q. Who uses ShopSavvy Wallet more, men or women?

A. 71% of ShopSavvy Wallet users are men, while 50% of ShopSavvy users (generally) are women.

Q. Who uses ShopSavvy Wallet more, iOS or Android users?

A. Surprisingly iOS users are 10X more likely to create and use a Wallet than Android users. Android users report much higher levels of fear and lower levels of trust than iOS users.

Q. How old are ShopSavvy Wallet users?

A. Almost half of ShopSavvy Wallet users are between 26 and 36 (48%).

Q. How many ShopSavy Wallet purchases were made in retail stores?

A. 87% of purchases were made by users located in retail stores.

Q. How much did the average ShopSavvy Wallet user save by converting to online from the local store they were standing in?

A. 32% on average.

Q. What is the average price of products purchased by ShopSavvy Wallet users?

A. $38.42

Q. What is the average shipping costs of items purchased by ShopSavvy Wallet users?

A. $4.95

Q. What is the cheapest price for products purchased by ShopSavvy Wallet users?

A. Several books sold for .01 each including The Millionaire Next Door, Pokemon Ultimate Handbook, God Still Don’t Like Ugly.

Q. What were the most expensive products purchased by ShopSavvy Wallet users?

A. Apple Thunderbolt Display ($889), iPhone 4S ($819) and Alesis DM10 Studio Drum Kit ($799).

Q. What percentage of products purchases were new versus used?

A. 72% of products purchased were new.

Q. Which credit card did users use in their ShopSavvy Wallet?

A. 56% Visa, 25% Mastercard, 15% Amex, 4% Other

Q. What did users buy with their ShopSavvy Wallet?

A. 32% Consumer Electronics, 19% Books, 11% Office Supplies, 8% Movies, 8% Video Games.

Q. How many wallets have been created to date?

A. While ShopSavvy Wallet was in beta (between September 19^th and November  21^st) we were adding approximately 2500 wallets each week. The growth rate has increased, but we are not publicly releasing this data at this time.

Image via CrunchBase

The recent move by Amazon to offer $5 for retail shoppers to buy online felt like kicking a man twice when he was already down to a lot of retailers.  Many merchants were already concerned about being used as a glorified showroom for Amazon’s Jeff Bezos before this recent move with speculation that many were missing their numbers because of Amazons mobile price check application.

Here at ShopSavvy we love local merchants.   Our users want to know what all their options are both online and local presented in a neutral and unbiased way— not just merchants in Amazon’s marketplace.  They want this presented without favoritism so they can make good buying decisions about product selection and where to buy.  Buying from Amazon is great and for many habitual, but did you know in our system they are the lowest priced choice only 7% of the time? If you buy from Amazon, you are not always getting the best deal and they certainly don’t work to get you local options.

Even when the price is lower online, our users often want to see what their local options are, either for immediate gratification or because they love the relationship they have with their local retailer.  In the long run we believe a balanced ecosystem of strong local retail with efficient online options is healthiest and this is what we strive for.

So while local stores have had a really brutal few years, this is going to change in the next few years as they get new opportunities to fight back.  In fact, we think current shopping experience for local retail is going to be transformed significantly in the next 3-5 years.   The mini computers people are carrying in their hands now are just using things like reviews, purchasing and price comparison as an early beachhead.  In a few years the way you shop locally will be completely different.

Why? Whole new conversations will be starting between brands, retailers and shoppers will transform retail and the shopping experience making it more connected (with friends/family), informed and enjoyable.  This will dramatically improve the local shopping experience and give local merchants new ways to offer value relative to online options that may not be readily apparent now.

Consumers are open to new sorts of conversations with retailers that are not happening now.  For example, currently most conversations between retailers and consumers now are what I call “One to Many”.  If you offer a sale, it’s often to large groups of people and there is very little segmentation or targeting.   With these new technologies based on loyalty data, buying patterns, and strategies such as competitive couponing, consumers will start to have one to one conversations with retailers.

