Do retailers understand the opportunity that mobile wallets present?

• New survey on mobile and loyalty card usage demonstrates there is a big appetite for mobile wallets with more than one in four UK loyalty card holders using a mobile wallet solution
• Two in five of those surveyed (43%) would stop signing up for new loyalty cards if they could not fit them into their physical wallet
• But are retailers really taking advantage of the ease and convenience that mobile wallet solutions offer

This article is brought to you by Retail Technology Review: Do retailers understand the opportunity that mobile wallets present?.

The Mobile and Loyalty 2016/2017 Survey shows that the value proposition for mobile wallets is definitely understood and could accelerate as there is still a big appetite for loyalty cards and reward programs.

The UK market is still maturing but there is huge opportunity for brands and retailers alike. Already, on average, one in four UK loyalty card holders are using mobile wallet solutions to store offers/coupons (28%), airline boarding passes (19%), loyalty cards (29%) and tickets (24%).

Veoo, a global mobile consultancy and provider of mobile messaging solutions, alongside its US partner, Vibes, commissioned the US and UK survey in order to find out what the future holds for mobile wallet adoption. In total 2003 adult loyalty card holders were surveyed to find out what they want and expect from a mobile wallet solution and what will spur adoption and use. The survey also looked at how awareness, perceptions, and adoption of mobile wallet solutions has grown. In particular it looked at expectations around plastic loyalty cards, influencing factors, and explored the question of whether consumers really want more cards in their wallet.

The survey found that 95% of UK and US loyalty card holders have anywhere between one and 10 physical loyalty cards. Over 89% use anywhere between one and four of their physical loyalty cards every month with over 93% using between one and five of their loyalty cards stored in their mobile wallet solution every month.

According to the research, the US is much further ahead than the UK when it comes to using mobile wallet solutions to store offers and coupons, loyalty cards, airline boarding passes and tickets. The survey showed that 52% of US respondents versus 28% of UK respondents use mobile wallet solutions for offers and coupons, 30% of US respondents versus 19% of UK respondents for airline boarding passes, and 48% US versus 29% UK for loyalty cards. Tickets was the only area where the UK was slightly more aligned with the US albeit still behind (24% versus 33%).

A startling amount of UK and US respondents (70% and 69% respectively) still keep track of coupons and offers by keeping the physical coupons in their wallet/purse. That said, 52% of US respondents are now saving offers/coupons to their mobile wallet solution whereas only 28% of respondents are doing this in the UK. This does offer retailers an opportunity to streamline and simplify the process of saving and organising offers.

Matthew Winters, CEO, Veoo comments: "Even though fewer brands and retailers have sophisticated mobile wallet marketing programs in the UK, this data suggests that UK respondents inherently understand the value and would be willing to use mobile wallet solutions.

"What I found interesting is that both UK and US consumers are still engaged even after 20 years of marketing with loyalty and rewards programs. Let's face it, the numbers in the survey are great under a bad physical system. How much better could they be under an electronic system? Mobile Wallet solutions are lightweight and dynamic - retailers and brands can change and update programs as their business develops, plus they can be far more targeted and understand much about the shopping trends of the consumer. But retailers are still sending out physical coupons at great expense and I don't think they really understand quite how easy and convenient a mobile wallet solution can be. In the long run they can save the retailer a significant amount of money – but many are still operating in the dark ages."

Other research findings show that overall, for those that use a mobile wallet, both UK and US respondents view mobile wallet solutions as a much more convenient way to manage offers and coupons (88%), airline boarding passes (78%), loyalty cards (78%) and tickets (77%).

The US is very much a consumer based society with intense pressure to maximise every dollar spent and to squeeze every last dollar out of loyalty and reward programs. Over half (57%) of US respondents are much more likely to print out coupons and redeem instore than UK (38%). Equally, US respondents get far more irritated (58%) about missing expiration dates on offers than those in the UK (39%). This hints that they may be receptive to brands that leverage mobile to remove their cumbersome steps and make it easy to store and redeem coupons and offers.

28% of the total respondents surveyed do not believe that they are getting as much value out of offers and loyalty cards as they could. 73% of the total respondents surveyed sign up to new loyalty programs just so that they can get the rewards. However, retailers be aware, more than two in five of those surveyed (43%) agreed they would stop signing up for new loyalty cards if they could not fit them into their physical wallet.

Overall, 31% of the total respondents would have a much more positive opinion of a loyalty program if they were able to save plastic loyalty cards to their smartphone and have instant access to point balances, rewards and exclusive information. This figure changes to 20% when looking at UK respondents only and 41% for the US respondents.

Matthew Winters, CEO of Veoo, concludes: "Giving consumers the convenient option for storing and redeeming coupons and offers can have a material impact on brand perception and affinity. Equally mobile provides convenience and immediacy which makes it the go to device for consumers in the UK. Brands and retailers need to capitalise on that shift, otherwise consumers will simply start to disengage."