At the recent Shoptalk conference held in Las Vegas, mobile wallet provider CardFree released research that shows a direct link between retail mobile wallet apps and frequency of store visits by consumers. Analyzing transactions processed on CardFree's mobile commerce merchant platform, data indicated that visit frequency jumped from monthly to weekly after customers downloaded and used retail mobile apps.
Research across CardFree's platform revealed that this doubling of visits, once established, stabilized over time as the new norm. In fact, the company found that time between visits decreased with each successive app use up to around the sixth visit, where usage patterns reached a new plateau. "Historically, we've seen that mobile consumers have a higher lifetime value than other consumers, so the results of our platform research aren't a surprise," said Jon Squire, founder and Chief Executive Officer at CardFree. Data was collected from over 22,000 quick service restaurant locations transacting with 100 million consumers weekly, and 50 million consumer visits to casual dining and other high-volume merchants using its platform.
"What is a surprise is the level of increased frequency, which is very significant," Squire said. "In addition to finding that mobile is a driver of frequency, we've also found that adding a loyalty program tends to increase both frequency and spend. Merchants that use our full platform services including order-ahead, payments, offers and loyalty tend to see the most shift in behavior."
The latest data from Auriemma Consulting Group's Mobile Pay Tracker also suggest that transaction-based incentives may increase visit frequency and spend through mobile pay and that regardless of who funds the incentives, issuers, merchants and payment app providers all stand to gain.
"Pay apps very well may be the future of payments," said Jaclyn Holmes, Director of ACG's Payment Insights. "Incentives provide an opportunity for issuers and merchants to have consumers associate their brand with the payment method, which could turn out to be a valuable long-term investment."
According to ACG, 25 percent of consumers with an eligible smartphone use mobile pay, a group primarily comprising affluent, college-educated individuals. Within this segment, 32 percent recalled being offered a mobile pay incentive, compared with 19 percent in the previous tracker. Eight-six percent of recipients said that when an incentive was offered, they claimed it at the POS in-store or in-app.
In past trackers, the proportion of banks offering incentives was highest, but the percentage slipped from 58 percent to 40 percent quarter-over-quarter in findings released in March 2017. Merchant-funded incentives have now taken the lead, with 46 percent of merchants offering them. Seventy-eight percent of consumers who responded to these offerings said the incentive was linked to a specific merchant.
Similar to CardFree's findings, ACG found that over a one-week period, those who received an incentive to use mobile pay in-store did so 4.6 times, compared with 3.1 times for those who did not receive an incentive. In-app purchases incentivized shoppers to purchase four times a week, compared with 2.4 for those not offered incentives.
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