The ShippingPass pilot program launched last year and offers free shipping on all orders.
Most consumers anticipate little need to replace credit cards with a smartphone.
Retailers still have time to prepare for the day when many consumers use smartphones to make purchases, according to a new report. Only 38% of 1,200 consumers surveyed by Kantar Media Compete said they were aware of mobile tap-and-pay services. 68%, however, were aware they could pay bills using mobile services offered by banks. The survey also found that only 12% were likely to make a tap-and-pay transaction, and 11% were likely to use mobile bill payment services.
Several companies are relying on consumers replacing their credit cards with digital wallets stored on their smartphones. Consumers would tap their phones against a contactless reader on a retailer’s countertop to complete a transaction. Google Inc., with its Google Wallet, is among the first to offer the service, though Visa Inc. and Isis, a mobile commerce firm started by AT&T Mobility, T-Mobile USA and Verizon Wireless, are working on similar schemes.
Consumer awareness and availability of contactless technology in smartphones are the keys to early success, says Jennifer Canfield, senior associate in Compete’s financial services practice.
“Most consumers don’t have access to the technology,” Canfield says. Many consumers do not see a need for tap-and-pay capable smartphones, she says. “We’re years away from adoption,” she adds. “Until consumers are convinced there’s a real good use case for adoption, it’s going to be pretty slow going.”
Canfield suggests it might be five years before such technology is widespread. Consumer adoption is one side of the coin: Merchants must see a reason to accept the mobile payment method. OfficeMax Inc. is one company that apparently does. It announced this week it would accept Google Wallet transactions, including payment, rewards and coupons, at 100 stores in five cities.
Retailers have to determine their readiness for this advanced payment technology, Canfield says. Not every company should, or can, mimic OfficeMax, she says. “But it’s certainly the time to start having conversations, and have plans as these programs roll out,” she says.