Spending on mobiles and tablets

Apple’s forth­com­ing launch of Apple Pay, the company’s con­tact­less pay­ment sys­tem that allows own­ers of an iPhone 6 or an Apple Watch to pay by touch­ing their devices on con­tact­less pads, has been embraced by almost every­one.

Geeks love it and the banks are total­ly onboard with First Direct, HSBC, NatWest, Nation­wide Build­ing Soci­ety, Roy­al Bank of Scot­land, San­tander and Ulster Bank already in place, and Bank of Scot­land, Coutts, Hal­i­fax, Lloyds Bank, MBNA, M&S Bank and TSB Bank join­ing this autumn. The only peo­ple a bit so-so? The retail­ers them­selves.

Marks and Spencer and Wait­rose will offer the basic £20 con­tact­less ser­vice, Tesco has no plans to for­mal­ly adopt the sys­tem although stores with con­tact­less pay­ment facil­i­ties in place will han­dle Apple Pay, while Asda and Sainsbury’s won’t take pay­ments at all.

Mobile should be at the heart of busi­ness rela­tion­ships – instead most lead­ing retail­ers have lit­tle idea what to do with it

Apple Pay also offers a sys­tem, using fin­ger­print recog­ni­tion, that lets users make high­er val­ue or in-app pay­ments with­out hav­ing to re-enter their cred­it card infor­ma­tion or share sen­si­tive per­son­al details with the com­pa­ny. So far it’s lead­ing-edge seam­less retail­ers such as Argos, JD Sports, Sel­f­ridges, Oca­do, Top­shop and Zara who have wel­comed this move.

“Mobile is retail­ers’ biggest chan­nel with­out a strat­e­gy,” warns Dan­ny Bride, head of retail at IBM. “It accounts for more than 50 per cent of e‑commerce and it’s a way for stores to dras­ti­cal­ly reduce wait­ing times for cus­tomers, there­by sav­ing a for­tune.”

Mr Bride points to IBM projects with Boots to reduce queues dur­ing the store’s busiest peri­od at lunchtime by allow­ing shop­pers to both pay for an item and earn Boots Advan­tage Card points with a sin­gle wave of their smart­phone. “Mobile should be at the heart of busi­ness-to-cus­tomer, busi­ness-to-employ­ee and busi­ness-to-busi­ness rela­tion­ships – instead most lead­ing retail­ers have lit­tle idea what to do with it,” he says.

UK con­sumer retail spend­ing on mobiles and tablets is fore­cast to hit £53.6 bil­lion a year by 2024, accord­ing to research from Bar­clays, but only 3 per cent of retail­ers believe they are tru­ly mobile-ready, while 70 per cent say they do not have a mobile-enabled web­site or app in place. Bar­clays’ research also pre­dict­ed that, by 2024, 42 per cent of all retail sales will involve a mobile device at some point in the pur­chase deci­sion process, from check­ing prices to reserv­ing items for col­lec­tion.

“The ques­tion every retail­er should be ask­ing them­selves is what they are doing about it,” says Richard Lowe, man­ag­ing direc­tor and head of retail and whole­sale at Bar­clays. “Mobile devices offer excel­lent oppor­tu­ni­ties for loca­tion-based mar­ket­ing, and as the sup­port­ing tech­nol­o­gy devel­ops, it will allow retail­ers to pin­point the pre­cise loca­tion of shop­pers and send per­son­alised offers rel­e­vant to their vicin­i­ty.”

A cus­tomer pays at a till using a smart­phone app

One loca­tion-based smart­phone tool retail­ers can use to their advan­tage, accord­ing to Gart­ner ana­lyst Van L. Bak­er, is the Blue­tooth LE bea­con. This in-store sig­nal puls­es out a data “greet­ing”, search­ing for Blue­tooth-enabled smart­phones. If a shop­per has opt­ed in to the retail­er cap­tur­ing their data, the phone replies and trig­gers search­es on the shopper’s pur­chas­ing his­to­ry and per­son­al pro­file. The store then has the chance to make spe­cif­ic offers on the spot.

The temp­ta­tion, Mr Bak­er warns, will be for retail­ers to broad­cast gener­ic pro­mo­tion­al offers to any­one with­in range of the bea­con, which is like­ly to be seen as spam. He urges retail­ers to be judi­cious and deliv­er a high­ly per­son­alised shop­ping expe­ri­ence.

It’s a warn­ing John Lewis has tak­en seri­ous­ly. The high street giant recent­ly launched incu­ba­tor JLab in part­ner­ship with tech entre­pre­neur Stu­art Marks. The first start­up backed by JLab is Localz, an iBea­con tech­nol­o­gy designed to trig­ger shop­pers’ click-and-col­lect orders to be picked as they enter the shop, or help cus­tomers nav­i­gate their way around stores based on their online wish list. Mobile point-of-sale soft­ware means store staff can take pay­ments any­where in store using a tablet.

“Mobile helps us join up our chan­nels to offer a seam­less expe­ri­ence,” says Sinne Veit, the company’s direc­tor of online. “Espe­cial­ly with big-tick­et items, in-store is often the start of the jour­ney. Our app already offers bar­code scan­ning, so cus­tomers can read reviews or share with friends and their oth­er half, and then con­sid­er the pur­chase at home. Loca­tion-based ser­vices are just one of the areas we’re look­ing at adding to that,” she says.

The key to suc­cess­ful­ly han­dling this sort of click-and-col­lect, mobile or loca­tion offer, accord­ing to Adyen UK coun­try man­ag­er Myles Daw­son, is an omni-chan­nel for pay­ments. “Unless the back-end is in place across the group, there’s the chance of chaos,” he cau­tions. “There are com­pa­nies where online deliv­ers click-and-col­lect items to stores which have that item in stock.”

Since Adyen’s 2006 launch, the pay­ments com­pa­ny has grown to han­dle more than 250 pay­ment meth­ods and 187 trans­ac­tion cur­ren­cies serv­ing 3,500 online busi­ness­es, includ­ing Face­book, Drop­box, Airbnb, Net­flix, Spo­ti­fy and Groupon. Now it’s mov­ing into bricks and mor­tar, tying up deals with Moss Bros and Superdry. Pro­vid­ed there’s a good omni-chan­nel in place, Mr Daw­son explains, mobile pay­ments offer retail­ers speed and huge amounts of data, mean­ing every trans­ac­tion with the retail­er online, mobile or in-store gath­ers cus­tomer data.

“The future of retail should be such a seam­less trans­ac­tion – like tak­ing an Uber – where I can walk into a store, see some­thing I like, walk out with it and there’s enough in place for the secu­ri­ty tag to be dis­abled and pay­ment tak­en from my account with­out me hav­ing to do any­thing,” he says.

The clos­est retail­er to this vision is Shell. The com­pa­ny is rolling out a smart­phone app across the vast major­i­ty of its 1,000 UK ser­vice sta­tions in a deal with Pay­Pal that allows auto­mat­ic pay­ment of a pre-set amount. Dri­vers link their Pay­Pal account to the app, set a spend­ing lim­it, scan a QR code on the fore­court and the pump will stop auto­mat­i­cal­ly when the spend­ing lim­it is reached. The petrol is then paid for auto­mat­i­cal­ly. It’s a smart solu­tion – although, of course, most petrol sta­tions have huge signs ban­ning the use of mobile phones.