The intersection of mobile and retail
Brick-and-mortar stores are rapidly adding self-checkout options usually linked to proprietary mobile apps, giving merchants more control over how payment options are presented.

Industry forces have taken notice. To simplify and streamline digital checkout processes, Visa and Mastercard in April said they’re working on a unified “buy button" for mobile and online payments. Details are scarce and the networks haven't announced a timetable. Now several retail industry groups plus a couple of debit networks formed the Secure Payments Partnership to drive cross-industry participation in discussions shaping payments security, competition, authentication methods and innovation.

Here’s a fresh look at the fast-changing role of retail mobile apps and how consumers are using them.
Chart: Shopping apps lead the pack
Consumers are spending at least three hours a day with their smartphones, and retail shopping apps are the fastest-growing major category among apps, according to the latest data from mobile technology analysis firm Flurry.

Overall mobile app usage grew just 6% last year over the previous year, but shopping app usage rose 54%. The music, media and entertainment category came next with 43% growth in usage, followed by business and finance at 33% and 20% for news. Mobile app usage for games fell 40% year over year, according to Flurry, which tracks billions of app sessions daily.
Chart: The connected generation
Most internet users claim to be unfamiliar with retail mobile apps, but younger adults are more likely to have shopped with a retailer’s mobile app, according to a survey CivicScience conducted this spring.

Forty-nine percent of respondents said they’ve never used a retailer mobile app, and 15% had no knowledge of them. But one in five have used a retailer’s mobile app outside of a store and 15% have used one inside a store, a promising sign for merchants working to bridge their sales channels.

Not surprisingly, younger and tech-savvier consumers are most likely to use retail mobile apps, according to CivicScience. About a third of millennials (aged 18-34) said they have used a retail mobile app when they weren’t in the store, compared with 23% of consumers aged 35-54 and 10% of those over age 55. CivicScience surveyed 1,808 internet users May 2-8, 2018.
Chart: Who's on top?
Measuring mobile payments usage can be tricky, because definitions and data-gathering methods vary widely. Comparing the popularity of Starbucks’ mobile app to Apple Pay, for example, is a false rivalry because of their differing aims and distribution models. But a recent survey by S&P Global Market Intelligence suggests one of the oldest digital payment apps—PayPal—still dominates over others for in-store purchases.

About 40% of U.S. consumers cited PayPal when asked which mobile app they have used to make a purchase inside a store. Other apps cited included Apple Pay, at 33%, with Android Pay, Samsung Pay and Starbucks’ app tying at about 20%. Branded retail apps like Kohl’s Pay and Walmart Pay came in at 17%, followed by Chase Pay at 13% and the Dunkin’ Donuts app at 11%. S&P Global Market Intelligence surveyed 904 consumers in 2017.
Chart: Paying their own way
Self-checkout—including new store concepts like Amazon Go that make the checkout process nearly invisible—is a fast-spreading global trend often pegged to mobile apps.

Walmart has been experimenting for the last three years with self-checkout and in-aisle assisted checkout, while supermarket giant Kroger this year is dramatically expanding its Scan, Bag, Go self-checkout system to more U.S. markets. (Walmart and Kroger are two major merchants that continue to eschew Near Field Communication-based contactless payments in stores.)

Most self-checkout systems leverage bar codes and are linked to users’ mobile apps that include a variety of payment options, including cash.

The vast majority of U.S. consumers seem to accept of the concept. Only 15% of respondents in a recent Field Agent survey said they rarely or never use mobile app-based self-checkout services. When asked how they’d react if their store offered only self-checkout, 11% said they would switch to a different store. Mobile marketing research firm Field Agent surveyed 2,029 U.S. grocery shoppers via its mobile app Jan. 25 and 26, 2018.
Chart: Brits prefer self-checkout
Self-checkout systems are more mature in Europe and Asia than in the U.S.

In the U.K., supermarket Tesco began experimenting with self-checkout in 2003 and in recent years it was installed system-wide, retaining options for cashier-assisted checkout. Some reports have suggested that consumers don’t like self-checkout, but a recent survey of 1,000 U.K. adults indicated most are happy with it, and 80% said they would prefer exclusively using self-checkout. Most agreed that technology helps speed the checkout process.

The U.K. survey was conducted by SOTI, a British maker of mobility technology. Whether or not consumers prefer to do their own scanning, it seems inevitable that most supermarkets will feature at least some self-checkout terminals for convenience and to cut labor costs.