September 26, 2012, 3:31 PM

Apple’s Passbook opens a new mobile marketing venue

75,000 Sephora loyalty card members flocked to the mobile wallet in the first five days.

Lead Photo

Passbook loaded with loyalty cards, offers and tickets from various merchants.

There’s been a lot of hype about mobile wallets in recent years, but little adoption. Apple Inc. has the potential to change that with its new Passbook app.

Passbook is a mobile wallet that enables a consumer to store her loyalty cards, movie and event tickets, coupons, and promotions in a centralized location on her iPhone, iPod Touch or iPad. The app senses time and location—through the device’s GPS technology—and automatically displays a ticket or an offer when and where the consumer needs it. It also can be used by retailers to deliver location-based offers when consumers OK location tracking.

Retailers, travel firms and ticket sellers including Sephora, Walgreen Co., Target Corp., Starbucks, Fandango, United Airlines and Major League Baseball are leading the way with Passbook, integrating Passbook functionality into their mobile apps. Sephora, for example, has enabled its Beauty Insider loyalty club members with devices running Apple’s new iOS 6 mobile operating system to send their card information into their Passbook apps through a request made within the Sephora app. A digital version of the Beauty Insider card then appears within Passbook.

Sephora loyalty club members can now access their Beauty Insider card in the easiest way possible—accessing their points balance and presenting the pass to earn and redeem points while shopping in store,” says Julie Bornstein, senior vice president, Sephora digital. “More than 70% of mobile traffic to Sephora comes from iOS devices, so Passbook is a natural fit for Sephora customers. Being part of Passbook also allows recipients of Sephora eGifts a way to easily store, access and redeem them on their iPhone.”

During the first five days of Passbook’s launch, Sephora’s iPhone app was downloaded 300,000 times and the number of Beauty Insider accounts created via mobile increased dramatically, Bornstein says. “More than 75,000 Beauty Insider cards have been added to Passbook and we expect the number of cards added to Passbook to increase as more consumers get their hands on the new iPhone5 and download iOS6,” she says.

Sephora worked with m-commerce technology provider Branding Brand on the Passbook integration.

Fandango enables customers on the ticket purchase confirmation screen of its iPhone app to send mobile tickets to Passbook. Mobile tickets include QR codes that ticket takers can scan. Passbook displays the tickets within a certain timeframe and within a certain distance of the theater.

“It wasn’t a difficult integration,” says Jessica Yi, chief product officer at Fandango. “We had to standardize to the way Passbook receives passes. There are certain data points you need to send over to Passbook, so when Passbook retrieves the pass we have the data stored on our server with location, title, time, all the basics. Apple has done a great job of packaging it and making it simple for consumers and I’m sure the adoption will be strong.”

Target customers can integrate Target mobile coupons into their Passbooks. Passbook lets consumers know when coupons are about to expire.

“Passbook marks an exciting step forward as Target continues to seek the most innovative ways to deliver a great shopping experience to our guests,” says Phil McKoy, vice president, Target.com and mobile experience.

One thing a consumer can’t do with Passbook is pay. There was speculation that Apple’s new iPhone 5 might include Near Field Communication, or NFC, wireless networking technology, but it does not. NFC is a prime technology for enabling payments in the nascent mobile payments market. A consumer taps a smartphone with an embedded NFC chip against a checkout terminal with NFC functionality and a transaction is made between a mobile wallet and a store’s checkout system. If Passbook becomes widely used and Apple were to integrate it with NFC technology in a future iPhone, mobile payments could receive a big boost, industry observers say.

“It’s hard to predict—the digital wallet evolution has been going on for some time, but payments is only a part of it,” says Yi of Fandango. “It’s also about storing coupons and receipts and being a true wallet. The benefits of that are pretty clear, it’s just about who the players become and consumer adoption. The promise of the mobile wallet is valid, but it’s hard to say how it will evolve.”

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