Apple’s Passbook: Mobile Local Search Identity Starts to Materialize

Last month, we covered the now well-known "Mapgate" snafu in Apple's iOS 6. Though this has lots of important implications for mobile local search (and for Google), it overshadowed other impactful features of the operating system.

Chief among these is Passbook. Though it has gotten a nod from tech media and analyst corps, there's still a fair amount of confusion about its value and utility. This is particularly true at early stages, before there are legions of apps that demonstrate its capability.

At a basic level, Passbook organizes digital loyalty cards, gift cards, tickets, and mobile payment standards. Unlike other standalone solutions, its advantages lie in its central position at the OS level, and its SDK for developers to build Passbook functionality into their apps.

Walgreens, for example, allows users searching within its app to tie their rewards cards to Passbook. They can redeem promotions by opening the Passbook app at the point of sale, and follow written instructions for store clerks to scan the barcode that displays on their phone.

This ties into Walgreens’ existing system of deal distribution and POS redemption in its own branded app and rewards card. The only difference is that users can now also choose use them through Passbook which is more of a “one-stop-shop” to keep all their digital collateral.

walgreens-passbook-integration

App Store Within An App Store

This unification is increasingly relevant in a fragmented app marketplace where “app fatigue” tempers growth for individual app developers. Tying into Passbook allows them more distribution through Apple’s centralized on-deck platform.

And many others are taking advantage including Starbucks (stored value cards), United (ticketing) and Target (loyalty). Meanwhile third parties are joining Passbook such as Gyft, to tap into a long tail opportunity for gift card exchange.

Bringing all of this together makes Passbook a mini app store in itself. And like the App Store it will only be as good as the third party developer ecosystem that builds around it. Out of the gate, it isn't so special, but its utility is only starting to be shown.

In that way, what Passbook becomes a year from now will be vastly more robust and useful than what it is today. That will include its stated uses like ticketing, loyalty cards, and stored value cards – but new categories will also emerge.

Some are starting to appear. Take Valpak’s iOS app. As opposed Walgreens’ single point solution, a much wider array of coupons can now be searched and saved to Passbook. And push alerts can be sent whenever users are nearby a chance to use one. This boosted the app's iTunes ranking overnight, cracking the top 100 and standing at No. 87 at the time of this writing. It also jumped from No. 177 to No. 6 in the lifestyle category. As app store optimization (ASO) goes, this will have a snowball effect on continued downloads.

Through this, Valpak’s utility – already addressing a deal-hungry marketplace – reaches many more users by adding this one update. We'll start to see this happen on a broader scale as iOS developers continue to latch on to Passbook's versatile functionality.

"[It's] Amazing to see how something that was an idea a few weeks ago has been such a hit with users," said Tobias Dengel, CEO of Willow Tree Apps, who worked with Valpak to develop its app.

valpak-passbook

Bringing It All Together

Much of this versatility results from Passbook's goal to simply federate different systems at the front end. It's somewhat agnostic to various competing standards of redemption and authentication, including POS scans and keyed number entry (but no NFC yet).

This flexibility combined with Passbook's on-deck positioning in iOS will make it a powerful tool for users to organize all of their coupons, gift cards, and loyalty cards. As such, it will help these products get over the hump of mobile adoption.

Similarly for app developers, retailers, and small businesses, it offers economies of scale and the ability to reach many more users than the fragmented app marketplace offers on its own. It also offers a consistent UI, to which growing ranks of iOS users will be acclimated.

Acclimation is a key point, as user adoption of payments, coupons, and other mobile value exchange has erstwhile been tempered by comfort levels. In many ways, Passbook will standardize this process, while retailers meanwhile educate users out of self-interest.

This will all accelerate the chicken-and-egg challenged system of adoption across these areas of mobile. Those include deals, ticketing, loyalty, payments, and other mobile local search (and non-local) applications that haven't even been launched yet.

In other words, Passbook's true identity – to paraphrase Michael Corleone – has yet to reveal itself.