This story was delivered to BI Intelligence "Payments Briefing" subscribers. To learn more and subscribe, please click here.
Masterpass, the Mastercard-affiliated buy button and mobile wallet, has partnered with Dunkin' Donuts to give consumers a fast and convenient way to buy and reload virtual Dunkin' Donuts' cards online and on the Dunkin' mobile app.
This deal will be mutually beneficial for both companies as Masterpass hopes to increase usage and use cases, while Dunkin aims to appease a growing digital segment.
- Dunkin' Donuts has a digitally engaged audience. DD Perks, the coffee chain’s rewards and loyalty program, which is often accessed via the Dunkin' mobile app, has more than 6 million members — these members accounted for more than 10% of the company's US sales in Q1 2017. On top of that, Dunkin reported roughly 70% growth in mobile payments as well as nearly $1 billion in system-wide sales on the Dunkin' Gift Card. Access to this large and growing consumer base will likely boost Masterpass usage.
- Pushing new digital offerings will be essential for Dunkin' to catch up to rival Starbucks. Often looked at as an industry leader in digital payments, Starbucks Rewards has more than 13 million members and has seen mobile payments grow to represent 29% of transactions in Q2 2017, up from 27% in Q1. If Dunkin' hopes to replicate this success, it must push out convenient and popular new features. Adding Masterpass could help to meet some of these standards, as it reduces any friction associated with digitally buying or reloading cards by not requiring users to reenter payment information, shipping details, or payment preferences.
Retailers like Starbucks and Dunkin' Donuts are winning over consumers with their mobile wallets — apps developed by stores to make it easier for their customers to pay, and to deliver valuable perks.
And these retailer wallets are leading the overall mobile wallets industry, thanks to their ability to rapidly push out innovative features like rewards programs, coupons, mobile order-ahead, and custom marketing.
This may be surprising considering that retailer mobile wallets can be used only at a specific retailer’s locations; in contrast, popular universal mobile wallets like Apple Pay and Samsung Pay can be used at multiple retailers, as long as users are using the necessary smartphones.
Ayoub Aouad, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on retailer mobile wallets that assesses what makes them so successful and which retailers can most effectively leverage the technology to push sales, traffic, and average ticket size. The report also outlines what makes these mobile wallets attractive, and discusses some of the advancements being made in the payments industry that will affect mobile wallets' growth rate.
Here are some key takeaways from the report:
- Retailers with large addressable user bases who are loyal, repeat visitors, will see their mobile wallets continue to be popular with consumers, especially as there continues to be slow merchant adoption of near-field communication (NFC) technology as well as weak offerings by universal mobile wallets like Apple Pay and Samsung Pay.
- Loyalty programs will be a significant driver in retailer mobile wallet adoption. Companies like Starbucks and Dunkin' Donuts have been able to leverage their loyalty programs to acquire mobile wallet users, which, in turn, has driven store traffic and conversion rates.
- By leveraging these programs, sales are expected to grow at a five-year compound annual growth rate of 68%.
- However, adoption will begin to decelerate as a result of increased competition by 2020. As universal mobile wallet players begin to add effective loyalty programs and coupons to their offerings, adoption for retailer-based mobile wallets is likely to slow down because these offerings are their main marketing points.
In full, the report:
- Explains what hurdles universal mobile wallets have faced.
- Details what features retailers have adopted into their mobile wallets that have been successful
- Analyzes the use cases of retailers that have successfully leveraged their mobile wallet offerings to push growth.
- Identifies how universal mobile wallets will eventually slow growth for retailer-based mobile wallets.
Interested in getting the full report? Here are two ways to access it:
- Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> START A MEMBERSHIP
- Purchase & download the full report from our research store. >> BUY THE REPORT
Facebook
Twitter
Pinterest
Instagram
Google+
YouTube
LinkedIn
RSS