Dec 7th, Google announced its next step in the journey towards enabling an Anywhere lifestyle for both businesses and consumers. Although trials have occurred over the past year, Google is now launching a national campaign by sending out window decals which contain QR codes to over 100,000 local businesses as part of the Favorite Places program. By scanning these QR codes, consumers will be given detailed directions through Google Maps, read detailed reviews of the merchant and possibly even receive a mobile coupon.
Following upon the recent successes of integrating mobile into the Black Friday shopping experience (see blog post by fellow Yankee Group Analyst Dimitriy Mochanov titled “Retailers Beware! The Mobile Shopper is Here!”), proliferation of smartphones and data packages put these capabilities in the hands of the consumer. With this Google Favorite Places announcement, local merchants do not need to invest in a mobile platform to provide reviews or drive foot traffic into the store. Merchants leverage Google’s investment and do not require infrastructure to drive consumers to their store. However, once merchants offer mobile coupons they will need 2D barcode scanning capabilities at the point of sale (PoS) to redeem the coupon from the handset. Now that we’ve gotten the details out of the way, let’s examine what QR codes may mean for general consumers and merchants.
QR codes can provide value but how much value depends on how merchants use them:
• Directions through Google Maps: In this first iteration, Google is providing a consumer with step by step directions to a store. The problem is that the consumer is scanning this QR code once they are already in front of the store. The value to the consumer here is limited. However by integrating the same QR code within your online advertising? Now Google Maps can provide walking and/or driving directions which becomes a real value add to the consumer.
• Ratings & Reviews: Providing reviews for a restaurant or store is limited when the consumer is right outside. Why not just see if the restaurant is crowded or try to visually see the presentation of the food yourself? However the value here for the QR code is to let the consumer read reviews of the level of service provided and intangibles such as cleanliness that the consumer cannot easily observe from outside the establishment.
• Mobile coupons: A consumer is outside your store and has scanned your QR code, but how do you get them to come inside? You have a captive consumer ready to interact so the mobile coupon is the best option to get them inside. The other options discussed above provide information while mobile coupons provide transactions and revenue. Utilize them.
After scanning QR codes this morning on my 2 year old Blackberry Curve, here are my results (which are unscientific but at least show what an average consumer will be up against):
• Size matters: When scanning the QR codes directly from my computer monitor, the size of the code matters. None of the Google Favorite Places in Boston worked with 3 different app readers on my Blackberry Curve. Once I enlarged the size of the code they worked just fine. It appears that the stickers Google is issuing for merchant windows are large enough where this doesn’t become a problem but is still worrisome for merchants looking to integrate mobile into their offline and online marketing strategy.
• Consumers don’t discriminate, neither should technology: With no common standards utilized throughout the US, app readers work on different types of codes. Consumers don’t discriminate between QR codes, Datamatrix codes, or any other proprietary code but the app readers themselves are not universal for all of the various code types. In the mind of the consumer they think “hey, here’s a funky looking code, I’m sure my app reader will work” and not understand the nuances between the technology. If you don’t believe me, read the reviews in the various application stores. The 3rd party app readers have very poor ratings but it is often not a technology problem reading the codes. Consumers are just trying to read interoperable code types.
• Cameras aren’t a limiting factor: Using a 2 year old Blackberry Curve and an original iPhone (without autofocus) to test out various codes, these older camera’s worked just fine. New phones with high resolution cameras and autofocus should experience even lower failure rates.
A whole host of other issues still combat this industry trying to gain popularity anywhere outside of Japan. For QR codes to become popular inside the US very soon merchants will need to deliver value to consumers, whether that is information based or through cost savings. In the end, the merchants are looking to drive transactions and revenue and the best opportunity to do so is with mobile coupons. These coupons will drive price sensitive consumers to open the door and come inside.