mobile wallet consumer report non-payment opportunities for marketers

August 2013

Mobile Wallet Consumer ReportNon-payment opportunities for marketers

2Beruntium id quiat facculpa conseque@Vibes 2013. All Rights Reserved.

Executive summary

2Executive summary@Vibes 2013. All Rights Reserved.

As the “Wallet Wars” continue on the payment side of the mobile wallet, the new frontier for retailers is on the non-payment side — meaning the part of the wallet used to organize, but not pay for, items. The non-payment side of mobile wallet eliminates the need for paper items (e.g., coupons and boarding passes), organizes bulky items (e.g., loyalty cards) and expedites the checkout process for consumers at their favorite retailers. The non-payment side of mobile wallet arms retailers with a versatile mechanism that delivers personalized and relevant content that drives engagement, builds customer loyalty and draws consumers into their brick-and-mortar stores.

Consumers have confirmed the need for – and have made it clear that they are excited about – the convenience of storing mobile wallet content on their phones. For retailers, consumer desire and demand reveals the untapped potential of the non-payment side of the mobile wallet.

For the past few years, mobile wallets have largely referred to paying for merchandise with your mobile phone. Then, in September 2012, Apple started the

non-payment movement with Passbook, setting it apart from other mobile wallets in market. This allowed consumers the opportunity to move away from physical coupons and loyalty cards, by saving them to their mobile device instead. Samsung introduced Samsung Wallet in August 2013 and Google Wallet Objects — the non-payment side of their mobile wallet — will launch this fall, showing the growth of the non-payment side of mobile wallet. With more than 50 percent of smartphone users on the Android operating system, marketers will now have the opportunity to reach a broader mobile wallet audience.

Vibes commissioned the industry’s first-ever mobile wallet research focused on the non-payment side of mobile wallet to help paint a vivid picture of the true potential of the non-payment side of this tool. The consumer survey, fielded in July 2013 with 1,000 smartphone users, sends a strong message that consumers desire the non-payment side of mobile wallet. This definitive research reveals the following consumer attitudes and behaviors related to this emerging mobile marketing technology.

The non-payment side of the mobile wallet creates tremendous opportunities for marketers We need smartphones to organize our lives, and now we need mobile wallets to help us organize our smartphones.

3Key takeaways@Vibes 2013. All Rights Reserved.

1. It’s still early 2. Demand is high

3. The opportunity is now

We are in the very early days of the non-payment mobile wallet transformation. This is not surprising because Passbook debuted in September 2012 and Google Wallet Objects is expected to launch soon.

Smartphone users are eager to try mobile wallets for more than just making payments with their phone. The need and demand for the non-payment side of the mobile wallet is clear.

Consumers have spoken about how and why they would use mobile wallets, offering retailers the guidance and direction they need to get started right now to meet the needs of the mobile consumer.

48%33%

85% 59% 44%19%

of consumers are aware of the non-payment side of the mobile wallet

have no idea what mobile wallets are

only think of mobile wallets for making payments

of consumers say they would receive some benefit from non-payment mobile wallets

of consumers say they would have a more positive view of retailers if they started to deliver digitized mobile wallet content

of non-users think a mobile wallet used to store information would enhance their shopping experience

The majority of consumers (55 percent) would prefer to receive mobile wallet content weekly

Digitizing paper items (22 percent) and organizing coupons and loyalty cards (19 percent) are the top benefits

Email is the most preferred method for receiving mobile wallet items (46 percent), followed by text message (20 percent) and native apps (19 percent)

Key takeaways

Only 19 percent of smartphone users have noticed any retailer offering mobile wallet-specific promotions in the past six months

33 percent of consumers have used mobile wallets for non-payment (e.g., storage of loyalty cards, coupons, etc.)

4Survey findings@Vibes 2013. All Rights Reserved.

There continues to be confusion about the definition and benefits of the mobile wallet. While the common perception may be that consumers think of mobile wallets as a payment device, the data shows that 48 percent of consumers understand the non-payment features available with mobile wallets.

