Walgreens is streamlining the in-store checkout process as the first retailer to intertwine Apple Pay with its loyalty program, enabling customers to scan only once to pay and receive rewards.

Data has shown that interest in mobile payments is low, but mobile wallet services which provide rewards programs is much more desired amongst consumers. Walgreens is looking to drive sales with the Apple Pay-loyalty integration following a series of successful mobile wallet incorporations for other retailers.

“This loyalty integration aligns with Walgreens’ goals to deliver a seamless, frictionless customer experience,” said Mark Tack, vice president of marketing at Vibes. “It also enables Walgreens to use Apple Wallet as a marketing platform to drive in-store foot traffic, increasing basket size and improving loyalty.

“Companies that are using mobile wallet marketing are seeing incredible results,” he said. “For example, Pep Boys, which allows customers to save all coupons to Apple Wallet or Android Pay from PepBoys.com, has found that 30 percent of its mobile wallet offers added to mobile wallets were redeemed in-store.

“Another example is Men’s Wearhouse, which has seen a ten time increase in in-store redemptions from email marketing campaigns with a Save to Wallet button. By incorporating their loyalty program into their mobile marketing strategy, Walgreens can expect to increase traffic and sales in its stores.”

Mobile pay rewards
Walgreens Balance Rewards members can now earn points while simultaneously paying through their mobile phones, without any extra steps. Many users let miss out on rewards opportunities for an easier purchase transaction, but now Apple Pay users will no longer have this issue.

IPhone users input their rewards information through the program and while paying within a Walgreens’ bricks-and-mortar location they only need to scan their Apple Pay barcode once to get credit for their purchases in the loyalty program. In the past, members had to complete their purchase separate and also scan their loyalty card or bar code, creating a longer checkout process.

The drugstore chain is likely hoping to ramp up sales after the decision to shut down many bricks-and-mortar locations following its big purchase of competitor RiteAid. Users with iPhones 6 and up are able to leverage Apple Pay.

The retailer is hoping to create a frictionless customer experience while at checkout. The innovation is in response to customer requests, with many consumers expressing interest in the connection of rewards with Apple Pay.

This may be the first instance of rewards integration with Apple Pay, but it is likely not to be the last. Although mobile payments have been slow to take on, advancement in this area is still gaining speed and rewards integration may be the next step for retailers using Apple Pay.

Apple Pay
This is one of many big things happening for Apple Pay recently. For instance, American Express is foraying into Canada and Australia with Apple Pay this year, and bringing the solution to more large markets in 2016, a reflection of the mobile payments boom with developers and financial services (see more).

However, while Apple Pay’s adoption rate so far is encouraging, the solution faces resistance in many countries, is viewed as a threat by some banks and still needs to prove its value for merchants, according to a new report from Forrester (see more).

“At Vibes, we believe the true opportunity for consumers and retailers is on the non-payment side of mobile wallet,” Mr.Tack said. “A recent Forrester report found that consumers’ number one requested feature for mobile wallets is loyalty programs and points and rewards, closely followed by coupons, discounts and special offers.

“Interestingly, payments were the least requested feature,” he said. “This data points to the importance of retailers like Walgreens mobilizing their loyalty program and coupons, as it will drive usage of mobile payments.

“For retailers, enticing customers to manage their coupons and loyalty points/rewards in Apple Wallet puts their brand in close proximity to their customers’ credit cards, valuable real estate for any marketer. For consumers, this adds convenience because they no longer have to carry around all their plastic loyalty cards.”

Final take
Brielle Jaekel is editorial assistant at Mobile Commerce Daily