mCommerce and Digital Wallets in Performance Marketing

This post was inspired by and during a session at the Performance Marketing Insights conference in NYC, presented by KeyNote Speaker of Forrester Research, Senior Analyst, Denee Carrington.

Digital wallets will revolutionize the way consumers shop and pay for goods and services. Those who carry a mobile device will be your ‘always ready’ consumer, especially with the growth of digital wallets.

There are four major categories around mobile considerations

• Product Infomration
• Offers and Coupons
• Loyalty and Rewards
• Mobile Payments

What is a digital wallet?

It is a digital service accessed through the web or a mobile app that authorizes payment transactions from one or more payment sources that facilities other commerce-related features such as offers, coupons, deals and more.

VAS will emerge within mobile digital wallet for use at point of sales. Coupons will be integrated for automated redemption, enhanced targeting and relevance, merchant funded. Consumers are already using value added services outside of the wallet: scanning, location lookups, redeeming codes, images

What we are finding is the more people do this, the more they do it! Meaning it’s going to continue to accelerate.

• Retail sales are expected to be $3.8TT in 2016
• eCommerce = 9% of that
• mCommerce = 8% of that. 

According to Forrester Research, US mobile payments will reach $90B in 2017. Consumers are already showing interest in proximity mobile payments. Customer are just starting to talk about this, which makes it an incredible opportunity for leaders in the space.

Early adopters are generally younger, male, and online & mobile bankers. However even early adopters need reassurance about the safety and security of mobile payments. The barriers to digital wallet adoption are falling. Using mobile digital wallets in store a natural extension of existing behaviour. Software based solutions present few barriers for customers and merchants.

Every connected device will eventually become a commerce device. Digital wallets will be ubiquitous. Digital convergence of channels and devices will make “online vs offline” irrelevant. Merchant Customer Exchange (MCX) and Passbook are examples of companies to watch in this space because of their platforms for offers and coupons for digital wallets and the future of transactions.

Other Examples:

• Google Offers within Google Wallet
• Clip to Isis – Tap, scan, click offers or follow merchants
• Prewards (edo interactive)
• Cardlytics
• FirstData – beyond the transaction
• Card-linked offer platforms are on the rise and will feed bank-driven digital wallets, targeting based on customer profile and spend history, automatic redemption and pricing will be modelled around “pay on redemption”.
• Square – enables discovery, incentives for first visits and loyalty rewards.
• LevelUp – enables discovery (directory and Facebook integration), automates instead credit for first time and repeat visits.
• Digital Wallets will continue to transform the “in-store” experience. You won’t’ have to stand in line anymore. You simply scan your phone and it will automatically be shipped to you to your home. Payment and shipping info will already be registered, so you can move faster and shop more conveniently than ever.
• “Line busting” features let consumers order, pay before arriving in the store.

If you lose your wallet (your real one) you cannot lock it, you cannot protect it, you cannot recall it. Protection on digital wallets is already exponentially more safe than having a physical wallet. However, the disappearance of the use of CASH and plastic cards will not happen any time soon so digital wallets will continue to increase over the next few years.

SO, what does this mean for performance marketing?

1. The payments landscape will become more crowded and complex, There won’t be just a single winner. They will be all interconnected. The ones that will do well will be the ones that add value and a unique experience for the customer.
2. Banks and merchants will fight to retain control and influence of their customers spend. Digital wallets threaten to supersede bank and retailer influence on customer shopping and payment decisions.
3. Marketers should partner promiscuously. Seamlessly integrate into wallet experience, and help them win. Give them a reason to exist, a reason for customers to use them, which are the rich experiences with their merchants.
4. Help partners get ahead of regulator concerns about privacy with mobile advertising.
5. Demonstrate your value to help wallet providers to be successful: Greater value to merchants, greater convenience to consumers, help banks achieve “top of wallet” positions.

A digital wallet startegy is like a treadmill. Standing still is a bad idea.  It’s here to stay. Get smart. Figure out what your value proposition is and to whom. Just figuring out your piece in this evolution is the right first step.

If you need help creating that strategy or setting up an m-commerce platform, let me know because we can help!