Clearly, it is convenient for the customer to have all their banking in one virtual mobile wallet. There are quite a few flavors of digital wallet out there. The most extensive ones can also carry over 1,000 loyalty “cards”, offering the owner an unparalleled ability to manage their portfolio of loyalty memberships, special offers and privileges. Now we will discuss how you as a retailer or a service provider can also capitalize on the use of mobile wallets by your customers, as well how the customer experience can be improved via an e-wallet. There is a cost attached and work to be done to seize this opportunity, but the competition is doing it right now. You cannot afford to miss the boat.
New Levels of Customer Intimacy
We are constantly reminded that this is the age of the customer. Segmentation is so last century; now you need to understand each customer’s preferences at a personal level. Previously this was just not possible, but the emergence of the smartphone allows us to understand how, when and why each customer engages with our brand. Do they shop in-store or online or a mixture of both? Do they use our catalogue and discounts? Do they use the store as a showroom and buy from us online? Do they presumably use our store as a showroom and buy somewhere else? We can apply new technology such as facial recognition to assess reaction to a particular display or product. We can send messages to their phones with special offers based on their historic basket or what we already know about them. The only limit to the information we can gather is the understanding of what constitutes an invasion of privacy. What the customer decides is private to them and how much value is placed on the information is also unique to that customer and their demographic, as we discussed in Part 2.
Is there any evidence that a mobile wallet will increase customer loyalty?
Indeed, the evidence is overwhelming. Customers enjoy the ease of managing their loyalty programs using a digital wallet.
- According to Points 4% of consumers surveyed would use a mobile wallet more frequently if they could earn or redeem points and miles with every purchase
- 6% of consumers are likely or extremely likely to shop with a retailer that allows them to earn points and miles in their favourite loyalty programs
- Vibes, in their mobile development research, reported on the success experienced by one of their retailers: “Retailer B had activated their mobile website with instant ‘tap to save’ mobile wallet coupons in anticipation of more than half of their web visitors coming to their website via mobile in 2015. Their mobilized coupons were an instant success, driving a mobile attributed revenue lift of $250,000 per week. Ultimately, they saw more than $2 million in incremental revenue in three months and a projected $15 million in mobile attributed revenue, annually.”
- Aimia, the loyalty program company, researched the uptake of mobile wallets across a range of countries in 2016.
Clearly, there is nothing to be lost in implementing a sound digital loyalty program that can be loaded into your customer’s e-wallet.
Tailoring a Winning Loyalty Program
In brief, this starts with enabling NFC (near-field communications) in all of your stores. You should then take a good look at your current loyalty program and revamp it for a truly mobile experience. You could engage specialists in ecommerce development to assist you with the design and implementation of your offering, and your loyalty program vendor will have all the latest tips and tricks for you. There is plenty of research on what the consumer wants from companies such as Points and Aimia, which will help you get up to speed.
Set Out with the Program: Enable NFC in Your Stores
Mobile wallets don’t have cards, the customer just taps their smartphone on the POS (point of sale) device. This works both for loyalty card updates and payments, and is quicker than a card swipe or insert. The first requirement is to enable NFC (near-field communications) transactions in your stores. This may require an upgrade to your POS machines, which your vendor should be able to manage with ease. Then inform and educate all your frontline staff about how cardless payments work, and that you can now accept them.
Assessing Your Current Loyalty Program
The introduction of e-wallets has given the customer the ability to subscribe to new programs without the overload of managing points, discounts and other features manually. You can expect that digitizing your program will lead to new subscribers. This is the time to review who your target market is (and will be) and whether your offerings are attractive to all. This means that you should build different profiles based on age and lifestyle. Retirees and Millennials are looking for different benefits and experiences. If you have been experiencing disappointing take-up on special offers and promotions, your customer engagement model may need a revisit.
Defining Your Loyalty Strategy
Often when campaigning for new businesses, companies neglect their existing loyal customers. You also want them to move to the digital offering, but there may be some who do not want to take up an e-wallet. In the Aimia graphic above, you will see that mobile wallets are not big in Germany, because generally Germans favor cash over plastic. You will also need to create awareness among your employees to spread the news to customers. Maybe you want to run a pilot at a single store before you go countrywide. Define KPIs for measuring the ROI of the change, with values such as:
- New customers attracted by the digital loyalty program over the next 6, 12 and 24 months
- Existing customers who convert over the next 6, 12 and 24 months
- New loyalty members attracted by age group
- Growth of new customers in key target market(s)
- Reduction of pressure at checkout points
- Increased take-up of discounts
- Increased take-up of special offers
- Increased footfall, visits per month and basket contents per store
Design and Build Your Digital Platform
It is advisable to leave this to experts, rather than burden your own IT department with the responsibility. You should look for a company that has experience in mobile application development, even though you do not necessarily need a mobile app to drive the loyalty program.
Your loyalty program partner must obviously be involved throughout, and will help you build a campaign to inform existing clients of the new and exciting offer and how to move to a mobile wallet, if they have not done so. Make sure all your metrics are in place.
Launch and Anticipate
As stated above, maybe this is a pilot project at a single store, which gives you the opportunity to fine-tune the new offering, or perhaps your legacy program was close enough to the new program to launch at all stores. You can get rid of the time wasted at checkout, where your employee has to ask every single customer if they have a loyalty card (although there will be a period where they need to draw the customer’s attention to the change), thus improving the customer and employee experience. See how long it takes you to meet your ROI via the KPIs you defined, and you will also have an enhanced retail experience.