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    Great Incentives Can Drive Mobile Pay in Grocery

    The tech is there, but grocers still need to get shoppers interested

    By Randy Hofbauer, EnsembleIQ

    Today, more consumers are spending via mobile payment platforms than they were just a few years ago. These platforms, in return, are benefiting retailers, which are using them for differentiation, gathering shopper data and even increasing operational efficiency.

    Still, many consumers haven’t adopted these platforms. At grocers today, every $1 of $148 spent at the point of sale is from a mobile wallet, according to transaction data from Charlotte, N.C.-based Bank of America. And while mobile wallets continue to enjoy wider acceptance and use, growth has slowed: In grocery, mobile wallet spend increased 73 percent in quarter one of 2017 compared with quarter one of 2016, but was still down 200 points from the same period in 2015.

    The technology is there. But while some consumers are adopting it, many others show reluctance. What’s causing this, and how can food retailers respond to encourage adoption?

    Clear Convenience

    Understandably, the biggest reason for consumers to adopt  — and retailers to push  — mobile payment apps is faster, more convenient checkout. Grocers need to communicate this benefit, especially as EMV chip-reading technology gets wider use: Some 37 percent of respondents to a survey from San Francisco-based mobile payment solutions provider Square Inc. listed slow lines and checkouts as their No. 1 pain point regarding chip-card technology.

    Bentonville, Ark.-based Wal-Mart Stores Inc. is one food retailer speeding up the process. With its Walmart Pay platform, users simply scan a QR code made at checkout for a transaction, and payment is processed via the app, which is connected to a person’s credit or debit card. Payments generally are processed faster than those from a credit card, and the need for paper receipts is eliminated.

    Some grocers are integrating mobile payment platforms with scanning technology to help eliminate checkout lines altogether and make the process faster still. In May, Salt Lake City-based grocer Macey’s introduced Skip Checkout, an app that lets Macey’s shoppers simply scan their items as they’re placed in the cart. Users pay for the purchase directly from their phones, using a linked debit or credit card, or the Apple Pay or Android Pay mobile wallet apps, and then bag and exit via a dedicated checkout lane.

    Peace of mind is another convenience that grocers should communicate: Some 58 percent of respondents to a 2016 study from Montreal-based marketing and loyalty analytics company Aimia said that they’re unlikely to use a digital wallet, with 56 percent of that number citing data security as a concern.

    However, experts argue that mobile payment platforms actually include several features that stop fraud in its tracks. For example, a unique series of numbers is assigned to each virtual credit card stored within a mobile wallet, according to Chris Francis, VP of market development at Worldpay US, an Atlanta-based provider of payment-processing technology. This ensures that even if a merchant’s transaction is compromised, a customer’s actual card number stays out of fraudsters’ hands.

    By Randy Hofbauer, EnsembleIQ
    • About Randy Hofbauer Randy Hofbauer is digital and technology editor of Progressive Grocer. He has more than a decade of experience as a journalist and researcher, almost all of it covering CPG retailing.

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