Three Ways Retailers are Combining Mobile with Retail Strategies

October 24, 2016         By: Lucy Maher

Ask any consumer what they rely on their phones to do, and in addition to texting, browsing social media, and checking the weather, many might also say shopping on-the-go or keeping track of rewards. With the busiest shopping season of the year close at-hand, attentions are likely to be short, but spending will be high – estimates place online sales at $105 billion.[1]

According to the National Retail Federation’s 2016 Retail Holiday Planning Playbook, mobile – including both phones and tablets – accounted for 30.4 percent of online sales during the most recent holiday season. Plus, a study from Accenture, a leading global professional services company, states consumers increasingly believe it’s easier to make purchases via their mobile devices in 2016, at 48 percent of consumers versus 42 percent in 2015.

As a result, retailers are increasingly adopting mobile-first strategies, allowing customers to shop and pay without ever opening their wallets. These strategies include enabling mobile payments in stores, launching location-based marketing through a proprietary app, and leveraging mobile to enhance customer loyalty.

“Mobile devices are on the cusp of becoming the de facto platform for shopping and payment – consumers are quickly defaulting to their mobile devices for all aspects of the purchase journey, which has led to mobile revolutionizing commerce and marketing strategies,” said Amy Parsons, Vice President of Global Commerce at Discover. “This is a great time for retailers to think about how to deliver engaging and seamless experiences specifically through mobile devices to complement their physical and online channels.”

Mobile Payments

One way retailers are adjusting their transaction functionality is at the traditional in-store checkout. Whether it is through NFC-enabled point-of-sale terminals, or enabling their own mobile wallet housed in a proprietary app, retailers are beginning to enable smartphones to pay.

One major coffee chain has created a proprietary app that allows customers to pay for their orders by waving their phone screens over a small, countertop scanner. This method of payment accounts for 24 percent of transactions across its U.S. locations.[2]

“Contactless payments can benefit merchants most directly by increasing throughput,” said Jordan McKee, Senior Analyst, Payments at 451 Research. “The duration of a contactless transaction is in some instances 5-10 seconds faster than other transaction types. When considering this in the context of a quick service restaurant at lunch hour, the time savings translates to real business results.”

Location-Based Services

Other retailers are using location-tracking to reach customers in-store. It’s a smart move: In a 2015 GPS Shopper and comScore poll, 27 percent of customers said that location-specific tools are the number-one feature of a retailer’s mobile app.[3]

One of the country’s largest “Big-Box” retailers is using geo-fencing in more than 4,000 stores to allow its customers to search for products while in-store via their mobile device. A couple taps in the retailer’s app and the customer is presented with real-time product details, pricing, and the item’s location in the store.[4]

“Location-based services help merchants to create more personalized and contextually relevant experiences for shopper,” said McKee.

Loyalty Programs

One remaining opportunity for retailers is integrating their loyalty program with new mobile wallets, such as Apple Pay, Android Pay, and Samsung Pay. One major pharmacy has taken a step forward in bridging the gap by enabling customers to load their rewards card into their mobile wallet, from which they can redeem earned rewards by tapping the phone over the terminal at checkout.[5] This can alleviate consumers forgetting their loyalty card at home, or forgetting to use it during checkout to earn and redeem rewards. Retailers benefit through increased use of their loyalty program without further work from the consumer, and can thus gain more information about consumer shopping habits and preferences.

This article was brought to you by Discover Global Network. For more insights into consumer trends and the world of payments, visit Discover Global Network Perspectives.


[1] National Retail Federation

[2] NFC World

[3] eMarketer Mobile Commerce Roundup

[4] Beaconstac

[5] Mobile Payments Today