Mobile wallets are more marketing channel than payments topic: Forrester
While mobile wallets currently offer significant value to brands, marketers must also look beyond those solutions and focus on mobilizing loyalty platforms to create branded moments and transform payment options into a viable marketing channel, according to a report from Forrester Research.
The report claims that mobile wallets are set to become rich marketing platforms within the next five years, and suggests that marketers should be testing campaigns within the payment platforms now to maximize full potential for the future. Placing a higher focus on mobile loyalty is also imperative in connecting with consumers, with brands such as Starbucks already doing an impressive job at developing cohesive mobile engagement platforms.
“The key takeaway for brands is that they should not see mobile wallets as a payment topic,” said Thomas Husson, vice president and principal analyst at Forrester Research, Paris, France. “They need to add value before, during and after the transaction by delivering services in the mobile moments of their customers.
“It means mobilizing their loyalty programs and branded content and contextualizing offerings for real-time. Mobile wallets will increasingly become a marketing channel.”
Digital wallet options expand
Forrester credits third-party payment solutions such as PayPal and Apple Pay with broadening new horizons for marketers and presenting the opportunity to create a successful digital wallet, which the company defines as a solution that enables customers to manage assets such as coupons, loyalty perks, gift cards and electronic receipts from several brands, and also allows transactions to be completed.
Marketers must think of digital wallets as more than a payment option, as they have the ability to offer a streamlined shopping experience, loyalty bonuses, a wider audience reach than most mobile apps allow and the capability to place advertisements such as banner ads within the system.
“Despite mobilized loyalty programs being consumers’ most desired mobile wallet feature, it is the feature least integrated into mobile wallet today,” said Jack Philbin, CEO and co-founder of Vibes and vice chair of the Mobile Marketing Association’s global board. “That makes this report a wake-up call for marketers.
“Mobile wallets have been on the rise for quite some time now, but Apple Pay has put mobile wallets on the map for consumers, and it’s time that marketers and brands pay close attention. The true opportunity is on the non-payment side of mobile wallet, which is storing and managing special offers, coupons and loyalty cards in Passbook (for iPhone users) and Google Wallet (for Android users),” he said.
“Brands have found this new marketing channel to be highly effective at driving in-store foot traffic, increasing basket size and improving loyalty.”
Starbucks is an example of a brand thinking ahead in terms of digital wallets
Forrester discovered that 30 percent of mobile users surveyed use their device to compare prices when shopping in a bricks-and-mortar store, while 25 percent search or redeem coupons on their smartphones, proving that the need for better consumer experiences exists.
Meanwhile, 57 percent of respondents in the United States admitted that loyalty programs and points are the top feature in a mobile wallet, with 56 percent giving that title to discounts and deals. Other important options to consumers ranged from reservation abilities, bill paying at restaurants, digital tickets and price comparisons.
Marketers that are just now implementing digital wallets should aim to incorporate all of these capabilities, as some brands including Starbucks are already heading in this direction with the hopes of becoming pioneers in the mobile commerce space.
“Starbucks is definitely interesting to watch because their app integrates loyalty, gift cards, product information, real-time insights and branded content,” Mr. Husson said. “Payments fade into the background to cede place to a mobile engagement platform.
“However, it is not a wallet per se in the sense that it only works at Starbucks and does not aggregate offerings from multiple brands. Retailers are ahead of the curve in marketing on mobile wallets,” he said.
“Brands like Bloomingdale’s, Gap, McDonald’s, Sears, or Sephora have launched interesting campaigns. Airline companies too. Moving forward, I’d expect mobile wallets to offer opportunities for FMCG brands and financial services too.
“At the end of the day, by analogy with a physical wallet, what matters is the leather not the plastic!”
Going beyond apps
Forrester believes digital wallets will likely become rich marketing platforms with the capability to drive in-store traffic and sales, as well as result in higher conversion rates that could overtake mobile coupons.
More compelling features within wallets will also fuel consumers to use them more frequently, as only three percent of survey participants said they have leveraged one in a bricks-and-mortar retailer in the past three months. Forrester projects that many more brands apart from the early adopters will roll out mobile wallet campaigns this year.
The research company also tapped PayPal, Apple Pay and Alipay as the platforms to watch, as Alipay in particular holds significant disruptive power in Asian markets.
In the meantime, brands should work on identifying their existing wallets’ strengths and weaknesses, while pondering the best features to consider adding in to provide for a more cohesive engagement experience.
“I’d recommend brands start mobilizing their offerings and think of how they can leverage mobile in the customer journey,” Mr. Husson said. “They can already add value in their own integrated apps but moving forward if they want to scale, they will have to engage consumers via mobile wallet app aggregators.
“The mobile wallet ecosystem is likely to evolve significantly in the coming months and years. No matter who will won the mobile wallet war (not just one player by the way), marketers must add value beyond payments and facilitate the shopping experience.”
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York