Digital Transactions Authoritative, insightful and timely information for payments professionals
By John Stewart
What kind of technology are grocery stores, drug stores, and convenience stores most interested in? Not mobile payments, at least not right now.
That’s the conclusion of the Los Angeles-based Center for Advancing Retail & Technology LLC, which operates an online marketplace of retail solutions for merchants of consumer packaged goods, the kinds of places where consumers shop every day. CART monitors product searches by its 30,000 users and ranks them according to a composite index score that measures both the volume of searches and the length of time spent on the results.
According to its first such ranking, which appeared on Thursday and takes account of all searches since the beginning of the year, mobile payments ranks 37th out of 38 technology categories, notching a composite index score close to zero. CART defines mobile payments as services like Apple Inc.’s Apple Pay and other digital wallets that let consumers pay with virtual payment cards at the point of sale.
Instead, users are zeroing in on e-commerce and online-shopping tools that help merchants put their stores online, manage inventory, and handle payment. That tech category came in first with a composite index score of 4.31, says CART, which opened its solutions marketplace about a year ago. That’s 215% above the 2.00 mean score for all 38 categories.
Still, despite the big yawn over mobile payments, tablets and mobile-checkout solutions came in second, with a score of 3.89. “The fact that came in number-two somewhat surprised us,” Gary Hawkins, chief executive at CART, tells Digital Transactions News. “It confirmed this is an area of real interest to the retail industry. We feel the traditional [point-of-sale] business is ripe for disruption.”
Hawkins thinks interest in mobile wallets will pick up in coming years, but right now grocers and other merchandisers are struggling to manage other priorities, which include a belated upgrade of their Web sites. “Retailers of all sizes have a lot on their plates,” he says. “They’re focused on e-commerce, and feel pressured to get into the online game. They haven’t had the bandwidth to focus on [mobile payments] yet.”
It’s true that the EMV rollout induced merchants to install new terminals that can not only handle chip cards but also process wallets using near-field communication technology. But not all merchants have acquired the new terminals, let alone activated NFC. “The fact of life is a lot of retailers don’t have it in place yet,” says Hawkins.
His bright prediction for mobile payments may, at least in part, be borne out by the fact that some nine grocery, seven c-store, and two drug-store brands have joined 22 other retail companies to support Merchant Customer Exchange LLC, creator of the CurrentC mobile wallet now being tested in Columbus, Ohio.
Other relatively low priorities, as indicated by their composite index scores, are social-media tools (ranked 28th) and location services, the only category to rank worse than mobile payments. But Hawkins argues location services—which comprise solutions that let merchants pinpoint where customers are in the store so they can deliver immediate offers to them—may have suffered because retailers see them as part of a larger mobile-marketing category, rather than as a distinct category of their own, Indeed, mobile marketing itself ranks much higher, in 14th place.
“Location by itself is not as appealing to the industry as location as part of a solution,” Hawkins says.
