How Five Retailers Are Catering To Smartphone Shoppers

Consumers are tethered to their smartphones, and their affinity for connected devices extends into commerce – they are using these tools when they go shopping, even as they peruse the aisles of their local brick-and-mortar stores.

According to the PYMNTS Remote Payments Study, connected devices are changing the relationship between shoppers and physical stores. For shoppers who rely on smartphones, the “face” of the modern retailer is becoming its mobile website and app.

The study also found that 10.5 percent of the shoppers who paid in a brick-and-mortar store used a smartphone at the register. Retailers from Kroger to Starbucks, as well as Shell, Dollar General and Macy’s, are rolling out their own mobile apps with smartphone-based payment options to meet the needs of the connected consumer.

About a quarter – or 24.8 percent – of respondents who paid via smartphone for purchases on location were at a grocery store. Kroger, for instance, has a technology called Scan, Bag, Go, which lets shoppers use their smartphones to select products as they shop. Once consumers have finished making their selections, they can scan their phones at a checkout station. That action digitally submits their payments and the shoppers exit. In a January report, Kroger noted that future versions could store payment data so customers can make a payment without visiting a station. Kroger CEO Rodney McMullen told investors last year, “Today, households that engage in our seamless offerings, engaging digitally and with our physical stores, spend more per week than households that do not. The future looks even more promising.”

Nearly three in 10 – or 27.1 percent – of respondents who paid via smartphone for purchases on location were at a quick-service restaurant (QSR). And, according to a May report from eMarketer, Starbucks is the most popular proximity mobile payment app. The report said that 23.4 million consumers who are age 14 or older will compete a point-of-sale purchase at the coffee chain at least once bi-annually. “That puts it slightly ahead of the 22.0 million people who will use Apple Pay,” the firm noted. “Google Pay (11.1 million users) and Samsung Pay (9.9 million) will round out the top four payment apps.” The ranking will remain unchanged through 2022. But the eMarketer report said that while those four biggest apps will continue to gain U.S. users through 2022, “their share of mobile payment users will continue to drop. That can mainly be attributed to new payment apps entering the market, particularly merchant-branded mobile apps.”

Fifteen percent of respondents who paid via smartphone for purchases on location were at a gas station. Shell, General Motors and mobile payments provider P97, for example, are using embedded in-dash technology with select vehicles to help consumers find and pay for fuel. Through the technology, drivers of certain vehicles made by Buick, GMC, Cadillac and Chevrolet can look for gas stations and make payments from within their vehicles at 11,000 gas stations that have the Shell brand on the North American continent. The navigation and payment features come via the GM Marketplace platform, which also lets consumers order food and coffee as well as set dinner reservations with participating locations.

Just under two in 10 — or 19.2 percent – of respondents who paid via smartphone for purchases on location were at a mass merchant. Dollar General, for instance, has a mobile app that lets customers pay for purchases using their smartphones. According to news from June, the discount chain’s DG Go! app allows shoppers to scan items with their phones as they shop and check out directly through the app. Shoppers receive savings alerts as they go about the store, and digital coupons are automatically applied directly in the app. The app keeps a running total of the order, and consumers can pay directly by scanning a quick response (QR) code at a dedicated checkout tablet at the front of the store. Shoppers can then bag items at a checkout station and see their receipt in the app or have it sent to them by email.

And under 5 percent — or 4.7 percent — of respondents who paid via smartphone for purchases on location were at a clothing store. In March, it was reported that Macy’s plans to roll out mobile checkout in its brick-and-mortar stores. Shoppers can scan an item’s barcode as they add it to their carts with an app, while it applies discounts and rewards through their loyalty account. After they have made their selections, customers visit a dedicated counter, where a cashier ensures they scanned the correct number of items and removes security tags from their purchases. As of March, the retailer had already tested the technology at a store in New Jersey. The innovations come as Macy’s seeks to evolve amid retail competition. CEO Jeff Gennette said at ShopTalk, according to CNBC, “It’s the most competitive [retail] environment we’ve ever seen. Macy’s heritage isn’t going to be enough to guarantee success.”

Mobile devices, of course, are also assisting consumers in searching for items to purchase. As tools for discovery, 12.5 percent of consumers who paid in store for their purchases found products by mobile, compared to 11.3 percent by computer and 4.2 percent by advertisements. The results suggest that mobile devices could help drive conversions for the connected consumer.