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Retailers lag on coupon, loyalty opportunities with mobile wallets: report

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August 22, 2013

Do retailers understand mobile wallets?

Although mobile wallets do present a big opportunity for retailers, only 19 percent of consumers surveyed said they have noticed a retailer implementing offers and loyalty programs using the technology, according to a new report from Vibes today.

Vibes’ new “Mobile Wallet Consumer Report” looks at how retailers can incorporate loyalty and offers directly into a mobile wallet program. However, the findings suggest that retailer adoption is not on par with consumer demand.

“The non-payment side of the mobile wallet allows consumers to move away from physical coupons and loyalty cards by saving them to their mobile device instead,” said Mark Tack, vice president of marketing at Vibes, Chicago.

“The Vibes Mobile Wallet consumer data shows that of the 85 percent of consumers who say they would receive some benefit from the non-payment side of the mobile wallet, the top two most favorable benefits include digitizing paper items and organizing content on smartphones,” he said.

“There are multiple reasons why mobile payments are lagging. A common concern we hear is that many consumers still find it easier to swipe their credit card than to pay with their phone. In addition, not all phones support mobile wallets for payment, and many consumers have security concerns.”

Mobile loyalty hub
Vibes’ survey includes responses from 1,000 smartphone users and was conducted in July by research firm Equation Research. The responses were collected via an online opinion panel.

The payment side of mobile wallets have not shaken out, with numerous carriers, financial institutions and third-party vendors vying for a share of mobile payments.

Therefore, the opportunity for retailers should be more focused on deals and offers that tie into a retailer’s CRM and loyalty efforts.

Key findings from the report include that 48 percent of consumers are aware of the non-payment side of mobile wallets. Thirty-three percent of consumers have used mobile wallets for non-payment functions, which includes coupons and loyalty card storage.

Although the non-payment side of mobile wallets are still new, the technology seems to be gaining traction with consumers.

Eighty-five percent of consumers said that they would receive a benefit besides a payment from a mobile wallet.

Additionally, 59 percent of consumers surveyed said that they would have a more positive view of a retailer if they received digital content through a mobile wallet in the future. Consumers in this group said that a mobile wallet would either completely change their perception of the retailer or make them like the brand more.

Thirty-eight percent of consumers said that a mobile wallet would have no impact on how they perceive a brand, and 3 percent of consumers said a mobile wallet would weaken or diminish their perception of a retailer or brand.

Twenty-two percent of consumers cited digitalizing paper items as a top priority with mobile wallets, and 19 percent prioritized loyalty cards as the top reason why they would use a mobile wallet.

Other uses that consumers are interested in include managing point balances and receiving time or location-sensitive offers. Fifteen percent of consumers surveyed did not associate a mobile wallet with a value.

When it comes to mobile adoption for non-payment wallet use cases, the demographic is split fairly evenly across all income levels.

Twenty-eight percent of consumers who used a mobile wallet for a non-payment activity earned less than $50,000 a year. An additional 26 percent of the group made more than $100,000 and the remaining 46 percent of consumers made between $50,000 – $100,000 per year.


Texas Steakhouse leverages Passbook

Defining mobile’s role
The report also points to some confusion around what a mobile wallet actually is.

Thirty-three percent of consumers only think about mobile wallets in terms of payments, compared to the 48 percent of consumers that associate a mobile wallet with storing some kind of information.

Interestingly, only 19 percent of consumers preferred to receive mobile wallet content via a native app. On the other hand, 46 percent of consumers were interested in receiving the content via email, showing how mobile wallets are not limited to apps.

Twenty percent of consumers picked SMS as the way that they wanted to receive mobile wallet content, and 11 percent preferred direct mail as the method to getting information about mobile wallets.

Only 4 percent of consumers said that they wanted to receive mobile wallet content via a banner ad.

To propel consumer interest in mobile wallets, retailers need to focus on offering consumers exclusive deals that they can instantly redeem on their mobile devices.

For example, 50 percent of consumers that have not used a mobile wallet said that better promotions and offers would entice them into trying out the technology.

“We have seen a major influx of retailers embracing the non-payment side of the mobile wallet, and this data further validates why so many retailers are getting on board,” Mr. Tack said.

“With Samsung Wallet and Google Wallet Objects joining Apple’s Passbook, the addressable market for the non-payment side of the mobile wallet is nearly 100 percent of smartphone users,” he said.

“Now that marketers have maximum reach, we expect more retailers to leverage mobile wallets to drive deeper engagement and loyalty with their customers.”

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York

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