January 20, 2015
Commerce: The Unexpected Use Case For Apple Watch
Over the last few weeks I have spent quite a bit of time presenting the road map for Apple Pay to dozens of startups, legacy companies and VCs. It may come as a surprise to many that large established companies have become aware of and are enchanted by the infrastructure that is being built around Apple Pay. Gone is the walled garden of the closed wallet schemes some payment startups tried to impose on merchants. Apple wisely chose to have open standards (NFC, Bluetooth) and future open APIs. Astute payment startups free from false ego and legacy agendas are also beginning to see clearly that Apple Pay has far more capabilities than they thought.
The infrastructure Apple has created is built upon secure payments. This foundation will be the fertile ground for innovation. The very next layers are already in place: Passbook, IBeacons, Lock Screen notifications, micro location and AirDrop.
Apple Watch will be on the leading edge of this new adventure. Watch is in a unique position, on your body during waking hours, to become the center point of needs and desires. Needs and desires are what drive us as humans. Needs and desires is what commerce is all about.
Apple has created a haptic (vibration) system they call Taptic. On the surface of your skin, just below the watch, there are millions of receptors. These receptors, like all others, report to the brain. This feature is far more important than it may seem.
In the early 1900s a gentlemen by the name of Ivan Pavlov conducted a series of famous tests based on feedback and conditioning. He found touch to be a strong component of a feedback loop. His work also extended to the darker side, showing an animal can be motivated or tortured to change brain states based on a simple signal.
Greater Commerce Utility Through Simplification
Needs and desires along with Pavlov conditioning tied to this new device we currently call a watch is one reason why I am sure Apple Watch will become the foundation of what I am calling Watch Commerce. The shift is subtle yet markedly different from the commerce conducted on other devices. The very limitation of the screen size and other interface constraints will create greater utility through simplification.
I have maintained since 2012 that Apple's entry into payments will create the largest startup opportunity since the creation of the App Store. Over the last few weeks I have helped envision the many ways Watch Commerce will emerge. I have identified at least 87 unique commerce use cases centered around or made more useful by Apple Watch. Here is one example:
Strolling back to work from a meeting you glance at your Apple Watch and make note of your budget.
A few minutes later your receive a Taptic vibration on your wrist notifying you that you are near your favorite independent coffee house, Café Du Nord and they are offering your regular Latte at 15% discount if you take a detour on the way back to work. You give in to desire in perhaps a Pavlovian way. You order and pay while still in the street. You just as well could have come in and had a few minutes of fun banter with the Baristas and paid using NFC based Apple Pay.
The detour is timed with a real-time feedback loop controlled by the coffee house POS and production area which is intelligent with sensors that track each step. You can choose to stray for a few minutes and pick up a magazine across the street.
The moment your Latte is ready you will receive a lock-screen notification that it is ready for you to pick up. You smile because you have had an experience in just five minutes that would never have been possible before your Apple Watch.
Watch Commerce At Retail Store Changes Everything
This entire experience could take place today, using smartphones and the rather amazing work of two very stealth payment startups with POS ideas firmly based in empirical praxis. Yet the experience is made far richer and far deeper on Apple Watch. When dealing with desires, I assert that this form of commerce will become irresistible. Yes, some of it is Pavlovian but most of it is the close relationship Taptics brings to the already personal and perhaps intimate relationship a watch represents to most people.
This is just one example of how Watch Commerce in the real world will change the very nature of how we buy things. There are many more. Most of the very interesting ones will be in the world of retail where astute companies and astute merchants will build grand p0rtals into new retail sales environments you and I will find irresistible.
We Will Someday Feel Naked Without Our Watch Commerce
Many of us can not visualize the need for this new world of commerce, much as we could not see the need for the commerce we now transact with our smartphones. None the less, all of us have begun to shift a tremendous amount of commerce to these devices. I have absolutely no doubts that we, all of us will shift some of this commerce to these new watches. Once this shift cements, many of us will feel naked without our watches and the Watch Commerce it brings.