It's all about the rewards
Only 15% of consumers currently have a merchant wallet on their phone, and 67% of those say they use the wallet almost always when shopping at that merchant’s store, according to a recent survey by First Annapolis Consulting.

Starbucks, which introduced its mobile payment app in January 2011, is the most common merchant wallet app, cited 62% of consumers who have downloaded one, with Walmart Pay and the Dunkin' Donuts mobile app a distant second and third in popularity, according to First Annapolis’ survey of 1,514 U.S. consumers in January 2017.

But it’s not necessarily speedier and more convenient payments or notifications that motivated consumers to download merchant wallet apps. It’s all about the rewards. More than 75% of respondents who use merchant mobile apps receive rewards as part of their mobile wallet usage and two out of five said they would not have downloaded the app without rewards.
Retail mobile apps aid shoppers
More than half—51%--of consumers still do most of their shopping inside brick-and-mortar stores, but digital commerce channels are gaining influence, according to TD Bank’s latest Retail Experience Index. Overall 34% of consumers said they do most of their shopping online, and millennials between ages 18 and 34 led the way among online shoppers.

Significantly more online shoppers said e-commerce beats using a retailer’s mobile app because of the ability to make purchases at all hours and avoid lines and crowds, but the benefits of shopping online versus using a retailer’s mobile app narrow when it comes redeeming coupons and promotions. Among respondents using digital channels, 58% cited online as the best way to snag deals, versus 51% who preferred retailer mobile apps. TD Bank’s Retail Experience Index is based on a survey of 1,021 U.S. consumers in December 2017.
Merchants are still experimenting with mobile apps
As new mobile app technologies evolve, merchants are eager to test different designs and approaches to see which are most effective for consumers. Nearly a quarter of merchants, or 24%, plan to apply A/B testing methods to decide how to enhance mobile apps with new technology in 2018, according to a recent survey of 106 retailers by TD Bank.

One in five retailers aims to use new mobile app technology next year to develop better methods for tracking customer behavior, while 18% plan to apply new technology to enabling mobile payments, according to TD Bank’s survey. About 13% of merchants plan to focus on improving their rankings within online search engines, while 11% aim to apply new technology to customer retargeting, and 6% will look into new technology to support the Internet of Things.
Retailer mobile apps lag big wallets
Mobile wallets that let consumers pay for an entire basket of goods with a smartphone have been evolving gradually over the last few years, with each supporting payments in their own unique fashion. Overall usage remains low—just about one in five consumers has used a mobile wallet for an in-store payment—in part because the technology for each varies widely.

Broad contactless mobile wallets arrived in late 2014 with Apple Pay, followed within months by Android Pay and Samsung Pay, with digital wallets from the card networks and major financial services players evolving simultaneously. Merchants followed with Walmart Pay (late 2015) and Kohl's Pay (2016), and Target Wallet launched this week.

Mobile wallet usage isn't a zero-sum equation, because consumers will use more than one due to different device requirements and levels of merchant support. But a study of 800 U.S. debit card users by Auriemma Consulting Group mid-2017 shows that among those using a mobile payment app within the last month, Apple Pay is still enjoying the results of its early start, while Walmart Pay's relative popularity reflects its reach as the nation's largest retailer.