Driving Sales and Customer Engagement with Mobile Payment Programs
By Doug Brown, senior VP and general manager of FIS Mobile
With the use of smartphones and other mobile devices continuing to grow, more and more merchants are looking for a way to capitalize on a communication device that many people never put down. And, as the leaders in this area are finding, mobile loyalty and payment incentive programs possess many benefits for chain stores.
Tie mobile and incentives together
Many of the reasons for instituting an incentive program for a mobile wallet application match the reasons for creating a mobile app altogether – it gives you greater access to your customers, it increases the amounts they spend and it allows you to better target customers by reaching them where and when they’re likely to be interested.
When you consider the benefits of a mobile payment program, you may find yourself wondering why you’ve waited so long to start:
- Higher sales: Mobile wallet users tend to spend more money than those who pay with cash or credit. In fact, studies tracking users of FIS Mobile Wallet have found that consumers tend to buy more items and spend more money when paying with their mobile device than they otherwise would.
- Attractive customer base: Mobile users tend to be younger, active, with more disposable income – among the customers most coveted by many retailers.
- Brand loyalty: Mobile interaction boosts your relationship with a customer, making him or her more loyal to you and raising you to top-of-mind over your competitors.
- Real-time, strategic marketing: Mobile incentive programs can be tailored in real-time, giving you the opportunity to target shoppers based on what they’re purchasing as well as when or where they may shop. For instance, a fast food chain that does not use drive-throughs at its stores continually saw sales drop when it rained. Tying its mobile app to weather reports, it now sends mobile users incentives during rainstorms and tied to time periods forecasted for rain – immediately boosting sales on otherwise down days.
Maximizing return on investment (ROI)
Upgrading to a fully mobile payment system can seem daunting from a financial perspective, particularly for mid-size and regional chains, which may possess a large number of stores, with vast numbers of checkout lanes per store. Replacing all that hardware can be a massive challenge for all but the largest retailer chains.
Fortunately, there are alternatives. By using Quick Response – better known as QR – codes, a store can immediately offer mobile payments using its current hardware. A software upgrade allows current machines to print a QR code onto a receipt that a customer can then scan with his or her phone, or for your scanners to read a QR code displayed on a customer’s phone.
With QR codes, a customer can shop on his or her phone, order items for pick up at your store, and then scan a QR code and choose their payment instrument to complete the transaction. The customer could also scan a code on a digital POS device or from a printed receipt.
For smaller chains and stores, placing a payment-specific tablet at checkouts may be the answer. Cleared of other software, the tablet can function as a mobile register, displaying QR codes for smartphone customers to scan at checkout. Customers benefit from paying by mobile because they can receive and redeem relevant, real-time offers and discounts and track loyalty rewards points with one simple scan.
Put your customers first
If your store is considering a mobile payment incentive program, there are three important points to remember that can help you be successful.
Consider your customer base: If your sales are strong among younger customers, mobile may be a good way to build brand loyalty by enticing your mobile-savvy shoppers to further interact with you. If sales are lower among this group, mobile may be an avenue to boost those sales.
Make it relevant: Keeping your messages to customers relevant to their interests will make them more likely to use your incentives, strengthen your relationship with them and build your brand. If your incentives are not relevant, it can turn off your customer altogether.
Make it easily redeemable: By providing incentives in the form of mobile offers, customers can redeem their discount by tapping the offer when it’s presented in the app at the point of sale.
Going forward, it’s also important to use your incentive program to gain insight into your target audiences. By tracking the offers that work best, you can collect new information about your customers that can help you further tailor incentives and sales to attract and retain customers long-term. A mobile payment program can be added to your existing app, keeping your brand in the hands of your consumers and at the top of their minds.
Take the first step
To develop a mobile payment incentive program, it’s important to work with a reliable, proven technology partner. A close relationship with them will help you establish a strong mobile program from the beginning, and will give them the insight to recommend the best approach for your business.
They can help you make the best choices when building and maintaining a program, and share best practices and ideas that have helped other retailers succeed.
Doug Brown is senior VP and general manager of FIS Mobile.
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JCP calms jittery investors with inter-quarter update
Sales trends at J.C. Penney are improving and year end liquidity is now expected to exceed $2 billion following a recent stock offering, the company said Tuesday morning during an uncharacteristic mid-quarter update on its operating performance.
