In the past year, the phrase “retailer wallet” sprung into our buzzword lexicon, as several high-volume retailers launched their own “Retailer Pay” applications. Think Walmart, Exxon, Target, Dunkin’ Donuts, Kohl’s and CVS, to name a few. Clearly, the retailer-branded app is emerging as a credible payment method. It's one that will help retailers “take back” customers who have become accustomed to using POS systems. Prior to this technology, shoppers had very few choices, besides third-party payment methods (Apple Pay, VisaAndroid Pay, etc.,), for mobile payments at checkout. However, payment is but one utility, and increasingly, retailers are seeing their branded apps with a new set of eyes.
This year we’ll see the emergence of what might be called the “Super App,” a hyper-utility retailer app that brings a deeply personalized in-store shopping experience to consumers. With a “super app” it becomes the point of personalization: everything flows from that—from the phone to the cloud and back. And, of course, any modern app must have a built-in payment capability—but that’s just one utility.
The point is: we live in a connected age, where virtually every customer is carrying a smartphone. And while POS systems made sense before smartphone ubiquity, they are now dated. Today, the mobile device screen is what the shopper is most comfortable navigating. Shoppers need access to all their information on that device. It’s private, convenient, and usually works much better than any POS screen.
Add to that, a consumer’s loyalty extends to about 5-7 neighboring brick-and-mortar merchants; and that normally addresses 60-80% of their day-to-day transactions. Loyal customers frequent these retail stores enough to have figured out the retailers’ loyalty programs, layouts, sales cycles, etc. The apps from these merchants are what shoppers will likely download and use. And they’ll use them for a lot more than payments—given the opportunity.
To get an idea of where the retailer-branded app is headed, look at companies like Starbucks and Uber. Both of these brands let you pay through their mobile app, but they offer more utility than just payments. For example, Starbucks lets customers use their app to order ahead, customize their order, and pay, providing convenience and utility by omitting the need to for loyal customers to wait in line. Similarly, Uber handles frictionless payments, but it also provides additional utility by showing the ride fare up-front, while letting customers track drivers’ locations and contact them. Five years ago, people hailed cabs; and today those same people are using a mobile app to catch a ride, because the app provides them with great value, utility, and experience.
Retailers are taking note: if the retailer app works as a complement to the customer’s shopping experience, and actually makes their shopping journey easier, cheaper and more delightful, shoppers will use the app—payments included. With it, the retailer can identify and authenticate each shopper. And by doing so, they can also create a complete, deeply personalized shopping experience. The app becomes an extension of the retailer’s brand; it becomes their customer service, marketing, loyalty and rewards programs, while leveraging their brand partnerships, and enabling the retailer to gain complete control of the customer relationship.
Looking at retail shoppers’ mobile experiences and interactions with branded wallets through the narrow lens of payments just doesn’t add up, which is why third-party wallets are not getting traction. Moreover, the branded app is giving retailers the opportunity to take back control of the customer relationship, and to redefine the entire in-store and check-out customer experience in a new way. Retailers no longer need to rely on a third-party that establishes rigid rules around a specific type of transactional engagement with a shopper, nor do they want to face the financial burdens of forced implementations, maintenance, or hardware upgrades.
The time has come for retailers to reimagine the shopper engagement experience; and the retailer-branded “Super App” is the tool that will make this possible. The retailers that seize this opportunity will win by providing their customers the convenience, personalization, and value they desire. Those that don’t will see customer loyalty shrivel, as long-time customers swipe right to choose the retailer that knows and serves them better.