Rewards for retailers ahead of the curve in payments
At the end of last year, the UK retailer, Marks & Spencer, launched a checkout-free payment app, ‘Mobile Pay Go’, to enable customers to pay for their items in under 40 seconds. The new services have allowed consumers to pay for items via their smartphones, scanning products up to the value of £30 through the app, and paying through Apple Pay, or a payment card linked to their M&S account. The new technology was initially trialled in six London stores, however, is due to be rolled out in more locations over the course of this year.
The new initiative will inevitably allow for a sharper focus on other areas of the store, and overall customer experience, particularly during peak times and rush hours. It has also been incredibly successful, with the M&S HQ store at Paddington now seeing 20% of its sales going through ‘Mobile Pay Go’, with 170 items on average being purchased through the app every hour.
These developments are not atypical of other similar, successful, frictionless technology offerings witnessed throughout the retail sector. Starbucks, for example, already accepts 5 million transactions per month through its personalised payment app, while Sainsbury’s and the Co-op are also trialling technology of a similar nature. In addition, Tesco, already offers the Pay+ payment app to customers, and Barclaycard, is developing an app that allows customers to pay for their items through their smartphone photo technology.
So, why are so many retailers plugging for mobile point-of-sale technology (mPOS) and own-branded payment apps?
The “concierge” shopping experience
On a general note, apps help retailers to focus more on offering a seamless shopping experience to consumers. Above all, these tools save customers time and stress at the checkout, and by making payments fast, secure, flexible and reliable, retailers can create a more pleasant shopping experience overall. Additionally, by breaking the “countertop barrier” between assistant and shopper, not only are queues and waiting times greatly reduced, staff equipped with mPOS devices are able to provide a far more personal, concierge-like service, providing assistance to the customer in the aisle, by searching and locating specific products, and allowing them to pay on-the-spot, or arrange a home delivery.
Enhanced loyalty, with good uptake of retailer-specific apps
In an age when battling against your competitors on price is seen as somewhat passé, point-of-sale systems allow retailers to build on their knowledge of the customer as an individual, and not as a collective, or segment.
The right system provides accurate insight into past purchase information, and therefore buying behaviours, patterns and preferences. According to research conducted by Parks Associates in the US, consumers are embracing mobile payment apps, with 25% of smartphone owners in the US using these platforms at least once a month. The research also showed that more than 3 million retailers combined are accepting Apple Pay and Android Pay, however interestingly, consumers favour the retailer-specific apps, and use them more frequently.
Retailers should therefore aim to be ahead of curve in mobile payment app technology, and merchants with a loyal customer base should see the new technology as a helpful addition to their existing mobile wallet offerings, which allow customers to earn loyalty awards and offers when spending in-store. Merchants can go one step further by linking the two services together, alerting customers about different offers available at the time of the transaction in-store. The technology can also be used to understand which customers are buying what, so that marketing campaigns can be validated, merchandise strategies and segmentation improved, leading to better, more efficient targeting overall.
Lastly, some end-to-end payment providers offer consolidated reporting services for payments made in-store, online, or on the road. There are also providers who offer inventory, employee and customer management systems alongside their traditional payment services. This additional layer of business intelligence is a valuable way to keep operations running smoothly, as well as providing a next-gen level of customer experience to shoppers.
Retailers who are late in accepting these solutions may miss opportunities to gain insight into adopters’ purchase and app usage behaviours, in-house operational benefits, as well as the opportunity to build on customer loyalty and long-term buy-in.
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