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Apple’s Passbook is a game-changer for retailers

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October 1, 2012

Apple’s Passbook recently debuted to mixed reactions. However, there is no doubt that it will in some way be a driving force for retailers.

Currently, there are not many companies who are taking advantage of Apple’s Passbook. Sephora, Target and Walgreens are just a few of the brands that have implemented the service into their applications to drive consumer engagement, as well as in-store traffic.

“Passbook is an interesting solution to a far simpler problem than full-blown mobile payments,” said Drew Sievers, CEO of mFoundry, San Francisco.

“It provides an easy way for merchants, airlines, hotels, and others to manage access and identity,” he said. “This is an important first step in properly mobilizing merchants.”

New way to pay
Passbook already has many retailers, airline carriers and hotel brands sitting up and taking notice.

The service lets marketers engage mobile users get location-based offers from participating companies and redeem them at the point-of-sale using their iPhone device.

Through Passbook, consumers can store their loyalty cards, promotions, coupons and tickets.

“I think that there will likely be quite a few creative uses of the technology by people not interested in building out a comprehensive mobile app,” Mr. Sievers said.

“Health clubs leap to mind as a potential user that could leverage Passbook for member access without having to design, build, and support an actual app,” he said. “Using the app for payments will be a bit more challenging in the short-term, but it can definitely be used effectively now for closed-loop solutions.”

Apple’s Passbook has already seen success.

Last week, Sephora announced that 82,000 Beauty Insider cards were added to Passbook. That number continues to grow daily (see story).

More retailers should implement Passbook into their strategies.

Consumers are becoming more comfortable with making purchases through their mobile devices.

Therefore, giving consumers the ability to store their loyalty and gift cards from their favorite retailers will definitely help drive foot traffic.

“I think many retailers will leverage Passbook for their mobile solution,” Mr. Sievers said.

“Apple’s approach is simple and effective for these access and identity focused challenges,” he said.

Not there yet
Many industry experts believe that although in hindsight, Passbook looks like a great idea, the technology is just not there yet.

“I like the fact that the retailers are able to maintain control over their existing app,” said Sheryl Kingstone, Toronto-based director of Yankee Group. “Hopefully down the road, it will have more of a seamless integration.

“Right now it’s very buggy,” she said. “The vision of it is a game-changer, but the implementation is still lacking.”

After more retailers come on board, Passbook will likely see more success.

“There are a lot of apps out there and there’s formidable competition in the mobile wallet space,” Ms. Kingstone said.

“There are definitely more retailers that are going to come on board, but right now, the question is will it work or not work?” she said.

Final Take
Rimma Kats is associate editor on Mobile Commerce Daily, New York 

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Rimma Kats is associate editor on Mobile Commerce Daily and Mobile Marketer. Reach her at rimma@mobilemarketer.com.

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