One-third of consumers believe that a mobile wallet is used for payment only. This finding demystifies the belief that most people only think of mobile wallets as a payment tool. Nineteen percent have no idea what a mobile wallet is or what it is used for.

Only 19 percent of smartphone users have noticed retailers offering mobile wallet-specific promotions in the past six months. This is in part because Apple Passbook has been out for less than a year. The challenge for mobile wallet adoption with consumers is two-fold – there continues to be a lack of consumer awareness, and a lack of ever receiving – or even hearing about – a mobile wallet offer or promotion from their favorite brands and retailers.

With over half of consumers unaware of the non-payment side, this presents a huge opportunity for retailers.

33%27%

48%

21% 19%

A mobile tool that allows me to pay for items directly from my phone

A mobile tool that allows me to both pay for items

with my phone and store information

A mobile tool that allows me to store information

I have no idea what a mobile

wallet is or what it’s used for

What is your definition of a “mobile wallet”?

Only 19% of smartphone users have noticed any retailer offering mobile wallet-specific content in the past six months.

Base: Total n=1,000Source: Vibes 2013 Mobile Consumer Survey – August 2013

Further consumer education needed for ‘mobile wallet’

Survey findings


Benefits of the non-payment mobile walletDemand for the non-payment mobile wallet is high – 85 percent of consumers say they would receive some level of benefit from storing and organizing offers and loyalty cards on their phones. The convenience factor of digitizing and organizing items is very appealing to consumers. Digitizing paper items (22 percent) and

smartphone organization (19 percent) are the mobile wallet benefits that would most enhance the consumer shopping experience. Consumer desire is clear, creating an unprecedented opportunity for retailers to deliver time and location-aware content to their target customers’ mobile phones.

22%85% perceived benefit

19%13% 13%

10% 7%

15%

Which mobile wallet feature would benefit you the most?

Digitizing paper items

Organizing on your

smartphone

Managing point balances

Time sensitive offers

Automatically updated items

Location aware alerts No Benefit



As stated throughout this report, there is a very strong demand for the non-payment side of the mobile wallet. Fifty-nine percent of consumers say they would have a more positive view of retailers if they started to deliver digitized mobile wallet content (e.g., loyalty cards, offers/coupons, promotions).

The intersection of time, location and interaction are foundational elements that differentiate mobile wallet content from any other marketing tool available to marketers. Leveraging time- and location-sensitive content enables a powerful opportunity to interact with consumers – to remind people when they are close to

your store; to retarget customers who have not used an offer before it expires; promote time-dependent offers that expire quickly, thus driving urgency. Because this tool has endless possibilities, it is important to deliver engaging content to consumers where time, location and interaction are relevant.

Lastly, one of the most exciting capabilities of the non-payment side of the mobile wallet is the ability for retailers to create personalized content. Retailers can send content tailored to each consumer based on their preferences, behaviors, purchase history and more — driving engagement, loyalty and in-store traffic.

Retailer impact of using non-payment mobile wallet

How would your perception of a retailer change?

25% 34% 38% 3%This would completely

change the way I view the retailer in a positive way

This would make me like the retailer even more

It would have no impact on how I view the retailer

It would diminish or weaken the perception I have of the

retailer59% positiveBase: Total n=1,000Source: Vibes 2013 Mobile Consumer Survey – August 2013


Thirty-three percent of consumers have used mobile wallet for non-payment (e.g., storage of loyalty cards, coupons, etc.) and 39 percent describe their experience as “extremely positive.”

Because the non-payment side of the mobile wallet is still relatively new, the redemption experience may not be as smooth as it is with paper coupons. Retail stores are investigating how to incorporate this new technology and might not have the right scanning equipment. In addition, staff might not be trained on how to use mobile wallet content. The goal for retailers is to create an in-store experience that makes using

the non-payment side of the mobile wallet as easy as using a traditional coupon or loyalty card, but this should not inhibit retailers from meeting consumer demand for convenient mobile content stored on their phone.

Adoption of the non-payment side of mobile wallet is evenly distributed across income levels – 26 percent for consumers with incomes higher than $100K, 21 percent for those between $75K-$99K, 25 percent for $50K-$74K and 28 percent for those making less than $50K.

