Each day I've been making educated guesses about what panels to attend at SXSWi, like a strenuous game of tic-tac-toe. That's because any given SXSW-prime hour (9:30 a.m., 11 a.m., 3:30 p.m. and 5 p.m.) has dozens of relevant panels for me to choose from. Over the past couple of days I've enjoyed talks on "digital" and its relation to the economy, politics and redefining the relationship between the consumer and brands.
Seth Priebatsch, "Chief Ninja" at SCVNGR (pictured below) presented on a particularly interesting topic: Interchange Zero. His idea behind the future of payments is using game mechanics (sunken reward, progressive and appointment dynamics) to drive mobile wallet usage. The basic premise is that if laws are in place that encourage competition, e.g. Durbin Amendment, interchange fees will decrease, allowing for merchants, processors, etc. to serve their customers in different ways other than just processing payments.
That's where gaming and rewards from gaming come into play. Everything from "sunken rewards" (giving discounts for users that visit a store) to building loyalty through that initial relationship, and then providing the user with products, and services that are tailored to them. The model assumes that the money that would have gone to interchange fees (roughly $50 billion, according to Priebatsch) will be reinvested in different ways into the economy. This model doesn't include credit and other offerings that a payments services companies provide, which are still fee-based. What this model does do is say that financial services companies, and merchants, need to think about building a valuable connection with customers beyond payments so that the user is loyal to them beyond the purchase. By offering relevant products and services to customers on an ad-hoc basis (thanks to knowledge from big data), both merchants and financial services companies will continue to thrive while making customers value them more.
Interchange Zero is driven by adoption of digital forms of payments, allowing the consumers to require more choice and therefore raising the need for competition among processors, and merchants, and ultimately driving processing fees to zero. Another area that depends on the use of digital to change the status quo is politics. Al Gore and Sean Parker presented in front of a packed house (pictured below) on how digital has the power to disrupt what Gore described as a "broken democracy."
Parker admitted that just because there are large numbers of people online with digital personas, it doesn't mean that they'll do anything other than "build farms" (zing-Zynga). He explained that passive participation in the political process through low effort online petitions is not the same as getting people who are connected online to meet offline and protest, for example. Gore addressed the hall to request that "we #occupydemocracy." This call to action was meant to deter "armchair activism" and help organize digital-literate folks to take a personal stake in creating political change. Gore and Parker also seeded their projects, including Causes.com, as potential starting points to achieve those goals.
In each of the cases above, digital is meant to empower users to create economic and political change. As marketers it's important to note that as consumers become digitally enabled and demand additional value from brands and organizations across the board due to the access to information consumers possess (e.g. being able to check product facts, compare pricing and share that information) the more strategic we need to be as professionals in order to strike the right balance in our relationship with them. We must survey what they think about the brands we service, and leverage that to begin to anticipate where they're headed in terms use of technology, needs, and opinions in order to frame our strategies to ultimately help shape their actions through information and influence we can provide (when possible).