Food for thought...
Sep. 13, 1999 (ELECTRONIC COMMERCE NEWS, Vol. 4, No. 37 via COMTEX)
-- BizRate.com Survey Finds Recognition, Usage Lacking With Online
Shoppers
"This is the year of the wallet." B James McQuivey, senior analyst
at Forrester Research [FORR] (ECN, March 22).
"This is the year of the wallet." B Michael Thiemann, CEO and
president of eHNC, the Internet commerce division of HNC Software
[HNCS], in a July 19 press release.
Sorry, but no, this is not the year of the wallet. The holiday
shopping season, which takes up about a quarter of the year, is nearly
upon us and digital wallets are barely a blip on the consumer's radar
screen.
A recent survey by BizRate.com, a Los Angeles-based online shopping
data gatherer, shows 58 percent of e-shoppers never have even heard of
a digital wallet. BizRate.com recently surveyed 6,800 shoppers who had
just completed purchases at one of more than 1,700 merchant Web sites,
and only 26 percent knew how digital wallets work. Sixteen percent only
had heard of them.
Not happy news considering digital wallets hold great promise for
banks, consumers and merchants: Financial institutions and Internet
retailers can reap the rewards of online shopping data and customer
profiling; banks can turn card-in-wallet loyalty into transaction fee
income; and consumers can free themselves from the quagmire of
repetitive Web forms and multiple passwords.
"I think there was a lot of anticipation that this holiday season B
if '98 was the season of e-commerce B would be the season digital
wallets come into play," says BizRate.com analyst Kip Levin. "I don't
think this year is going to be the year. If you break down the number
of users, it's just under 4 percent."
What's A Company To Do?
Just as discouraging might be the news that Microsoft [MSFT] Wallet
was the preferred product of those who had tried digital wallets. The
wallet, tucked away in the Internet Explorer browser, was discontinued
by Microsoft on July 13. The company plans to integrate a new wallet
soon as part of its Microsoft Passport program.
Passport allows consumers to create a single sign-in name and
password to use at all participating Passport merchants. But services
to streamline the shopping experience that need to sign up merchants
one at a time are unworkable, says Blaine Mathieu, senior analyst for
digital commerce at Stamford, Conn.-based consultancy Dataquest (ECN,
July 26).
Microsoft is about to announce a bunch of recent merchant partners,
but it's a big world out there. Consumer wallets should work
everywhere.
"The sales initiative has been a little more focused on a one- to-one
basis," says Margie Miller, product manager in the Consumer and
Commerce Group at Redmond, Wash.-based Microsoft. Miller points out
merchants can sign up for the program at www.passport.com.
Keeping Control
Personal information used for Passport is stored by Microsoft
rather than on the consumer's desktop. Another wallet vendor,
Seattle-based Qpass, also hosts shopper information, storing and
sharing data on buying habits. Consumers aren't high on this set-up:
83 percent who use wallets want the information kept on their desktop.
"I was blown away by that," Levin says. "I personally think the
Web-based [model] would be what people want. My guess is people like
to know they are in control of all their information."
Miller says Passport bends over backwards to protect consumer
privacy. Cornelius Willis, vice president of Qpass, dismisses consumer
fears.
"The public will realize the hard disk on their computer system is
not more secure," he says. "No individual has the same kind of not
only physical protections for their data, but also the firewall
protections a vendor puts in."
A major company is expected to roll out a substantial wallet
initiative in the next few weeks. Several banks plan to market wallets
more aggressively in an attempt to sew up the customer transaction
relationship. Wallets make sense, but there is a lot of work to do.
"I feel once financial institutions start issuing digital wallets,
and perhaps even digital certificates, as part of a solution in time
for this shopping season, you'll see the adoption rates skyrocket,"
Mathieu says confidently. "The new crop of digital wallet users will
not have to search for these solutions or find them by accident as part
of their browsers." (Kip Levin, BizRate.com, 310/305-3506; Blaine
Mathieu, Dataquest, 408/468-8552; Margie Miller, Microsoft,
425/882-8080; Cornelius Willis, Qpass, 206/409-4373.)
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Copyright Phillips Publishing, Inc.
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