Digital payments apps are nothing without an integrated loyalty scheme, says Steve Rothwell, founder Eagle Eye Solutions
The excitement around digital wallets and touch-payments has been building for a while now – the advent of Apple Pay paved the way for a whole raft of others to jump on the bandwagon.
Surprisingly enough, a survey conducted in 2015 revealed that only “3% of Apple iPhone 6 users were regularly using the contactless payment system to buy products in stores”.
While the concept of paying for items by simply tapping your phone at the point of sale seems ‘cool’ and somewhat futuristic. However, what is the point?
Today’s consumer demands convenience when it comes to the shopping experience. But more importantly, they expect added value.
It is true that digital payments are convenient – but more so than contactless card payments?
So the question remains, are these digital payment apps really as revolutionary as their creators would have us believe?
The simple answer is no, not really.
For retailers, the key isn’t just providing a stress-free shopping experience but also giving something back to the consumer. This is the only way to foster brand loyalty by adding value to the experience. This is why a digital payments app is nothing without an integrated loyalty scheme.
Recent statistics from Planet Retail show that the choice of retailer for 32% of shoppers is influenced by the provision of tailored, personalised experiences that are relevant to their needs.
For a consumer pulling out a mobile phone is no easier than pulling out their plastic, contactless debit card. In some cases, taking out the mobile phone, unlocking it and opening up the relevant app is actually more time consuming.
If the loyalty scheme and the digital payments app can be combined, then the consumer is not only getting a convenient experience but also building loyalty points and receiving promotions or coupons.
Take for instance the Greggs Rewards app.
The app was introduced by Greggs in 2014 with the aim of driving footfall into store as well as strengthening brand loyalty. The launch of such an app was a revolutionary move in the food on the go sector and meant that Greggs customers could pay for their food, collect loyalty points and redeem any existing offers through one simple swipe of their phone.
The full integration of digital loyalty scheme with the digital payment capability gave the customers a convenient shopping experience while also providing Greggs with invaluable basket data in real-time. It is with this data that Greggs can then target customers with relevant, personalised offers in accordance with their purchasing habits. This adds value to the shopping experience, in turn strengthening brand loyalty.
Tesco Bank also appears to be following suit with the upcoming launch of their new digital payment app. As opposed to Apple Pay or Samsung Pay, the Tesco Bank app will be fully integrated with Clubcard to ensure loyalty points are contained within the digital wallet.
There is little doubt that digital wallets are here to stay and whether we like it or not, they will become increasingly common.
The challenge for the retailer is to ensure they can maintain the personal engagement with their consumers while adding value to the shopping experience – those that don’t will quickly find themselves drowning among the competition.