This is Part 2 of the Retail TouchPoints Payment Report. Part 3 will appear in the May 14 newsletter. Read Part 1 here.
With some of the world’s largest financial institutions now on board, the mobile wallet is fast becoming one of today’s hottest payment technologies. From MasterCard’s MasterPass to Apple’s Passbook and Google Wallet, a growing number of tech-savvy consumers are embracing mobile wallet services. That’s good news for retailers. A November 2012 Sybase 365/SAP mobile survey revealed that 53% of respondents think that the ‘killer apps’ that will drive consumers to start using mobile payments will be retail apps.
But convincing consumers to toss aside plastic for smartphone swipes takes more than the promise of simple payment processing. According to the Sybase 365/SAP survey, respondents say the ‘secret sauce’ for a successful mobile payment strategy includes location-based offers (24%) for retail shoppers and an enhanced point-of-sale experience for customers (28%). These days, mobile wallet technology must move beyond basic functionality to significantly improve the customer experience, as well as support a variety of complimentary services such as digital coupons and loyalty programs.
Following are the top 5 mobile wallet features that are winning over customers and encouraging retailers to leverage mobile wallet technology:
1. Location-Aware Services
Forget about clipping coupons. Nowadays, an increasing number of retailers are leveraging mobile wallet services to target consumers based on their proximity to a physical retail store. From in-store promotions to reminders about existing offers, location-aware mobile services can help retailers create a sense of urgency among shoppers to drive sales and build brand awareness.
“Location awareness of a mobile device creates all kinds of interesting opportunities for consumer engagement use cases,” said Chris Cox, Vice President of Product Development for Mobile Solutions at First Data, a global payment processing company.
2. Comparison Shopping
In today’s highly competitive retail market, a mobile wallet service that helps consumers save money is most likely to gain traction. Take, for example, ShopSavvy and its mobile app which lets consumers scan barcodes and keyword search to find the best deals and consumer reviews on a wide range of products from local retailers.
“We’re seeing a massive increase of people expecting not only product information as part of the mobile wallet retail experience but information that’s unbiased and neutral,” noted John Boyd, CEO of ShopSavvy, adding that comparison shopping “can make the shopping experience more fun.”
3. Loyalty Programs
With a whopping 89% of consumers carrying at least one merchant loyalty program card in their wallet, the challenge for tech-savvy retailers is “seamlessly tying together both loyalty credit accrual and loyalty credit redemption as part of a payment transaction for a mobile wallet,” said Cox of First Data. By allowing customers to collect, redeem and manage their loyalty program points, a mobile wallet can greatly enhance customer satisfaction.
4. Virtual Receipts
While mobile payments are typically about adding functionality, Moosejaw Mountaineering is using mobile wallet technology to make important cuts. Since rolling out Infinite Peripheral’s Linea-pro for mobile POS, the outdoor gear and apparel retailer has “eliminated the entire paper process,” according to Bryan Lively, Vice President of Retail at Moosejaw Mountaineering. Receipts are now wirelessly printed or emailed to customers. Not only does this enable a faster checkout process but retailers and consumers alike can keep better track of their receipts and streamline future returns or exchanges.
But that’s not all. Mobile wallet technology has also “helped Moosejaw eliminate over 50% of our counter space,” added Lively, reporting that “in a lot of our stores, we actually eliminated the counter completely,” gaining precious in-store square footage for merchandising.
5. Digital Coupons
With mobile coupon use rising among consumers, more and more merchants are recognizing the value of offering coupons, discounts, daily deals and promotions via mobile apps. Juniper Research predicts that the number of discount coupons that will be redeemed through mobile and tablet devices will reach 10 billion this year, up by more than 50% from last year. Digital wallets provide consumers with an easy way to carry and redeem coupons while enabling merchants to match coupons to specific card issuers or target customer segments.
Part 3 of the Retail Payment report will appear in the May 14 newsletter.