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Apple Passbook Offers Retailers Greater Opportunity For Mobile Engagement

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Apple has once again taken the market by storm with the introduction of the iPhone 5, but arguably the most significant news recently from the communications innovator is the Passbook offering, that allows iPhone users to integrate their loyalty cards, tickets and boarding passes within a single platform.

As of Sept. 30, 2012, organizations including Merchant Warehouse, Fandango, Major League Baseball, Sephora, Target Corp., United Airlines, and Walgreen Co., have included Passbook functionality into their mobile apps.

 “With Apple Passbook, retailers can take advantage of the consumers who are already using their mobile device to shop, look for deals or comparison shop and target them instantly,” said Dan Dufault, Executive VP of Sales and Marketing for Merchant Warehouse. “Shoppers who receive these deals and offers can then take an immediate action and make a purchase. Retailers who implement mobile strategies such as Apple Passbook allow engagement with current customers and new customers, giving them a leg up on the competition, increasing retention as well as growing their business.” Merchant Warehouse recently announced that retailers utilizing the Genius Customer Engagement Platform now can accept Passbook at all brick-and-mortar locations.

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When shoppers visit store locations, they simply open the Passbook app and store associates scan a digital loyalty card barcode, allowing consumers to instantly collect loyalty points, and redeem coupons and offers at the point of sale.

By implementing Passbook, retailers can improve customer engagement and create optimal brand experiences, according to Van Baker, VP and Research Director for the Mobile and Client Computing Services branch of Gartner Research. Although Passbook is a “fairly simple application that is merely a common container for coupons, gift vouchers, stored value cards, movie tickets, and boarding passes,” he noted, “retailers will see Passbook as another avenue to connect with their customers. It will act as a resource to help retailers make digital coupons and loyalty program cards easier to access for consumers, raising the visibility of the different coupons and offers being delivered.”

Moreover, Passbook users receive real-time updates and location-based alerts for passes they own. All loyalty cards are stored on the iPhone lock screen so that when shoppers are near a specific location and unlock their smartphones, the loyalty card appears automatically. This feature ensures seamless payment processes for mobile-savvy shoppers.

Passbook Vs. Payment

Some retail industry experts are questioning the introduction of Passbook and why Apple has not taken the plunge into mobile payment by enabling Near Field Communication (NFC) within the new iPhone.

“My first impression is that Passbook is a bit like first generation Siri,” Paula Rosenblum, Managing Partner at Retail Systems Research (RSR), told Retail TouchPoints. “It’s not really ready for prime time. It appears to be a coupon aggregator and for the most part, you have to push stuff to it. There’s not a lot there just yet.” 

While NFC seems like a logical next step for Apple, offering mobile payment capabilities is not a necessity to increase Passbook adoption, Dufault added. “Apple has done a great job keeping everyone guessing on the NFC front,” he said. “But the reality is that Apple does not need NFC for Passbook to be successful. The existing QR and barcode standards offer ease of use and implementation and many customers have already started to become accustomed to the idea of using them.”

iPhone 5 Sales Surpass 4S

During a Sept. 12 event announcing the new iPhone 5,  Apple CEO Tim Cook noted that the company had sold  more than 400 million iPads and iPhones through June 2012. But following the official unveiling of the iPhone 5, Apple announced on Sept. 17, two million pre-orders were placed for the new device — more than double the previous record held by the iPhone 4S. Additionally, on Sept. 24, 2012, the company reported the more than 5 million devices were sold.

Along with the new iPhone, Cook and the Apple team announced the availability of iOs 6, which includes more than 200 advancements to the iPhone and iPad software. These features include a new “Maps” offering, advanced Siri functionality and full integration with Facebook, allowing users to synch alerts and calendar invitations from their social media accounts with their personal calendars.

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