Retailers shouldn’t only seek to take money out of a shopper’s wallet, they should also live in a consumer’s wallet.
Their digital wallet that is. That’s the advice from mobile commerce vendor Urban Airship Inc. in its recently published study “The State of Mobile Wallet Marketing.” The study surveyed 1,000 U.S. and 1,000 UK smartphone-owning adults between May 31-June 3 about their mobile wallet and retail loyalty program use. Of the survey respondents, 72% belong to between 1 and 5 loyalty programs, 19% belong to six or more, and 8% belong to none.
A mobile or digital wallet is a place in a smartphone, often in an app, that stores credit or debit card information. Consumers can also store loyalty cards in digital wallets. Consumers can use mobile wallets to pay for purchases, store coupons and discounts, apply loyalty rewards at checkout, and store digital tickets, such as an airplane boarding pass or movie tickets.
54% of consumers have used a mobile wallet , and 30% have used a mobile wallet within the past week, according to the study. Millennials, or consumers ages 18-34, are more likely to use a mobile wallet, as 67% of the millennial survey respondents have used a one in the last three months, compared to 51% of Generation X consumers (consumers ages 35-54 ), and 28% of Baby Boomers (consumers older than 55).
The most common uses of mobile wallets is to store digital loyalty cards, as 60% of the consumers who have used a mobile wallet say they use it for that. Coupons are the second most popular function, at 53%, and 23% of respondents say they have used a mobile wallet for a mobile payment via a credit card. Respondents could pick more than one response.
Retailers should take note of mobile wallets, according to the study, as it is a way to boost use of their loyalty programs. 69% of consumers say they are more likely to use a loyalty card if it is on their smartphone.
Retailers should also think beyond just having a loyalty program within their own app or in a separate app, such as Walmart.com’s Walmart Pay, but allowing consumers to store coupons digitally in other mobile wallets, such as in Apple Wallet (formerly called Passbook) and Android Pay. Doing so will help merchants reach more consumers, say Judy Chan, senior product marketing manager at Urban Airship.
“Mobile wallets from the platforms come pre-installed on newer devices, and the barriers to get someone to install a loyalty card or coupon are much, much lower than getting them to install your app,” Chan says. “This is a path with massive potential for retailers to greatly expand their addressable mobile audience.”
In addition, 64% of consumers say they are more likely to use a coupon if they received an expiration date reminder and 63% say they are likely to go into a store if they receive a coupon expiration reminder when they are near the retailer.
Physical loyalty cards, however, are not dead. In fact 75% on consumers always (33%) or often (42%) use them. 21% sometimes use them and 4% rarely use them. Of consumers that don’t always use them, 43% say it’s because they don’t bring the card and 40% forget they are a part of the program.
Consumers also prefer to receive coupons and sales communicators from a retailer via email (59%), the retailer’s website (51%) and a text message (45%), over receiving a notification via mobile wallet (44%). Although, consumers prefer to receive coupons via a digital wallet over receiving them via direct mail, newspaper ads and social media. Consumers could select more than one preference.
The survey also finds:
- 30% of all consumers polled, and 61% of U.S. millennials, always or often look for coupons while in a store.
- 41% of all consumers polled always or often forget to bring coupons while shopping.
- 73% of all consumers polled and 83% of millennials are more likely to use their smartphone to pay at a register if their loyalty rewards and discounts were automatically applied.