The Rise of Watch Commerce: How the Apple Watch Will Transform Retail

Over the last few weeks, I have devoted considerable time to discussing the road map for Apple Pay with numerous startups, established companies, and venture capitalists. Intriguingly, many large companies have now become aware of and fascinated by the infrastructure being built around Apple Pay. This digital ecosystem is far from the walled garden of closed wallet solutions that some payment startups once attempted to enforce. Rather, Apple has wisely adopted open standards with NFC (Near Field Communication), Bluetooth, and future open APIs. Astute payment startups, freed from false egos and legacy agendas, are beginning to realize that Apple Pay has far more capabilities than initially thought.

Commerce: The Unexpected Use Case for the Apple Watch

Apple has created a robust infrastructure centered around secure payments. This foundation will be fertile ground for innovation, with the next layers already in place: Passbook, iBeacons, Lock Screen notifications, micro location, and AirDrop. The Apple Watch will be at the forefront of this new adventure, making it uniquely positioned to become the center point of human needs and desires. Needs and desires are the driving force behind commerce, and the watch, with its haptic vibration system called Taptic, will play a pivotal role in this transformation.

Greater Commerce Utility Through Simplification

The limited screen size and other interface constraints of the Apple Watch will paradoxically create greater utility through simplification. I have maintained since 2012 that Apple's entry into payments will create the largest startup opportunity since the creation of the App Store. Over the last few weeks, I have helped envision the many ways in which Watch Commerce will emerge. I have identified at least 87 unique commerce use cases centered around or made more useful by the Apple Watch. Here is one example:

Strolling back to work from a meeting, you glance at your Apple Watch and make note of your budget. A few minutes later, you receive a Taptic vibration on your wrist notifying you that you are near your favorite independent coffee shop, Café Du Nord, and they are offering your regular Latte at a 15% discount if you take a detour on the way back to work. Though you crave a break, you receive this enticing notification just as you are standing in front of the shop. You decide to indulge, order, and pay while still in the street. You could have also walked in and enjoy a few minutes of fun banter with the baristas, paying using NFC-based Apple Pay.

The detour is timed with a real-time feedback loop controlled by the coffee house’s POS (Point of Sale) and production area, which is intelligent with sensors that track each step. You can choose to stray for a few minutes and pick up a magazine across the street. The moment your Latte is ready, you will receive a lock-screen notification that it is ready for you to pick up. You smile because you have had an experience in just a few minutes that would never have been possible without your Apple Watch.

Watch Commerce at Retail Stores Changes Everything

This entire experience could take place today using smartphones, but the use of the Apple Watch enhances it dramatically. When dealing with desires, I assert that this form of commerce will become irresistible. Some of it may be Pavlovian, but most of it is due to the close relationship Taptics brings to the already personal and intimate relationship a watch represents to most people.

This is just one example of how Watch Commerce in the real world will change the very nature of how we buy things. There are many more such examples. Most of the interesting ones will be in the world of retail, where astute companies and astute merchants will build grand portals into new retail sales environments that will be irresistible to customers.

We Will Someday Feel Naked Without Our Watch Commerce

Many of us cannot visualize the need for this new world of commerce, much as we could not see the need for the commerce we now transact with our smartphones. Nonetheless, all of us have begun to shift a tremendous amount of commerce to these devices. I have no doubt that we will all shift some of this commerce to these new watches. Once this shift cements, many of us will feel naked without our watches and the Watch Commerce they bring.

Get Ready for the Next Apple Pay Milestone: Watch Commerce