Privacy, personalisation and ‘deep pockets’ – how Apple can stand out with Apple Pay and Music

Apple unveiled a stream of new services and tools at its Worldwide Developers Conference yesterday (8 June) including a move into music streaming, a more personalised operating system and the launch of its mobile payments service in the UK. These are all highly competitive markets and Apple will have to use all its marketing clout, as well as highlight its points of differentiation to succeed.

Apple Pay

Apple’s mobile payments service is adding loyalty services and expanding outside the US for the first time, coming to the UK in July. To ensure the launch is a success, Apple has managed to get far more brands and banks on board than it managed in the US.

This is partly down to the fact that payment systems in the UK are already compatible with Apple Pay technology. In the US Apple also faces competition from big retailers such as WalMart, which are looking to launch their own service.

However, UK retailers are also keen to position themselves as forward thinking digital brands and tying up with Apple helps to build that proposition. Big names including Boots, Marks & Spencers, Costa and Transport for London have all signed up to offer Apple Pay at launch, while apps from Argos, EasyJet and Booking.com will also accept it.

Laura Wade-Gery, executive director, multichannel at M&S, says: “We’re delighted to be one of the first retailers to support Apple Pay. M&S already has one of the biggest contactless payment estates in the UK and our integration of Apple Pay means we are well set up to cater for customers’ evolving shopping habits.

“We’ve already seen our customers embrace the benefits of contactless technology and mobile payment.”

Laura Wade-Gery, executive director, multichannel, M&S

The retailers are also key to Apple as it looks to make its mobile payment service the default for consumers. As Forrester analyst Thomas Hussen puts it: “Apple Pay needs merchants more than merchants need Apple Pay.”

The fact it has the London transport network on board should help create awareness and “be useful in consumers’ daily lives”, Hussen adds.

“The challenge will still be to convince a majority of retailers to get on board. It will take time to change people’s payment habits and merchants will need to see clear benefits to really embrace the solution,” says Hussen.

Forrester estimates the market for mobile payments will more than double to be worth $142bn in 2019 and that consumers are increasingly interested in accessing services including loyalty, rewards and payments from one place. Apple wants to be that place.

However it faces competition, namely from Google which recently updated its own wallet service. Hussen believes Apple will look to differentiate by talking up the privacy of its service.

Hussen adds: “Apple emphasised the importance of privacy in several announcements beyond Apple Pay. This is not new since the brand started to double down on privacy in 2014. However, I believe this is a way to differentiate from Google especially in mobile payments where building trust among consumers and merchants is critical. It will increasingly matter in a connected world where smartphones and other wearables access incredibly personal and contextual data about individuals.”

Privacy is also important to merchants, with Costa’s head of mobile Jon Fisher highlighting the importance of “privacy and security” as well as a seamless customer experience in its decision to sign up to Apple Pay.

Apple Music

apple music

Apple is also diving into competition with the likes of Spotify, Deezer and Google with the launch of its “one-stop” music service. It will offer streaming subscriptions as well as a radio service and social network to connect artists with fan.

Apple is being typically hyperbolic about the service. Apple exec Jimmy Iovine claimed “It’s all the ways you love music all in one place” while CEO Tim Cook claimed it will “change the way we experience music forever”.

The ad (see below), dubbed “The History of Sound”, chronicles all the ways people have loved music – from the gramophone in 1888 through vinyl and cassettes to Apple Music in 2015.

https://www.youtube.com/watch?v=9-7uXcvOzms

Hussen suggests Apple’s “deep pockets” and history in the music industry will help it succeed despite the competitiveness of digital music and Apple’s relatively late entry to the streaming market.

“[The new music service] can automatically be made available to a huge installed base of devices. The competitive landscape is very different here: Spotify and the likes do not have the deep pockets of players in the payment ecosystem and Apple has already disrupted the music industry,” he says.

The opportunity for brands is less clear. There will be no ad-supported service with users have to pay a £9.99 monthly subscription.

Apple’s iOS

iphone ios

Apple also updated its operating system at WWDC, most notably with Proactive, a personalised feature that offers users suggestions based on factors such as time or location.

It will also learn a user’s behaviour over time so that if they are in the gym and plug in their headphones, Proactive will bring up an exercise playlist to listen to.

While Apple is catching up with features already offered on rivals Microsoft and Google’s personal assistants, Carl Uminski, co-founder at digital agency Somo, says the updates show Apple’s focus on better understanding its consumers.

It will also offer brands a change to offer more relevant communications to Apple customers.

“iOS 9 is a clear marker of Apple’s intent to deeply understand customers and provide more personalised offerings. Contextual enhancements have made iOS and WatchOS more intelligent and proactive, allowing brands to create more relevant and engaging mobile experiences for a targeted audience,” he adds.

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