Non-payment mobile wallet usage & experiences

39% 41% 19%

1%

26%No 67% Yes 33%28%

25%21%

Extremely positive Somewhat positive Neutral/no impact

Somewhat negative

Income <$50K

Income $50K - 74.9K

Income $75K - 99.9K

Income $100K+

Base: Total n=1,000; users n=330Source: Vibes 2013 Mobile Consumer Survey – August 2013

Non-payment usage Income levels

Non-payment experience

Do you use mobile wallets for non-payment and what has been your experience?


Many consumers look to mobile wallet technology to receive deals and to make their lives easier. Among the two-thirds of consumers who do not currently use a mobile wallet, 50 percent say getting better promotions/offers would influence them to try a mobile wallet tool. Forty-four percent of these non-users think a mobile wallet to store content such as coupons and loyalty cards would enhance their shopping experience.

The research indicates that the non-payment side of the mobile wallet presents an opportunity to deliver

the ultimate shopping companion. Not only can consumers receive exclusive offers and promotions, but once the content is on their phone, retailers can interact with that consumer through the mobile wallet. Consumers can be alerted when an offer is about to expire, when the content has been updated and even to change the offer to improve redemption rates. In addition, location-aware features of Passbook and Google Wallet Objects alert consumers with a subtle reminder of an offer or special event when they are near their favorite retail stores.

Driving mobile wallet adoption

50% 43% 25% 23% 23%

49%

No 67% Yes 33% 7%

44%

If I knew I would get better promotions and offers

If it would make my life easier by organizing things like offers/coupons, loyalty cards, etc.

If I knew I would get targeted and relevant offers based on my past purchase history and location

If I thought it would enhance my experience with my favorite brands

I am not interested in trying a mobile wallet tool

Negatively impact

EnhanceWould not impact

either way

Mobile wallet usage Perceived impact

What would influence you to try

Base: Total n=1,000; Non-users n=670Source: Vibes 2013 Mobile Consumer Survey – August 2013

What would influence you to try a mobile wallet and what impact would it have?


There are many channels that allow consumers to receive mobile wallet items. Email is the most preferred method for receiving mobile wallet content (46 percent), followed by a retailer text message (20 percent).

Only 19 percent of consumers prefer to receive mobile wallet content from an app. This indicates that contrary to what many retailers and consumers believe — that you need to have an app in order to

receive mobile wallet content — there are many ways to deliver mobile wallet content.

When retailers think about distribution, they should consider the audience and what is the easiest way to deliver the content to them in order for them to take action. Text is convenient because the consumer is receiving that message on his/her phone, so there is one-click access to getting that content into a mobile wallet.

Mobile wallet distribution preferences

46%

20% 19%

11%

4%

Email

Text message from the retailer App from

the retailer

Direct mail

Mobile banner advertisement

How do you prefer to receive mobile wallet content?



Consumers would like to receive mobile wallet content on a regular basis, with the majority of consumers (55 percent) preferring to receive mobile wallet content weekly.

This further validates the opportunity for retailers that leverage coupons and offers to create a perpetual coupon, which lives on a consumer’s phone and can be updated automatically. In addition, it demonstrates the importance for retailers to have a technology platform that can manage and dynamically update content.

Instead of adding weekly mobile content from their favorite retailers, consumers would only need to add the content once, and it would be automatically updated with new offers and promotions. The same is true for retailers with loyalty programs that leverage exclusive events and offers to drive in-store traffic.

As stated earlier in this report, consumers respond favorably to content that is tailored to their preferences. The more personalized the content, the more likely consumers are to redeem an offer.

Mobile wallet frequency preferences

How often would you like to receive mobile wallet content?

12% 55% 18%

3%

1%

12%

Daily Weekly Monthly

Quarterly

Annually

NeverBase: Total n=1,000Source: Vibes 2013 Mobile Consumer Survey – August 2013

Embracing the mobile

wallet opportunity

5 tips to execute successful mobile wallet programs

Being precise with the locations you put into your mobile wallet content is important. There is a 100-meter range around the location point that will alert the consumer that they have an offer waiting for them. Many brands have imprecise location information. With location-enabled mobile content, you want the location to be the entrance to the mall, the front door, or the center of your store.