September same store sales were said to be a 580 basis point improvement when compared to August, although still down 4% from the same month the prior year, and expected to strengthen during the remainder of the year, according to the company. Online sales at JCP.com were up 25.3% in September following a 10.8% increase in August. The company also noted that actions to reconnect with core customers are showing signs of success, especially during promotional events and customer service scores are at an all time high.
"Reconnecting with our customers and getting them into our stores is a top priority. Our enhanced messaging is reminding shoppers that JCPenney’s offering of trusted private brands, key national brands and unique attractions sets us apart from the competition,” said J.C. Penney CEO Mike Ullman. “Over the last six months, we have made significant strides and are now seeing positive signs in many important areas of the business, in spite of what continues to be a difficult environment for consumers and retailers in general. While pleased with the improving trends and more predictable performance, we are still in the early stages of the turnaround and will maintain a relentless focus on achieving our long-term goals for the benefit of our customers, associates and shareholders."
The announcement follows a series of recent actions to bolster the company’s finances heading into the holiday season and to provide liquidity to execute a turnaround from an earlier failed turnaround. Following the release of second quarter results on August 20, which saw sales decline 11.9% to $2.663 billion, J.C. Penney sold 84 million shares which generated $785 million. Those proceeds combined with an existing credit facility are expected to give the company year end liquidity in excess of $2 billion.
Women’s and men’s apparel, fine jewelry and women’s accessories are performing better than the company average with women’s apparel, the company’s largest business, reporting positive sales for the month of September. Some of the sales improvement is related to clearance activity which is negatively affecting margins. According to the company, gross margins continue to be impacted by the overhang of inventory from the first two quarters of the year, higher levels of clearance units sold during the period and the company’s transition back to a promotional pricing strategy during the second quarter of 2013.
"Reconnecting with our customers starts by having the merchandise they want and expect from J. C. Penney and finishes with an exceptional experience when they shop with us,” Ulman said. “With inventory restored to the appropriate levels, we are in stock in the key items and brands she expects to find during every visit. At the same time, our marketing will continue to capitalize on the compelling value we offer, including the sales and promotions our customers love."
Traffic trends are said to have improve at off-mall locations during the back half of September although traffic at mall-based stores remains difficult.
Another area of difficulty remains the home goods department. The company said implementing its new home strategy has been more challenging than originally planned. To date, the company said it has re-opened all but a handful of its 505 new home departments, but the merchandise assortment, shopping environment and price points have not resonated with customers, and sales trends remain weaker in stores. The company said it is working aggressively to create a more balanced assortment between modern and traditional home furnishings, with opening price points and an easy shopping environment, which includes remerchandising the home store by classification in key areas.
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Microsoft teams with First Data to provide frictionless offer redemption at POS
Atlanta — First Data Corp announced that the First Data OfferWise solution has been integrated with Microsoft’s Bing Offers Card-Linked, which consolidates local deals from a number of deal providers. OfferWise is an open platform that enables retailers to electronically attach offers to any consumer payment card or mobile wallet to allow streamlined and automatic redemption of the offer at the point of sale (POS).
“We believe the card-linked applications space is an exciting area of innovation where we continue to be focused,” said Dom Morea, senior VP, advanced solutions and innovation, First Data. “Microsoft is an important addition to the roster of publishers using our capabilities with the First Data OfferWise solution to transform merchant marketing, advertising and offers.”
According to the U.S. Census Bureau, approximately 95% of commerce still takes place at the physical point of sale with 5% online. With Bing Offers Card-Linked, merchants will now have frictionless redemption of an “offer” or “deal” at checkout without the consumer having to use a paper coupon, voucher or promotion code on their mobile device. Other benefits include no need to change the POS system, no additional effort required to train staff in handling redemptions, and no need to wait for payments from deal promoters.
“We’re focused on connecting digital advertising to the physical world and doing so in a way that minimizes friction for merchants and consumers so they can engage with each other in valuable ways. We believe that card-linked offers will play a key role in delivering on this promise,” said Erik Jorgensen, general manager of Local Advertising with Microsoft Corp. “We’re excited to partner with First Data and others in the industry to bring this to life via Bing Offers Card-Linked.”
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