Consumers tend to be positive about loyalty programs, mobile ads, and chatbots and they like making a purchase from a smartphone, though they were somewhat reluctant to change their payment habits when mobile wallets appeared years ago.
Retailers like Starbucks and Dunkin’ Donuts are succeeding thanks to their mobile wallets and corresponding loyalty programs. These merchant wallets are leading the overall mobile wallets industry as they offer innovative features such as rewards programs, coupons, mobile order-ahead, and custom marketing.
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According to BI Intelligence, there are several factors that add to the success of these mobile wallets with the help of which retailers can most effectively enjoy increased sales, traffic, and average ticket size.
These factors are associated with the following:
- The mobile wallets of retailers who have large addressable user bases who are loyal and act as repeat visitors will go on to be popular with consumers, especially as merchants aren’t quickly adopting near-field communication (NFC) technology, as well as there are weak offerings by universal mobile wallets such as Apple Pay and Samsung Pay.
- Loyalty programs will play a significant role in retailer mobile wallet adoption. Companies like Starbucks and Dunkin’ Donuts have been able to use their loyalty programs to maximum advantage to acquire mobile wallet users. This has resulted in store traffic and conversion rates.
- If these programs are leveraged, sales are likely to increase at a 5-year compound annual growth rate (CAGR) of 68%.
- There will be increased competition in the field and the adoption will begin to slow down by 2020. Universal mobile wallet players begin to add effective loyalty programs and coupons to their offerings, so adoption for retailer-based mobile wallets is expected to decelerate because these offerings are their main marketing points.
According to Sophie Vu, chief marketing officer for Chicago-based Vibes, a mobile engagement consultant and researcher, the mobile wallet is interesting in that people think of it mainly as a payments vehicle, after all “Pay” is in the name of most of them.