We’ve all experienced a mini heart attack induced by reaching in a pocket or purse for your wallet, only to realize it’s not there. This moment of panic may soon be a thing of the past, thanks to the increasing adoption of mobile wallets. Having a smartphone is now about as common as owning a pair of jeans. As smartphones become even more ubiquitous, so do the number of phones doubling as wallets — 2.1 billion consumers will use mobile wallets in 2019.
Mobile wallets and apps with mobile wallet integrations store consumer debit or credit card information, as well as rewards cards, coupons, and other discounts in a virtual wallet right on their phones. From ApplePay to Venmo to retailers’ apps, mobile wallets and their functionalities have caught on, providing brands new avenues to expand loyalty program access, simplify transactions, and further transition commerce into the digital space.
Connect and build loyalty
One common reason consumers abandon loyalty? Barriers to accessing and using their points. By building mobile wallet functionality into their own loyalty apps or connecting programs to applications like Apple or Google Wallet, brands can knock down those obstacles. Mobile wallets provide a digital space to store their points, coupons, and other loyalty information, making it easy for customers to track and redeem their loyalty rewards at any time.
Leading the way are the mobile wallet capabilities of the Starbucks app. By making every step of the loyalty process digital — from program sign up, to ordering and paying, to housing rewards — Starbucks has become the leader in mobile payments, with more users than Apple Wallet, Google Pay, and Samsung Pay. App users can connect to their phone’s built-in payment method, load money onto a digital Starbucks card, or add gift cards to their accounts (all of which can be used to pay both in-store or through the app). All transactions earn stars (Starbucks’ version of points), which members can easily track and redeem for rewards. This functionality not only simplifies the lives of customers, it creates more opportunities to build loyalty through convenience and accessibility.
Nobody wants to wait in line behind someone scrounging through their bag for a coupon or reciting email addresses in hopes one matches a rewards account. Mobile wallets simplify and speed up checkout to improve everyone’s customer experience by allowing users to store everything in one place (rather than search for rewards cards, type in phone numbers, or scour inboxes for discount codes). In-store payments can be completed with a single tap or QR code scan to decrease checkout time and possibly even eliminate the need for checkout clerks — as seen with Amazon’s ambitious Amazon Go stores.
Shoppers download the Amazon Go app, connect it to their Amazon account and credit card, then scan it when they enter the store (where sensors track items taken from shelves). Items are added up in a “virtual shopping bag,” and the app charges the shopper and sends them an email receipt. There is no checkout required, meaning no lines and no fuss — just convenience (with a side of IoT). While Amazon Go is ahead of the game in simplified shopping, brands can emulate its ideas by incorporating easy in-store mobile payments to speed up checkout.
Meet Millennials (and Gen Z)
Currently leading the pack of mobile wallet users are Millennials, with more than 70% using mobile wallets as a form of payment and roughly 10% taking advantage of digital wallets for all purchases. And as Gen Z accrues more buying power, this smartphone-savvy generation is also leaning on mobile wallets more and more to pay for things like Uber, groceries, and even rent. Providing seamless, cross-channel experiences is imperative to earn trust and build loyalty with Millennials and Gen Z. This versatile digital payment option is a great opportunity to create that connection. Brands wanting to stay relevant and grow with younger spenders will find this channel is a necessity in the coming years.
As the mobile wallet comes to power, its benefits are bestowed on both brands and customers. When brands take advantage of this payment option, they improve customer experience through easier transactions, greatly expand the accessibility of their loyalty programs, and break down the silos between online, in-store, and digital interactions. As consumers rely more and more on mobile wallets for everyday payments, brands are sure to see growing expectations that they too provide a digital payment channel. And the sooner they do, the more time they have to earn customers’ trust with this technology — putting them on the path toward emotional loyalty.
If your brand is ready to expand your loyalty and mobile wallet capabilities, contact Cheetah Digital today.