Target merges popular apps
(BI Intelligence)
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Target announced that it will merge the functionality of its savings app, Cartwheel, with its main Target app later this summer.
The new integration will give users the ability to access several features, all from one location — this includes access to Cartwheel offers for in-store purchases, Target’s in-store and online assortment, and store maps.
The app will eventually add Target Pay, the retailer's mobile payment solution for Target REDcard holders, giving consumers the ability to claim discounts on items, pay for goods at the POS via their smartphone, and receive an additional discount of 5%, which is offered to all REDcard holders.
Users of Target's offerings will likely embrace a one-stop shop that meets all of their needs.
Target is appealing to a large addressable user base. Target’s Cartwheel app has been downloaded roughly 40 million times, over 27 million shoppers have used the app, and its users have saved around $1 billion via its deals, up from $600 million last year, according to TechCrunch. For context, Starbucks, which arguably has the most popular retailer-based mobile wallet, counts over 12 million active users of its popular rewards program.
By merging Cartwheel's savings abilities with REDcard members' tendency to spend, Target is likely to drive up adoption and usage of its mobile wallet. Customers of REDcard tend to visit Target stores nearly twice as often as noncardholders, and they also spend about 50% more, according to Nasdaq.
Retailers like Starbucks and Dunkin' Donuts are winning over consumers with their mobile wallets — apps developed by stores to make it easier for their customers to pay, and to deliver valuable perks.
And these retailer wallets are leading the overall mobile wallets industry, thanks to their ability to rapidly push out innovative features like rewards programs, coupons, mobile order-ahead, and custom marketing.
This may be surprising considering that retailer mobile wallets can be used only at a specific retailer’s locations; in contrast, popular universal mobile wallets like Apple Pay and Samsung Pay can be used at multiple retailers, as long as users are using the necessary smartphones.
Ayoub Aouad, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on retailer mobile wallets that assesses what makes them so successful and which retailers can most effectively leverage the technology to push sales, traffic, and average ticket size. The report also outlines what makes these mobile wallets attractive, and discusses some of the advancements being made in the payments industry that will affect mobile wallets' growth rate.
Here are some key takeaways from the report:
Retailers with large addressable user bases who are loyal, repeat visitors, will see their mobile wallets continue to be popular with consumers, especially as there continues to be slow merchant adoption of near-field communication (NFC) technology as well as weak offerings by universal mobile wallets like Apple Pay and Samsung Pay.
Loyalty programs will be a significant driver in retailer mobile wallet adoption. Companies like Starbucks and Dunkin' Donuts have been able to leverage their loyalty programs to acquire mobile wallet users, which, in turn, has driven store traffic and conversion rates.
By leveraging these programs, sales are expected to grow at a five-year compound annual growth rate of 68%.
However, adoption will begin to decelerate as a result of increased competition by 2020. As universal mobile wallet players begin to add effective loyalty programs and coupons to their offerings, adoption for retailer-based mobile wallets is likely to slow down because these offerings are their main marketing points.
In full, the report:
Explains what hurdles universal mobile wallets have faced.
Details what features retailers have adopted into their mobile wallets that have been successful
Analyzes the use cases of retailers that have successfully leveraged their mobile wallet offerings to push growth.
Identifies how universal mobile wallets will eventually slow growth for retailer-based mobile wallets.
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