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By Sondra Sneed
Using a mobile phone for financial transactions or as an advertising medium might be difficult to wrap one’s head around. Like the early years of the Internet, we mostly associate the mobile phone with ad-free communication. As we’ve seen on the web however, e-commerce prevailed and we’re now accustomed to “Ads by Google” and flash interstitials.
For sometime the wireless industry has buzzed about the various ways that the mobile will be used in location-based advertising and as a transaction medium for banking. Yet these concepts are met with resistance because matters of personal security and privacy tend to dominate the American psyche more than tech-savvy convenience.
Two budding attorneys from suburban Houston, Texas, could help change that. They are spinning a modern twist on the gift card market and giving retailers another way to attach themselves to their customers’ lives.
Before the entrepreneurs knew each other, David Park and Sameer Mandke had already lived-out short careers after the dot com bust in 2001. Park was in IT at Pricewaterhouse and Mandke was working in the credit card security division at MBNA. Park took his unemployment as an opportunity to travel throughout Japan and Korea and Mandke explored various entrepreneurial projects.
Eventually the two wound up in and then met at law school. The rest is a long story that finally led them to my local coffee house where, coincidentally, I was the first to buy their mobile gift card in its beta phase.
That mobile gift “card” is called mGift, for which they have high hopes that the name will stick as a method for purchasing gift cards. Until then however, they will have to educate retailers and in turn, retailers their customers about the benefits of a redeemable mobile gift message over the now traditional, plastic card. I say “now traditional” because they used to be called gift “certificates” when gift cards were the new technology.
“It’s really a two-pronged benefit for the retailer,” explains Park, “first the savings - not having to buy the cards and manage that inventory. But the second benefit is gathering personal information specific to their customers’ interests.” Park adds, “It’s like the Amazon recommendation model, if the ad is personally relevant, then you are likely to purchase what the ad recommends”. Or one at least “feels” like the retailer really cares about one’s personal life and not just as a canned demographic. One could argue that this model - and way of thinking about advertising - has evolved out of Google’s “relevance” technology in its search engine.
But in the case of an mGift, the customer has opt-in choices at the point of registering, which they do online to receive their mGift. The mGift is an encoded picture that shows up on the phone. When registering to receive the gift, the recipient can choose to opt-in to receive discounts, coupons, and information for specified categories or products of interest. They can opt-in to receive via text message, email, or both, offers from the mGift-issuing retailer.
Mandke and Park believe that the benefits for the consumer are all about convenience. Not only does an inventory of gift cards hold a problem for retailers, but also for the consumer. They’ll forget the cards at home, not know their balance, or have to shuffle through them in their wallet, all which can be annoying and cumbersome. But if the gift cards are sitting on your phone in the photos folder, they are always available and when spent can simply be deleted. Coupon and loyalty functions are also integrated into the mGift for convenience. As a side note, it’s much “greener” than discarding gift packaging or plastic cards.
Still in its early phases, lacking brand polish, mGift is ready for implementation as a white label product. With their backgrounds firmly planted in the backend of the product’s rollout, Park and Mandke have done due diligence. The next phase is to bring it to more retailers by working with POS companies for easy system transitions.
Ultimately mGift will move toward international appeal, but for now, the American consumers are their target, which shouldn’t take long with the help of forward-thinking retailers. Find out about the mGift mobile gift card program by contacting David Park and Sameer Mandke at .(JavaScript must be enabled to view this email address).