The last decade or so has not been a great one for local retailers, but  the tide is changing with advances in technology.  Ironically, the technology that is causing pain for local retailers now, will offer new opportunities in the future.  For the those retailers that embrace this change, and get ahead of the curve, we believe it’s a competitive opportunity to recapture some lost ground and create a better shopping experience for shoppers.  This takes courage not to stick your head in the sand while Amazon steals your lunch.

To that end, if you are a local retailer that is looking to find ways to start new conversations with consumers in your stores—reach out to us –we’re listening and open to new ideas to help local merchants.  Amazon doesn’t have the last word here, this is just the beginning of what technology can bring to local.

Ryan Kim from GigOm has the scoop in a post title, “ShopSavvy brings instant scan and buy to mobile shoppers.” The big news in ShopSavvy 5 (available both on iOS and Android) is our new wallet feature. We have built adapters that allow for ‘one tap’ purchasing from online retailers like Barnes & Noble and Buy.com. Think Amazon one-click for any retailer on mobile – i.e. one-tap.

We have built adapters for 49 retailers to date and we expect to bring on two to three retailers each week until 2012. Bigger retailers currently live are: Barnes & Noble, Buy.com, Toys ‘R Us, Babies ‘R Us, Radio Shack, Dick’s Sporting Goods, Sports Authority, Ace Hardware. Coming soon: Target and Walmart.

Here is an overview of ShopSavvy from me:

Finally, there is also an unannounced ‘beta feature’ in ShopSavvy 5. We aren’t going to publicize it until after Christmas, but power users should be pretty excited when they find it.

In the last week we have seen two interesting developments with the ShopSavvy Wallet. First, our users seem to be buying a LOT more non-taxed items. Second, and more impressive, is the average purchase value increase. Last week our average purchase was approximately $25. This week our average increased to over $63 per wallet transaction Finally, Buy.com is now our most popular retailer this week.

It is hard to believe, but have been working on ShopSavvy for three years. Back in July of 2008 ShopSavvy won Google’s Android Developer Challenge and the rest has been history. Today our users on Android and iOS will be happy to learn that ShopSavvy 4.5 is available for download (Android) (iOS).

iOS users in Florida have been un-knowingly beta-testing our latest feature: ShopSavvy Wallet (skip the website to buy from within the phone). In essence we have created a secure wallet inside of ShopSavvy that allows a user to store his or her credit card and ship to information inside of their phone. When the user finds a great deal they simply ‘slide to pay’ and ShopSavvy does the rest. This new feature attempts to remove as much inertia from the buying process as possible. Here is a short video demonstrating the feature:

We will be officially launching this new feature in a week or two (if all goes well). The 4.5 update also fixes a number of bugs and improves performance of the app during scanning, product display and list filtering.

What is cool about Amazon? 1-Click purchases. What is not cool about Amazon? Their prices are often higher than other retailers (in ShopSavvy they are only the best price 6% of the time). What if you could scan a product with ShopSavvy and find the best prices from online and local retailers (Amazon included) and buy the product with 1-Tap inside of the app? That is what we call quick pay and it is now live for iOS users in Florida.

With the second version of quick pay you can skip the website and buy from any retailer from inside of ShopSavvy. Want to give it a try? Remember this is a VERY limited version of the feature. Here are the details/limits:

- Limited Retailers: Barnes & Noble and Buy.com
- Limited Users: Florida and iOS Only
- Early Version: Super-Beta (the official release version fixes a number of issues)

The process is fairly simple. The first time you use quick pay you can add your credit card info as well as shipping information and from then on you can buy with 1-Tap. By removing all of the inertia we hope that quick pay will make saving money even easier. I have been buying books and office supplies with quick pay for the last few weeks and it works great.

If you live in Florida and what to try it out, just start scanning books and/or consumer electronics and you should see an option to buy with quick pay. Let us know what you think. Everybody else? We should have everything ready to launch nationwide on the 29th (Apple might take a few days to accept the app, but Android will be available immediately).