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Coca-Cola exec: Loyalty moves consumers to mobile wallets

During the “Mobile Commerce: Future of Retail” session, executives from Coca-Cola, Café Rio and Larry H. Miller Group spoke about the opportunities that mobile wallets and payments offer consumers. The session was moderated by Susan Reda, editor of Stores Media, Washington.

“Things have changed significantly since people started putting chips in cards. The new admin of NFC and putting the chip in the phone with both Google Wallet and Isis really provides the opportunity for the contactless payments to be much greater,” said Rick Kanemasu, vending strategy at Coca-Cola, Atlanta.

“The real carrot for the consumer for switching is going to be around loyalty and couponing,” he said.

Drink on mobile
Coca-Cola has tested a variety of mobile initiatives.

However, not all have the same longevity and strong connection with consumers.

For instance, Coca-Cola has a variety of applications available that center around mobile gaming and brand awareness. Although Coca-Cola might get a lot of app downloads and connect a brand with mobile gaming, an app might not be top-of-mind for consumers.

When Coca-Cola began putting credit card readers on vending machines, the majority were enabled with contactless payments. However, most consumers did not know what the technology was for, per Mr. Kanemasu.

For older demographics in particular, mobile payments have to justify an incremental value for consumers, which the Coca-Cola executive believes will be around loyalty and couponing.

Being able to include all offers and rewards into a mobile wallet is a good experience for consumers.

Coca-Cola is working with Isis to put a My Coke rewards card into a mobile wallet in Austin, TX. The brand is giving away 30 My Coke reward points for using the technology to buy a drink from a mobile-enabled Coca-Cola vending machine.

2012 was a pilot year for Coca-Cola with mobile payments. One year ago, only two percent of the company’s vending machines took credit card payments.

This past year the company rolled out cashless vending to tens of thousands of machines and plans to double the number in 2013, which will end up covering 30 – 40 percent of vending machines with cashless payment options.

“As you can imagine, it’s kind of the 80-20 rule, so 20 percent of the vending machines do 80 percent of the volume,” Mr. Kanemasu said.

“So from a volume standpoint, the majority of our volume for vending will be covered by cashless,” he said.

Convenient payments
Roger Miller, chief technology officer at Larry H. Miller Group, Sandy, UT also spoke on the session about how mobile plays a role for convenience items, such as movie tickets.

Larry H. Miller group operates more than 80 businesses and properties in the Western United States, including the Utah Jazz, Megaplex Theatres and 39 automobile dealerships.

For the Megaplex Theatres, the brand runs approximately six million consumers through its doors each year. Fifty-two percent of those consumers pay with credit cards, and if only five percent of those users switch to mobile payments, it is worth the investment, per Mr. Miller.

Mr. Miller said that the company has already made the investment from mobile payments.

“Contactless payments and mobile payments go hand-in-hand, whether you’re talking about a mobile wallet like Passbook, Google Wallet or Isis,” Mr. Miller said.

“Starting with contactless is just a first step – if we’re going to do business with customers the way that customers want to do business, we have to take payments the way that they want to pay,” he said.

Nontraditional marketing
In addition to convenience, mobile wallets also offer marketers a new way to mix up their marketing budgets.

“For a marketing initiative to work with Café Rio, we have to keep it fairly non-traditional,” said Ben Cramer, chief marketing officer at Café Rio, Salt Lake City.

“Our biggest asset is that we have crazy super-fans who promote for us, and if I make my marketing messages look and feel like a marketing message, it dies immediately,” he said.

For example, Café Rio has a program called ‘Where is it Wednesday.’ Instead of sending out a traditional message to bring in foot traffic with an offer, the brand can hide RFID tags around the city to give hints about the offer to spur word-of-mouth marketing.

Credit card payments make up about 65 – 70 percent of Café Rio’s sales. Mr. Cramer predicts that in the next year, 10 percent of those transactions will be through a mobile phone.

“When a person sees somebody getting something for free in line and touching their phone against this device, it creates even more ground swell,” Mr. Cramer said.

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