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Mobile Wallet Vs. In-App Payment: Benefits And Boosting Customer Loyalty

Mobile payment is becoming an increasingly popular way for consumers to shop, whether it’s through online ordering, in-store conversion, or third-party apps. Pew Research suggests more than 77 percent of Americans own a smartphone. And according to a 2016 study from BI Intelligence, in-store mobile payments are projected to hit $128 billion by 2021.

The versatility and accessibility of mobile payment gives marketers new opportunities to engage with consumers in real-time, at different stages of the customer journey. Though mobile is its own unique medium, the experience itself is broken up into several different delivery channels, each with unique engagement potential.

Here is a breakdown of the different mobile payment channels, and how marketers can use them to increase conversion, improve customer experience, and foster long-standing loyalty.

Building loyalty through mobile wallets

Mobile wallets are a way for consumers to store their credit or debit card information on a smart device. Major smartphone providers offer some iteration of a mobile wallet (Apple Pay, Google Pay, Samsung Pay). Many of the major banks, like Wells Fargo, Chase, Capital One, etc., also offer their own apps for customers.

Along with credit card information, mobile wallets have the ability to aggregate and store coupons, discounts, rewards (points or miles), airline boarding passes, and loyalty card information, from participating retailers and financial institutions.

Podcast: Building Loyalty On Mobile

“Apple Wallet can store consumer loyalty cards that are living breathing cards — rewards balances (points/miles) can be updated in real time via a loyalty API,” Jack Philbin, CEO, Vibes, said. “Specific CRM reminders can be sent via the wallet API — providing a much more engaging use case than simply having the physical card in your leather wallet — or the mini plastic card on your keychain.”

Philbin says marketers can benefit from utilizing mobile wallet functionality on the payment or “non-payment side.”

On the payment side: Retailers who participate in Apple Pay or Google Pay programs can charge customers directly from their mobile device in-store, at point-of-sale. This can help curb long lines, and promote pay-on-the-go programs.

On the non-payment side: Customers have the ability to save and store coupons, discounts, and loyalty cards within their mobile wallet. Coupons and discounts can be offered with unique barcodes or QRs that can be redeemed in-store, right on their device. Loyalty programs can also be updated and triggered based on point accumulation, further fostering repeated use.

Philbin says the process provides marketers with greater transparency.

“Apple Wallet passes each have a unique barcode which allows marketers to track the redemption of each individual coupon,” Philbin said. “This is the ‘last mile’ that marketers have been waiting for — trackable conversion closes the loop for marketers and gives a direct look into ROI.”

Owned in-app loyalty

The other way to do this is for a retailer to develop their own customer loyalty app. An owned app can provide the same functionality that a mobile wallet does, with the added benefit of fostering a direct brand connection with individual customers. Customers who choose to download a specific brand’s standalone app can also be viewed as more valuable when it comes to engagement and retention.

Starbucks is a great example of a brand that’s doing this right. According the eMarketer, Starbucks currently has more mobile payment users than Apple Wallet, Google Pay, and Samsung Pay (23.4 million, 22 million, 11.1 million, and 9.9 million users, respectively), and is projected to remain the leader of the mobile payment pack until 2022. 

The Starbucks Rewards program offers app users the ability to upload currency straight to their app, which can be applied at the register in-store, or for mobile ordering ahead (allowing customers to skip the line during in-store pickup). Each transaction yields rewards points, which can be redeemed for deals, like free coffee. Starbucks also offers special discounts and coupons exclusively for Rewards members.

Related: 5 Tips For Mobile Engagement That Sticks

Amazon Go’s entire customer experience operates entirely through their owned mobile system. Customers simply “scan in” as they enter the store, and their entire shopping process is monitored, documented, and paid for through their Amazon account.

What to pay attention to here, is the incentive element. Starbucks is providing extra value for consumers through a robust rewards program. Amazon Go is streamlining the entire grocery experience.

Mobile wallets vs. in-app loyalty

Providing enough incentive to retain customers through app downloads is easier said than done. Starbucks and Amazon Go succeed here because the products they offer are habitual — people typically buy coffee every day, and grocery shopping is a fairly frequent endeavor.

Pew Research data shows that more than half of Millennials favor mobile incentive programs.

But if you’re a retailer with loyal, but more infrequent, buyers, app retention may be a harder sell. This is where mobile wallet opportunities may present a better option to reach customers on an ongoing basis.

Is blockchain the future of mobile payment options?

According to Deloitte, blockchain could pose new opportunities to further enhance loyalty and digital wallet payment programs by providing a more seamless and secure transaction process that can be accessed in real-time.

“Through a trustless, decentralized technology solution, blockchain is centralizing the customer’s loyalty programs. Loyalty providers decide how and with whom the customer uses these rewards, but from a consumer perspective, his/her ability to access and manage them is practically frictionless.”

Melanie Mohr, CEO/founder, Yeay, a social media platform focused on Gen Z influencers, says they’re developing blockchain capabilities to reward users for providing product recommendations. The theory is that Gen Z influencers will be able to exchange WOM token (Word-of-Mouth tokens) for discounts and brand deals. Participating brands will benefit from the earned media opportunity.

“Especially now through blockchain, we can record word-of-mouth where it’s happening and we can make it transparent, traceable and therefore valuable for brands,” Mohr said.

“Let’s also remember that Gen Z is an incredibly tech-savvy generation,” Philbin said of the mobile payment appeal for younger consumers. “While Millennials remember playing solitaire, coming home to dial-up internet and using AOL; Gen Z was practically born with a phone in their hand.”

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