Discount department store retailer Kohl’s launched its new payment application, Kohl’s Pay, across more than 1,100 stores nationwide ahead of the busy holiday shopping season.
Kohl's Pay allows the 25 million consumers who already have the Kohl’s branded credit card to make purchases with their iPhone or Android smartphone by launching the Kohl’s App and selecting Kohl’s Pay from the menu options to bring up a QR code reader.
Customers scan the code, apply any savings offers or Kohl’s Cash within the app, then tap to complete their purchase: The app automatically applies Kohl’s Cash and rewards points, and stores transactions on customers’ mobile devices for easy returns.
Kohl’s has struggled mightily in a turnaround that has now lasted years. But its Kohl’s Cash program, which the retailer previously integrated into its mobile app, has been a “brilliant” success, according to Shelley E. Kohan, VP of retail consulting at store analytics firm RetailNext.
“There’s something about the ‘Kohl’s Cash’ that drives the consumer to really plan their shopping around their Kohl’s Cash,” Kohan told Retail Dive earlier this year. “People are spending so much effort and time in converting, [Kohl's stores] have a strong bond with the customer and are known for that low price.”
The move to bolster the Kohl's app with mobile payment capabilities is very similar to Wal-Mart Stores' Walmart Pay, another addition to an existing retailer mobile app designed to make checkout more seamless and boost loyalty.
That leaves Target, which arguably has one of the most robust and successful mobile apps in retail with Cartwheel, but which hasn’t yet integrated its REDcard loyalty card. REDcard, which customers can use as either a debit card or credit card, gives users an additional 5% off purchases and provides free shipping on all online orders, and several experts expect Cartwheel to eventually include payment among its features.
As more retailers add payment options to their mobile apps, the option could be less effective in giving shoppers a reason to choose one retailer over another. But it will likely help cement loyalty among existing customers, especially if, like Target and Kohl’s, using the app gives customers added rewards or discounts.
This story is part of our ongoing coverage of the 2016 holiday shopping season. You can browse our holiday page for more stories.