CHICAGO — The combination of location-based marketing and mobile wallets is relatively new territory for merchants and consumers, bringing these two parties so close together that they may start to overlap.
Retailers are increasingly turning to technologies that bring communication and payments away from the checkout counter and into the aisles and, in some cases, shoppers' pockets. This blurring of the lines has the potential to be “incredibly powerful,” said Brent Hieggelke, chief mobile evangelist at Urban Airship.
The true benefit comes when retailers can detect a shopper's location in or near a store, send a location-aware offer and accept payment through a mobile wallet such as Apple Pay or Android Pay, Hieggelke said Oct. 22 during the 2015 RetailLoco conference.
Rather than focusing only on the traditional hardware terminal, retailers are increasingly viewing the consumer as the point of sale. But as powerful as this vision is, it is difficult to execute and there are risks in taking mobile technology too far too fast.
A retailer with an array of products that would interest a customer at different times of the day has to have an effective location-based marketing program in place, said Russ Fiegler, senior marketing manager for Pepsico.
“If we know our customer goes to the gym in the morning, we can remind him to purchase our bottled water,” Fiegler said. “If he stops at Starbucks later in the day, maybe try our tea, and if we know he goes to a softball game at night, an energy drink or other Pepsi products are best.”
The key to success is viewing this interaction as a two-way communication rather than as one-way marketing, Fiegler said. “We can’t hit people over the head with offers, it has to be more of a conversation with the customer with relevant content.”
The consumer's decision to activate the mobile wallet or connect to a store's beacon represents a willingness to take part in this conversation. This is a much more powerful starting point than putting a sticker on a store's window proclaiming that it now accepts Apple Pay.
Initially, mobile wallets “solved a non-existent problem,” said Christina Garcia, vice president of technology and solutions at mobile wallet provider SEQR USA, a division of Stockholm-based Seamless.
“At SEQR we had to go well beyond just payments by providing value-adds, and not just coupons and loyalty,” Garcia said. The company had to create “new spots” for retailers to interact with shoppers.
The SEQR wallet lets consumers scan a QR code at the point of sale to make a payment, but it also lets retailers put QR codes on their displays to allow consumers to initiate the payment from anywhere in the store, she said.
If consumers have been unenthusiastic about mobile wallets, it's because those wallets are “touching just one piece of the shopper’s journey at the very end,” Garcia said. “They key for wallet providers will be to partner with every retail brand possible and really interact with the consumer.”
Still, retailers advancing with geo-location marketing have to be cautious about which types of alternative payment methods they adopt, said George Findling, director of emerging technology for Crate & Barrel.
“We know we can’t just go with every option out there,” Findling said. “We tried a mobile wallet, but adoption was not good, and then we were reluctant to adopt [Near Field Communication] right away.”
Crate & Barrel is rethinking that stance now that more customers have been asking about Apple Pay acceptance, Findling said. Apple Pay rides on traditional credit card rails and uses NFC to enable contactless payments; Apple's wallet also supports in-app payments.
“We have some new thinking about Apple Pay now,” Findling added.
Retailers may be less apprehensive about mobile wallets when they fully embrace the marriage between those wallets and the marketing data they provide about users.
As a consumer, Garcia said she wants to be treated differently from other shoppers. “You can’t treat me like Bob or George; you have to know more about me.”