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Editor's note: This commentary was originally published in the latest RCE Top 100, which is produced annually by Mobile Payments Today sister publication, Retail Customer Experience.Download a free copy of the report.
If 2015 was a defining moment for mobile use in retail, then 2016 showed the industry what is possible as merchants continued to fine-tune their app experiences for consumers.
And they will continue along that path well into 2017 and beyond.
One of the bigger trends to emerge in 2016 was payments becoming a larger focus for retailers as they attempt to keep customers within their apps for the entire shopping experience.
CVS, Kohl's and Wal-Mart all added QR code-based payments to their respective mobile apps in 2016. Target now reportedly will do the same.
Name-brand retailers realize what is at stake when turning their mobile apps into a one-stop shop for customers. This approach keeps consumers connected to the retailer throughout the shopping experience.
So, why not add a payments option to the app and complete the loop?
"GfK's FutureBuy research in the U.S. shows that 1 out of 3 shoppers, 37 percent, use their smartphones to shop in-store; but when it comes to paying in a brick-and-mortar setting, consumers use mobile payments for only 2.2 percent of transactions, representing a massive opportunity gap," Tim Spenny, vice president of financial services consulting at GfK Research, wrote in a 2016 blog post for Mobile Payments Today.
The Merchant Customer Exchange once existed to fill that gap.
When MCX shelved its CurrentC mobile payment system in 2016 after multiple false starts, some of the biggest names in that consortium were left without a clear mobile wallet strategy. But retailers such as CVS, Dunkin' Donuts, Subway and Wal-Mart all moved forward with mobile-payment plans.
Target is about to do the same, and don't be surprised when more retailers take this approach in 2017.
Another trend retailers should watch in 2017 is how consumers use their smartphones in retail situations.
Retail Customer Experience surveyed consumers and found some 49 percent of respondents used a smartphone to conduct a product search in a retail situation. Thirty-nine percent of consumers use a mobile device as a price-comparison tool.
The biggest surprise from the survey: 31 percent of respondents do not use a mobile device in a retail environment. That figure should concern retailers for a couple of reasons.
Firstly, if consumers are not using smartphones in a retail situation, then they might be unaware of a retailer's mobile app. And if they're unaware of the mobile app, they're probably missing out on coupons and discounts that could drive more overall spend during each visit.
Secondly, the retailer is missing out on extended face time with customers. One of the more significant trends in the banking industry is an attempt by financial institutions to keep their customers within the “four walls” of the bank through digital channels. Retailers also should use this
approach and give consumers a reason to do so with features that keep them engaged throughout a store visit.
Finally, if retailers doubt the power of mobile with today's consumers, let's examine some of the holiday shopping numbers from 2016.
Between Nov. 1 and Dec. 31, some 50 percent of holiday website visits came from mobile devices, including smartphones and tablets.
PayPal said that in the five days from Thanksgiving to Cyber Monday it processed more than $2 billion in mobile payments, accounting for one-third of total payment volume for the period.
"Mobile is going to drive the future of payments," PayPal CEO Dan Schulman said. "You're going to see a lot more volume driven by retailers rethinking their approach … and using mobile to compete with the likes of Amazon."
You probably won't find a better endorsement for mobile in 2017.