As we get into the full swing of 2016, it’s interesting to see some of the key mobile trends that thought leaders are predicting for the year. Here are a few which caught our eyes:
“MOBILE APPS KILL COUNTERTOP CHECKOUT
Question: What’s the biggest friction consumers face paying for things in a store?
Answer: Standing in line waiting to checkout.
And all of the mobile payments apps in the world that substitute a tap for a swipe (and now the dreadful dip) won’t change that. In fact, it might even make it worse since there are so few locations where consumers can transact that way that it simply introduces more uncertainty, confusion and friction.
It’s well known that mobile phones and connected devices allow consumers to do lots of things anytime and anywhere, including shop, and to do those things even standing inside a physical store. We’ve been talking about the blurring of the online and offline worlds now on PYMNTS for the last six years — and with our MPD clients, even longer than that. We don’t think that’s much of a news flash anymore.
But in 2016, we’ll see the offline/online distinction blur even further, even faster and even more broadly.
And start to kill off the countertop checkout in the process – in some categories much, much faster and in a very material way.
And that is a news flash.
Consumers increasingly won’t use their phones to look for stuff inside or outside of a store, and then walk into them and wait patiently in line to pay for those items using a plastic card like they’ve done for the last 60 years. Nor will they routinely stand patiently in those same lines and whack their phones or their watches against a POS terminal that can enable a contactless transaction.
They’ll instead leverage cloud-based apps to checkout on their phones inside the store – and use them increasingly to pay things that they want to buy before they even step one foot inside.
And establish preference for the merchants that enable that experience.
That’s exactly the experience we’re seeing take off like a rocket ship in QSR, in many other traditional and even non-traditional retail formats and in the many connected end points that the Internet of Things makes possible.
And it makes total sense. That behavior replicates the habit that consumers have honed for the last 20 years while shopping online, and for the last seven, doing so via a mobile device.
In QSR, the impact is dramatic and in such a short time.
In less than a month’s time, Starbuck’s Mobile Order & Pay drove 5 million transactions a month and huge numbers of new downloads of its mobile app. Starbucks says that more than 20 percent of Starbuck’s mobile transactions are taking place this way now – and the service is less than three months old.
Taco Bell has seen 2 million downloads of its mobile app just because of that functionality. But there’s more. Consumers who order their burritos that way spend more, on average, about 17 percent more. It’s easy to click “yes” to the question “do you want to add side of beans to the order” online. Order ahead makes impulse buying a sport and that’s huge.
Domino’s Pizza now calls itself a digital company since 50 percent of its orders happen online. Pizza Hut says 40 percent of theirs do, too.
But it’s not just QSR where this checkout and payment transformation is happening.
Buy online and pick up in-store (BOLPUIS) is the hottest trend in retail. Ten percent – and growing – of Target’s online sales are done that way now. Kohl’s reports that 3 percent of theirs are, too – and the service has only been active for a few months. Retailers love it since the vast majority of consumers – 60 percent according to RetailNext — spend more when they get to the store to pick up their loot – on average, 30 percent more.
But here’s where it gets really interesting.
Walmart Pay just launched its mobile payments app which essentially mimics an eCommerce transaction at checkout – linking the consumer’s app to a QR code that not only triggers payment but also applies coupons, promotions and Savings Catcher and gift card balances. The phone can be inside a consumer’s pocket or purse – it isn’t even material to “checkout” once the consumer has been checked in via the app. Target is said to be toying with a mobile app that works in somewhat the same way. Macy’s, with PayPal, rolled out a checkout option that mimics a PayPal online/in app checkout in the store, with, it says, amazing results.
SAP and its connected commerce initiative brings together a variety of players to enable commerce at the gas pump without swiping at the pump or in the store – or even getting out of the car. And, of course, Amazon with its Echo ecosystem and dash replenishment system is all about giving consumers the ultimate cloud-based digital experience. All that’s required of the consumer is to ask Alexa to add Tide to the shopping list and it’s done.
Of course, countertop checkout isn’t going to die totally in 2016, or even entirely ever. Payments is a slow moving train, as we’ve seen. But in some categories, it will deliver a remarkable and dramatic shift in how consumers pay for the things they are buying from physical stores – paving the way for the retail transformation inside of the store that will happen in the years to come. The 2016 offline/online blurring trend isn’t about giving consumers an app that allows them to move seamlessly between worlds to shop but about giving them the ability pay that way, too.
Which will increasingly not be standing in a line at a counter – at least to pay.
From Mobile Commerce Daily:
“planet of the apps
According to Flurry, U.S. consumers spent more time inside mobile applications than watching television in 2015.
Despite the popularity of apps, app usage remains highly concentrated with the top five apps accounting for 80 percent of usage time, according to comScore.
Google recently announced that its search algorithms had been modified to include app search results. Amit Singhal, the company’s senior vice president of search, announced in October that Google had indexed more than 100 billion deep links within apps.
Adding app search results will have a profound effect on usage and discovery for apps.
It used to be prohibitively expensive to launch and market an app. Search makes that function much, much easier – much as it did for Webpages, in general.
Expect brands to launch even more apps, and use their apps as the go-to channel to build both community and loyalty, to drive engagement and purchase, and provide consumer-related services.”