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Pizza Hut exec: Apple Pay’s initial impact could be limited

LITCHFIELD PARK, AZ – Executives from several merchants at the Mobile Shopping Summit 2014 are split on Apple Pay’s near-term potential, citing both significant opportunities as well as challenges faced by the new payments scheme.

Apple Pay made a big splash when it was launched last week, with many in the mobile industry expecting it have a significant impact on driving wider of mobile payments. However, several limitations could mean the build will take longer than some are expecting, according to a Pizza Hut executive during the panel discussion, “Measuring Success In Mobile By Evaluating Performance Across Devices And Time.”

“I am more pessimistic about Apple Pay’s impact than most people here,” said Danny Sullivan, vice president of global digital experience at Pizza Hut, Plano, TX. “I had a call with Apple last week and right now it is only a payment system for apps.

“It is shut off from the mobile Web, which I think everyone knows is a bigger part of everyone’s business from mobile devices,” he said. “And, it is shut off from Android pretty much completely.

“It doesn’t work too far back on technology. I think it will take longer than most people think.”

The Mobile Shopping Summit was organized by Worldwide Business Research.

Removing friction
Another problem for mobile payments, in general, is that consumers are still not sure of the their value.

Additionally, while 22,000 retailers have reportedly already embraced Apple Pay, there are significantly more retailers accepting credit cards.

“I still don’t think the use case still hasn’t been made,” Mr. Sullivan said “It has been talked about in the industry for ever and, I do think it is inevitable.

“I think what will make it inevitable is when credit card companies stop sending you plastic cards,” he said. “That is not going to happen very soon.

“From a customer experience point, credit cards still work pretty well.”

Other merchants were more bullish, given the significant number of consumers Apple Pay has the potential to reach,

A Calvin Klein executive expects Apple Pay will help drive ecommerce conversions by streamlining the payment process and influence the mobile payments landscape.

“My instinct is it is a game changer,” said Brett Miller, vice president of ecommerce at Calvin Klein. “The alternative mobile payments space – I read there are 26 different ones – I think this one is going to be the tipping point in the whole process just because there are 500 million iTunes account holders, 22,000 retailers have already signed on and how easy it to go on iTunes and buy something.

“I think it is going to remove a lot of friction,” he said. “I think it is going to change the whole landscape of the payments processors and improve the conversion rates, particularly for retailers.”

Driving consumer awareness
Other factors pointing towards Apple Pay’s potential impact include that it works with credit cards and many retailers are in the process right now of updating their POS systems to contactless terminals that can process NFC payments.

Additionally, Apple is likely to put a lot of marketing power behind Apple Pay, which will help educate a lot of consumers about mobile payments. Other interested parties are also likely to market Apple Pay.

“We have been talking about mobile payments, mobile wallets for a long time but, the general consumer may not be aware of it,” said Andy Chu, divisional vice president of mobile commerce at Sears Holdings Corp. “Having Apple getting into the game and bringing a new level of marketing awareness across the consumer segment will be interesting.”

“Will see retailers promote that they are part of Apple Pay,” he said.

Better app experiences
The panelists also focused on how retailers can move past simply driving downloads for their apps to engaging customers on an ongoing basis.

A year ago, retailers were focused on downloads but increasingly, their focus is shifting to using apps for retention and driving engagements through push notifications, deep linking and other tactics, per Evan Schwartz, CEO at ActionX.

Zillow is excited about Apple Watch, having launched it first integration with Android Wear recently.

While smart watch experiences right now are reaching a small group of early-adopters, Zillow expects them to play an important role going forward by enabling users to run around a neighborhood, get notifications about houses and speak into the app to take notes.

One way Zillow is looking to drive better app experiences is by embracing the new Continuity feature in iOS 8 that enables a better cross-channel experiences.

“One of the cool things we are looking to invest is the Continuity handoff with iOS 8,” said Jessica Scheibach, senior manager of mobile apps at Zillow. “We have a lot of people searching on tablets who then get in the car, grab their phone open up the app.

“[This will bring them] exactly where they were on the tablet,” she said.

Final Take
Danny Sullivan is vice president of global digital experiences at Pizza Hut, Plano, TX