By David True, General Manager, US, SEQR Mobile Payments
March 2, 2017
Talk of mobile payments has been taking up pixels in the payment press for years, and was creeping into the wider retail conversation even before Apple Pay arrived in October 2014. But in the US, using a mobile phone for in-store shopping is still the exception. Is it any different in the EU? Let’s take a look.
Consumers like to shop and love their phones, and apps are a big reason. But in Europe as in the US, the mobile shopping world is dominated by retailer-agnostic, online-only apps. Amazon leads in the US, and increasingly in Europe. This threat to brand, share, and margin is clear, and retailers in the EU are working to find solutions.
Jaeger is a UK retailer, founded in 1884, who, like many in fashion, has struggled in recent years. Digital is central to turnaround efforts, and in December 2014 they brought in Cathy McCabe from Burberry as their CIO.
Cathy has some clear views about the role of mobile in her vision for Jaeger. Just a month after joining, she made the now-common argument that payments should disappear into commerce, and POS should disappear, freeing floor space for selling and allowing all to be done through the customer’s phone.
Where has McCabe taken Jaeger? In a July 2106 article, she commented
"We've replaced point of sale in all our stores, we've introduced mobile point of sale (MPoS), we've introduced other tools such as digital receipts to help drive different types of engagement with our customer base,"
"We brought the loyalty program in house after it had been outsourced for a number of years – we’re in the process of transforming loyalty. We introduced JaegerInspire [in association with tech startup Proximity Insight] – an in-store tool which gives the store staff more information at their fingertips such as product data and customer engagement and purchase history."
That was a start. Jaeger planned to add new, mobile phone features such as video and reviews to increase customer engagement and future link physical store and digital operations. But no store-specific app, with payments. Not yet.
Did it work? Apparently not quickly enough for its private equity owners, who cut senior management, including McCabe, in December. While Jaeger’s operating losses narrowed, same-store sales fell. But the strategy makes sense-- we saw Amazon launch a version of this idea last month, in a grocery store, with Amazon Go.
Fashion has its own unique challenges. Other areas of retail are driven less by style and more by product mix and convenience, and here mobile can clearly help.
In the Netherlands, where 20% online shopper used their smartphone to place an order in Q3 2016, grocers have taken note, and are using the channel to build loyalty. How? By making it easier to get groceries home. One leading chain, Jumbo, is betting on pickup points, where a customer can stop and pick up the pre-ordered groceries; the other, Albert Heijn, has pickup points but also offers home delivery. Both have apps for ordering and paying.
2016 research indicate grocery shows mobile growth interest in Germany and France, and in both those markets we see grocers looking to implement variations of what is happening in the Netherlands. Lidl, for one, is testing the idea in select German locations.
Outside of verticals where delivery is important, who had done the most to integrate mobile into the shopping experience? A good candidate is FNAC, a French-based chain that is roughly a combination of Best Buy and Barnes and Noble, with a Gallic twist.
FNAC has a mobile app that combines shopping, order tracking, promotions and events, and uses geo-location to display different content when the user is near a FNAC store. As they describe it:
“FNAC is accelerating its mobile development by launching a new version of its iPhone and iPad application. This is a step further in the brand’s omni-channel development, establishing a real link between its Website and its stores thanks to mobile…. It has been rethought entirely to reinvent a new purchase experience: simple, personalized, relational and local.”
How about the omnichannel wallet? The one that bridge physical and digital, with payment built in? Who is leading that effort?
Some are certainly working on it. Last month, in France, three financial institutions (BNP Paribas, Crédit Mutuel, and Oney), a couple of big retailers (Auchan and Carrefour) and a petroleum company (Total) announced they were working with MasterCard to offer a “..unified universal mobile payment solution designed to enhance the customer relationship”.
This effort grew from distinct digital wallet launched by some of those involved; one can infer those wallets were not getting the hoped-for results, which lead the cross-business effort.
Finance folks working on an app? Sound a bit like an MCX remix, built by frenemies. Will their wallet see greater adoption than CurrentC? I’ll be watching.
David True, a payments industry consultant, currently is helping SEQR Payments, a Swedish mobile payments firm, grow in the United States.