At SAP’s recent Retail Forum in Dallas, one of our most interesting meetings was with Pierre Bourbonniere from STM, the company that operates Montreal’s public transportation system. While you may be thinking, “What could my retail operation learn from bus and subway operations? “, hang in there for a second: there’s a very interesting loyalty and mobility story afoot.

As of today, 65% of the people coming into downtown Montreal use public transportation to get there. In Pierre’s words, that’s just not good enough. “We want to get people out of their cars – particularly those in single commuter cars. ” To do this, STM has leveraged its relationship with SAP to make using public transportation – namely, the card that riders use to access the system – more valuable. Here’s how.

To ride public transit in Montreal you need an “Opus ” transit card (for anyone who’s ever visited New York City, think MetroPass). Of the three million people that have Opus cards in the greater Montreal area, approximately one million of them are active users. What if those cards had more value than just the ability to get you through the turnstile to the subway station? What if those cards were linked to a mobile app that:

1. Suggested more ideal travel times? For example, maybe you’ve been leaving at 6:45am every day to get to work, not knowing that the 6:55 train would be much less crowded. By giving passengers better information, STM hopes to make using public transport more enjoyable, while also easing “pressure points ” on its system and improving efficiency.
2. Provided targeted offers from relevant retailers? STM already knows where you are, how/when you travel, and if you provide a little preferential information about yourself, it could ping your phone with a promotional offer on the cheddar cheese you keep forgetting as you walk past the grocery store located between the bus stop and your home.
3. Provided special offers for events to meet your lifestyle? STM knows that you like the opera, and on a particular Friday as you’re leaving work, the Opera House discovers it has 22 unfilled seats for tonight’s performance. When STM, having forged a partnership with the Opera House, pings your phone with a discounted rate for 2 tickets to the show, it also lets you know exactly which trains to take to get there.

Of course, privacy is always a concern for targeted offers, particularly those that leverage information about a consumer’s whereabouts. This may be even more of a concern for Canadians than it is here in the US, and to address the issue, neither STM nor SAP is in possession of the data in its useful state. Much like a nuclear launch sequence, SAP has 50% of the data, STM has 50% – both are needed to make the data meaningful and actionable. And clearly the entire program will require riders to opt-in. A pilot program of 2,500 STM riders starts in the next few weeks.

STM has lofty goals for this program – it wants to get riders to use public transportation 40% more often than they do today by the year 2020. So at this point, as someone who lives in a major city that never uses public transportation, I have to ask a simple question: “Would it work on me? “

Here’s the thing: It would. I’ve been an urban creature for most of my adult life, and I’ve probably used public transportation less than a dozen times. Why? Because it really doesn’t provide much value to me. But here’s the thing, at my core, I know full well that I don’t take enough advantage of all of the events and activities living in a city affords, mainly because I don’t keep up on the place as it evolves. I’ve been here long enough to settle into the restaurants I enjoy, the bands I like to see – in brief – I’ve gotten comfortable and lazy. And I don’t think that’s a very unique trait among city dwellers. Who has the time to be combing the local events and adventure publications to keep up on all that’s happening?

In a way, Groupon was supposed to save people like me from myself. But it didn’t, and the reason was that it multi-blasted random promotions to anyone in a given radius of a quasi-relevant zipcode. However, if the city where I live were to enact something along the lines of what STM is attempting, based on true preferential information and accurate geo-targeting, it’d definitely be enough to deter me from driving to a restaurant I’ve visited 20 times before. And in towns with high concentrations of college kids (read new residents every year), the value to find out “where’s good ” would be even greater.

Clearly I think it’s a great idea, and I’ll be very interested to see how the pilot fares. But what do you think – as a retailer, would you be willing to enter a promotion into such a program?