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Near Field Communication Serves Up Supply Chain Link

I have been seeing a close link for the past three years between supply chain management in the electronics industry and online advertising, especially the ad networks serving up content.

Last week, {complink 2294|Google}, along with partners Sprint, CitiGroup, MasterCard, and FirstData, unveiled a platform that would enable consumers to ditch the plastic credit cards and paper and coin currency and pay for goods and services with a smartphone running Android. Google Wallet is set to roll out in beta this summer in Manhattan, Portland, and San Francisco.

Samsung, NXP Semiconductors, and Google have worked together to create the Google Nexus S 4G mobile phone available on Sprint. Google Wallet will establish application programming interface (API) to enable the transfer of offers, loyalty programs, receipts, and more at the point of sale (PoS).

Today, hardware and software partners must work directly with Google to build products and services that connect to Google Wallet, but in the future that will change. VeriFone, Hypercom, Ingenico, and VIVOTech have been working with Google to develop PoS systems to be tested by retailers, including American Eagle Outfitters, Bloomingdale's, The Container Store, Foot Locker, Guess, Jamba Juice, Macy's, Noah's Bagels, Peet's Coffee & Tea, RadioShack, Subway, Toys “R” Us, and Walgreens.

The platform relies on Near Field Communication (NFC) technology to drive mobile commerce transactions. And while Google and partners point to mobile commerce as the driving factor behind the announcement, the application also can support personalized marketing and advertising campaigns, as well as a network of hardware and software developers that will no doubt build on top of the Google Wallet NFC standards. Debbie Arnold, NFC Forum director, says there are 15 standards engineers need to take into consideration.

With Google integrating mobile commerce and PoS connections with smartphone, could its next stop be supporting backend enterprise systems? Would Google partner with SAP and Oracle to develop auto-replenishment inventory platforms for manufacturing facilities?

Arnold says SAP, Oracle, and other enterprise platform makers have features in manufacturing enterprise software that trigger auto replenishment of goods from suppliers, but not so many connect with mobile commerce applications to replenish components or pull down online advertisements from ad networks as inventory of finished goods gets depleted.

Kelly Pennock, Visible Technologies CEO and former president of analytics at First Data, says just-in-time manufacturing will turn into just-in-time supply chain for mobile. “At Amazon.com, where I also worked, we tied the supply chain to the online website and purchasing, working hard to keep inventory low,” he says.

NFC integrated into Google Wallet could also provide inventory forecasting, predictability around time of week, time of day, and season of year, according Pennock. He says the higher the volume, the truer those predictions.

Platforms are available today to replenish inventory from data gathered through mobile purchases. Pennock says companies simply need to build middleware to connect hardware inventory replenishment with mobile commerce sales, ad campaigns, and online ad networks.

Similar to {complink 2470|IBM Corp.}, Google's push into NFC and mobile commerce could indirectly prompt SAP and Oracle to link more closely with online advertising. The online advertising network OpenX, for example, said it secured $20 million in venture capital funding. SAP Ventures, the VC arm for enterprise software maker SAP, led the round and will take a seat on the company's board of directors.

8 comments on “Near Field Communication Serves Up Supply Chain Link

  1. DataCrunch
    May 31, 2011

    The Google Wallet is a significant step forward in moving forward mobile payment systems.  Whether or not Google Wallet will be successful, it will start a frenzy of activity in this space by established companies and start-ups. Google is smart to leverage the existing credit card payment systems, like MasterCard, which should speed up adoption and Google’s rollout plans.    I have heard of mobile payment systems eventually replacing credit cards altogether and replacing the actual underlying credit card payment system.   Google’s approach does not threaten the credit card companies.  I am curious to see the flood of competition in this space, which will happen.

    I think it will be a natural fit for POS and Enterprise companies, such as SAP, to partner with Google and others that enter in this space.  If done correctly mobile payment systems via NFC can integrate pretty seamlessly to the existing backend systems infrastructure. 

  2. Mr. Roques
    May 31, 2011

    While Google has failed with some social projects (Wave, Buzz, etc) it has clearly shown that when it needs to generate income, it can (ads). 

    They have a ton of information about us (gmail, google search), they are reaching millions of users (Android) and I fully believe they will make Google Wallet work. 

    I've been waiting for NFC for a while now. We have to see if Apple also goes in that direction with the iPhone 5 or iPhone 4S.

  3. Mydesign
    June 1, 2011

          Laura, I think Google is moving away from social commitments to commercial developments. I agree that what were products came from Google are at par with quality and functionality wise. Google wallet is the latest add on for this category with citi and maestro card. But again a big question, whether we really need a new payment system because there are many other socket payment systems are in use. More over for the new payment system, companies who want to use the service have to generate a new set of compact code for availing the service.

  4. Barbara Jorgensen
    June 1, 2011

    Hi Laurie–I have a question: is this another means by which advertisers can target customers? I understand the systems-level concepts and I even am in favor of ditching the plastic. But how much of my data will they hold on to; is there an opt-out; and are ads going to flash across my screen every time I use an app? At least with a plastic credit card, the only company advertising to me is the card issuer (on the card, on their website etc.) But if every vendor I pay through this method can reach me at a whim, I'm not so sure I like the idea.

  5. Ariella
    June 1, 2011

    You raise an important point about privacy issues, Barbara. That does seem to be a downside to the convenience of applications.  It would be a boon to marketers to gain access to so much information about a person's spending habits, and if they can pick up on their location, as well, they have a gold mine of information.

  6. seel225
    June 1, 2011

    @Barbara, your point is valid because event i don't like other company vendors to see my spendings and i don't even like to see ads when i am using the app. The good side of it is we can reduce the plastic usage and which protects environment.

  7. Laurie Sullivan
    June 1, 2011

    Yes, Barbara, this is another means by which Google will give advertisers a means to target consumers with ads, coupons and special offers. There will be an opt-out process. In fact, you can opt out today on receiving most ads. For most consumers, it's just difficult to find the opt-out button. They, Google, will likely keep your data the same amount of time as they keep search data. You can find information on the length of time and the type of data Google stores here: http://www.google.com/privacy/faq.html#toc-store. Also, you wrote “At least with a plastic credit card, the only company advertising to me is the card issuer.” That's not exactly true. It's the card issuer and their partners that can use the data to email or contact you with other offers. 

     

     

  8. Mr. Roques
    June 28, 2011

    Well, it's never been a question of too many options (think mp3 players). The one that sells the idea to most people will win, not even the best one. 

    I'm waiting to see if NFC will live to it's hype.

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