By Russ Wilson, IBM director, Mobile Innovation Center
Millennials’ comfort with mobile technology, in a world where just about everything can be done with an app, is driving businesses to provide apps of their own – enabling the purchasing of products and services in a way that is more natural to this tech savvy generation.
Research by American Express revealed 52% of consumers ages 18-24 are likely to try new technology-enabled payment tools. To the Millennial, the physical wallet is a soon-to-be extinct artifact of the pre-digital era.
Whether it’s about renting movies, purchasing a vanilla latte or reserving a rental car – providing an alternative payment option that caters to the increasingly digital lifestyle of tomorrow’s consumer has great potential for merchants to gain a new generation of loyal customers.
And small businesses are taking notice. Providing Millennials with multiple transaction options is not only a smart move for small and mid-sized businesses (SBMs), but may be vital for the growth of their business, especially for those that have avoided taking credit cards due to prohibitive fees.
Millennials generate a significant amount of revenue for smaller retailers and merchants – from coffee shops to food trucks. As small businesses rely heavily on a customer's frequent purchases, it’s critical to make the brand a part of their daily routine – and mobile payments can be an important point of distinction.
When an SMB puts a branded app right into the customer’s hand, a far deeper relationship with customers is enabled. Changing the relationship with the customer is extremely important when there is a lot of competition. For example, a loyalty program seamlessly integrated into a mobile payments app can motivate customers to frequent one cafe over another.
An app that allows purchases to be made in advance and skip long lines during heavy volume, like lunch, is another opportunity to engage users. Quick serves with a mobile payment and loyalty app can experience more frequent visits from customers who use the app to pay and the analytic insights generated from these transactions can bring a new level of understanding of a consumer's buying habits, and enable the merchant to serve up personalized offers and coupons.
SMS can also drive the adoption of a company’s mobile app. Once companies have consumer opt-in via SMS, they can “push” a link to the company’s mobile app directly to the consumer, making it easy for consumers to simply click to download and use the app. This further strengthens the relationships with customers and validates SMS as an effective way to drive service, and increase customer satisfaction for consumers who prefer to communicate via mobile devices.
With the mobile payment industry forecasted to account for $1 trillion in global transactions by 2015 – it’s high time that merchants and retailers embrace mobile payments as a key part of their business strategy to better engage and build brand loyalty with Millennials.
Russell Wilson is the director of IBM’s Mobile Innovation Lab, whose mission is to identify revolutionary mobile technologies and trends and transform them into new products and solutions that deliver significant value to individuals and companies. Wilson is also one of IBM’s new Design Executives, helping to teach and evangelize design thinking throughout IBM, and influence a new era in software product development.
Russ Wilson, is IBM director, Mobile Innovation Center. He can be reached at email@example.com. Follow Russ on Twitter: @russwilson.