How to Win Mobile Wallet Marketshare
It is no secret that mobile wallets are trending upward for the foreseeable future. According to a recent report by Transparency Market Research, the global mobile wallet market is forecasted to reach $1,602.4 billion in five years, growing at a compound annual growth rate (CAGR) of 30.7 percent from 2012 to 2018.
During the past year, the time that consumers spent using retail apps quintupled, and quick-serve mobile apps like those from Starbucks and Dunkin’ Donuts have continued to earn greater acceptance. During its March 2013 Shareholder meeting, Starbucks shared that the Starbucks Mobile app, with 10 million-plus active users and accounting for 3 million-plus weekly mobile payments, will be relevant in new areas. Specifically, new program innovations include multichannel and multibrand participation. This expansion is expected to contribute to a rapid and substantial increase in MyStarbucks Rewards membership, doubling its active members from 4.5 million at the end of October 2012 to approximately 9 million by the end of fiscal 2013.
Consumers are voting with their phones, rewarding mobile wallets that deliver value with adoption.
Now is the time for quick serves to be building an active mobile wallet strategy. As the competition for mobile wallet market share increases, the next 12–18 months are crucial for operators to drive the adoption of mobile payments and mobile wallets by providing customers with value, engagement, and ease of use.
Setting the mobile wallet up for success
The key factor to winning a share of the mobile wallet is customer experience. Consumers want an intuitive experience that is well thought out and provides engagement. To be successful, the mobile wallet must meet and exceed consumer expectations; otherwise, it will be quickly dismissed.
Simply thinking about the moment the consumer is standing at the POS is not adequate. Quick serves deploying a mobile wallet must consider the entire process that the user goes through when determining how one makes a purchase. Being able to make a payment with the mobile application is not enough—consumers want to be courted during the buying decision and rewarded for their loyalty.
Operators must focus on the entire user experience of potential wallets and answer these questions: Is it easy to navigate? Is it reliable, working every time, flawless and seamless? Is it fast? Does it provide consumers what they want and need? Can staff members in the store manage processes and answer questions?
The truthful answers to these questions are vital. Consumers who have a bad experience on a mobile wallet will quickly delete the application and rarely ever give it a second chance. (That is, if you are lucky—bad reviews and negative word of mouth can ruin a launch before its campaigns even begin.)
The Disney effect
Quick serves can benefit from looking at companies outside their immediate vertical that excel in customer experience. While the company’s offerings may vary, customer expectations do not, and similar steps can be taken to ensure success. Here are a few examples.
Walt Disney World is known for being a magical, happy place. Disney has a reputation for providing a positive customer experience and continually upgrades procedures to surpass expectations. Recently, the company announced it would be transitioning to NFC-based payment, loyalty, and admission known as MyMagic+.
Chase recently shifted its focus from being the low-cost provider of credit cards to ramping up customer experience. The company acknowledged that its focus previously had not been about the customer experience, but quickly realized that it should be. To aid in the transition, Chase hired executives from American Express, a credit card provider known for its optimal level of customer satisfaction.
Singapore Airlines is recognized for its leadership in providing innovative customer service. It’s analyzed all the steps customers take, including those before getting on board the aircraft, and encourages all employees to be diligent in their efforts.
The common element in these success stories is the ability to control the operational factors of the customer’s journey. These companies are not content with the customer experience they offer. Instead, they constantly research ways to improve upon their processes. Likewise, today’s quick serves must be acutely aware of popular trends in technology, like the rise of mobile wallets.
After customers’ purchasing experiences are carefully analyzed and addressed, operators can leverage mobile wallets to encourage repeat usage. There are two good ways to do this. The first is by adding new features to an app, which not only provides customers with the answer to "what’s new" and "why should I use this app?" but is also a golden opportunity to increase active engagement. The second way is by supporting a dynamic feature, such as a loyalty program that automatically updates every time a customer makes a purchase. This will provide increasing value and keep people coming back.
This year is an important year for quick serves in the mobile payments race. Most consumers will only have a handful of apps on their devices that they actively engage with. Mobile Wallets that deliver value and engagement, and which are operationally flawless, will resonate with consumers who are open to shifting their purchase decisions and overall loyalty. The time is now for operators to deliver innovative, useful apps that take their rightful place on consumer phones and in consumer minds.
Since we can rest assured that the mobile craze is not fleeting, quick serves must understand that the mobile application they offer can significantly impact their consumer relationship. Today, quick-serve businesses are in a position to win a large portion of mobile wallet market share if they follow the right steps. Breaking out as an industry leader with mobile wallets will position select operators to grow their customer base, improve ticket size, and develop loyalty during a time when such attributes can be rare.
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