The closer we get to real-time data from point-of-sale systems, the more power the marketer has with their offer and the better the consumer experience can be. The dynamic nature of the non-payment side of mobile wallet, coupled with real-time redemption information, enables advanced programs where incentives can change based on time, location, number of redemptions and even inventory.

Updating mobile wallet content drives incremental traffic from existing consumers that intended to interact with your brand. Let your most loyal customers know when you have new merchandise in-store, sales, events and more. Because of the location-aware capabilities of mobile wallet, you are able to subtly remind consumers when they are near your store.

Location

Time-sensitive offers

Update your mobile offers…

frequently

Here are five tips to help you execute mobile wallet programs that drive engagement, loyalty, foot traffic — and your bottom line.

This research shows that consumers are ready and desire to take advantage of the non-payment side of the mobile wallet. The good news for marketers

is that unlike other marketing programs that require heavy investments in time, infrastructure, program management and resources, getting started with mobile wallet is easy. Build your strategy, select a technology partner and get started. It’s that simple to get started today!

We like to think of mobile as the ultimate form of personalized media. It can be individualized to each consumer. If you are executing mobile marketing programs, you should be collecting an incredible amount of data based on time, location and interaction. Leverage this data to create personalized mobile wallet content for your loyal customers based on their preferences, behaviors, purchase history and more.

Lastly, it is important to develop a predefined set of metrics to better understand your brand’s potential with the non-payment side of mobile wallet. Although many marketers are going to want to quickly get to market – and record stats as they go — it is critical to first figure out how your brand is going to quantify results and identify success. Bottom line – you have to measure.

Personalize, personalize, personalize

Measurement and

optimization

11Embracing the mobile wallet opportunity@Vibes 2013. All Rights Reserved.

12Overview & methodology@Vibes 2013. All Rights Reserved.

Overview & methodologyThe Vibes Mobile Consumer Survey was fielded by the independent panel research firm Equation Research. Responses were generated from a survey among 1,000 smartphone owners from their online opinion panel. All respondents are age 18 or older and living in the continental United States. The margin of error for the survey is +/-3.1 percent.

Founded in 1998, Vibes is a mobile marketing technology leader that helps some of the world’s biggest brands acquire, engage and deepen relationships throughout the customer lifecycle. Vibes’ Catapult mobile relationship management (MRM) platform enables brands, agencies and media companies to launch a wide range of mobile solutions. Vibes integrated mobile wallet capabilities into Catapult right when Apple introduced Passbook in September 2012 and has been at the forefront of the non-payment side of mobile wallet ever since. Recently

named a “Cool Vendor in Mobile Marketing” by Gartner Research, the company has delivered more than 3 billion mobile experiences on behalf of customers that include Sears, Verizon, Allstate, The Gap, Tribune, Fox, Crispin Porter + Bogusky, Gannett and the Chicago Bulls. Vibes is one of only seven Tier 1 aggregators with secure, direct connections to all the major carriers. To learn more about Vibes, visit www.vibes.com or connect on Facebook.com/VibesMedia or Twitter.com/Vibes_Media.

About Vibes

Catapult is a cloud-based mobile relationship management platform that enables direct marketers to build deeper relationships with their customers that drive revenue growth and loyalty. The foundation of Catapult is mobile messaging and activation – text messaging (SMS), push notifications and QR codes. Catapult also offers strong capabilities for post-click engagement such as mobile landing pages and mobile coupons.

Catapult includes features for Mobile Wallet Management that help marketers leverage the power of Apple’s Passbook and Google Wallet Objects for mobile offers and loyalty. Catapult’s advanced targeting and segmentation capabilities enable marketers to create closer connections with their most valuable customers through smart, targeted mobile experiences. Learn more about Catapult at www.vibes.com/platform.

About Catapult

vibes.com 312.753.6330 main312.589.6960 [email protected]

mobile wallet consumer report non-payment opportunities for marketers

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