Will Merchant Mobile Wallets Play Nice with Location-Based Marketing?

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CHICAGO — New mobile wallets like the Merchant Customer Exchange's CurrentC may find themselves in conflict with other high-tech mobile apps that came to market sooner.

At the heart of the issue is consumer fatigue. How many retailer applications will shoppers wish to use during a single shopping trip, and can they pay and redeem offers without having to open multiple apps?

Though MCX has long described its platform as one that would to integrate with existing retailer apps, but the wallet's design doesn't address emerging technologies such as Bluetooth beacons. Merchants in malls have even more complexity, since they must support their own apps as well as an app designed to encompass the mall itself.

“We know retailers are talking about their own apps and having a ‘virtual closet’ [for product research], and we could maybe introduce that to our app and integrate,"  said Emily Shannon, director of digital for the Mall of America in Minneapolis, Minn., during the annual RetailLoco conference last week.

MCX's CurrentC is, in effect, treating the entire U.S. as a giant mall. Individual retailers will have their own apps but will be expected to conform to the experience MCX is developing for all of its participants. MCX did not provide an executive for an interview by deadline.

One way location-based marketing teams are addressing the potential conflicts they have with other consumer-facing apps is by experimenting with temporary apps that remove themselves when the consumer is done using them, said Asif R. Khan, founder and president of the Location-Based Marketing Association.

“We have to be thinking about how many apps a consumer will download and then actually use,” Khan said. “Many of us have 50 apps on our phones and use two or three regularly.”

Mobile wallet apps and location-based marketing apps may end up in a struggle for consumer interest if they are not working together at the same time.

“Consumers don’t have a channel strategy; they have a shopping strategy,” said Jeff Fagel, chief marketing officer for Cofactor, a Chicago-based digital advertising company.

“It’s a huge problem for retailers that there is a growing number of messages coming to them over a growing number of channels,” Fagel added.

If mobile wallet providers haven’t considered what other services to include in their products, it’s becoming increasingly apparent that retailers are interested in making their online and offline offerings interact in the customer experience and payment options.

Mostly, retailers want their online and offline services to complement each other, using location-based marketing to pull online customers into the store and vice versa, Fagel said.

Regardless of which apps a consumer will choose to enhance the shopping experience, the app developers have to be on top of their game to avoid mistakes that will leave them out of the mix, said Sunil Marolia, vice president of product management for SmithMicro.

“The top attribute consumers cite for their apps is that it makes their life easier,” Marolia said. “They may be interested in promotions through location-based marketing, but they have to be relevant. Send out something irrelevant, and it kills your app.”

Retailers would be wise to “take baby steps into engagement” with consumers and spending more time learning about what they like and where they spend their money before barraging them with coupons, Marolia added. The other part of the equation is making sure your customer understands all of the benefits of downloading an app.

After downloading the Citi Private Pass credit card app, Marolia said he later learned when he was online that the card offered deals on concert tickets and special events.

“I didn’t get the card for that reason, but it’s just a great benefit,” Marolia said. “But I would want to learn about that through the mobile app right away.”

Citi would benefit from monitoring customer loyalty through an app feature like the price cuts on concert tickets, but missed a customer engagement opportunity, Marolia added. “I still had to go online to check out the details of that feature.”

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