Could Mobile Payments Save Physical Retail?
The death of physical retail is a hand wringing refrain that’s been going on for some time now. The rise of online and mobile shopping, backed up by declining fortunes at shopping malls and physical stores, is enough to make one wonder if maybe retailers can pull out of that crash via technology that’s already available. A new report suggests that it might be mobile payments that saves the physical retail chain, and for reasons you might not expect.
The theory that mobile payments could be a lifesaver comes from the confluence of two separate principles. One, the “showrooming” concept, in which customers go to a store to look at an item, physically interact with it, but promptly use their mobile devices to find—and buy from—the outlet with the best price. Two, the spiraling increase in mobile payments overall. With 24.8 percent of consumers turning to their smartphones to pay for items, and 27.1 percent of consumers in a recent study paying for purchases from a quick-service restaurant, it’s clear there’s room for intermingling.
Lest you start wondering about the value of cross-company partnerships—bring in your Applebee’s receipt for 10 percent off at Best Buy—that’s not the only value point. Target found that its “Skip the Line” service was prompting some to pay remotely, or on location, via smartphone. In fact, 19.2 percent of respondents in one study found that such a service had been used with some store. What’s more, 4.7 percent of consumers paid remotely or on locations for clothes via smartphone.
Tongue-in-cheek remarks about cross-company partnerships aside—though that is one potential way to get some new value out of the idea—it’s clear that customers have an interest in using mobile payments, or at least mobile devices, in stores. So the thing to do is to take advantage of the showrooming urge; open up the searches, but then, have the best price. Or failing that, offer something that the online shops don’t, like consultation on products, or a better warranty or return policy.
Mobile payments could be a great way to get more people shopping, thanks to that showrooming urge. But can stores get such systems set up to take advantage of this before everyone’s gone to Amazon? Only time will tell if stores can beat that particular clock.