Editor’s note: Viktor Marohnić is CEO and Co-Founder of ShoutEm, the mobile app creation platform. With offices in New York and Zagreb, ShoutEm helps startups and small businesses create apps that boost loyalty and increase revenue.
When Apple Pay launched on October 20, Cupertino announced partnerships with big brands such as Whole Food, Macy’s and McDonalds. But what about all the mom and pop stores around the country – how are they going to benefit from it?
Apple Pay introduces an easier way for all of us to pay in partnership with big brands, but the fact that Apple has opened up its API for third-party developers could also revolutionize existing SMB apps.
Until today, most of the apps that SMBs have built for their clients faced a lot of hurdles to reach their intended audience. For customers they were hard to discover, there was no reason to use them in-store and using it for payments was a complicated and convoluted process. With Apple Pay, the biggest hurdle – getting the customer to enter their card details into the app – has vanished and the onboarding process got so much easier. This is encouraging for small businesses, and this is not all that Apple has done to help them.
Starbucks is one of the best-known examples of a coffee shop app that has significant numbers of regular users, because it connected all the key details in a really awesome user experience. It combines pre-ordering, payments and loyalty into a single seamless flow. Few companies have the resources that Starbucks does, but with the latest iOS developments, smaller brands have the opportunity to create something just as good.
Apple Pay, iBeacon and local app discovery functions make it possible to create an app that will be much more useful for customers and will drive engagement that both users and business owners can benefit from.
iOS location services mean that apps will get promoted on a customer’s home screen as soon as they walk by the store and iBeacon can wake up an app when the customer walks into the store. It can then remind them to open an app to check out current deals or exchange their loyalty points for rewards. When they get to the checkout, the app will prompt them to pay their bill using Apple Pay and collect their loyalty points.
If a customer is using an app multiple times in a single visit to a store, a retailer will be able to track not only walkins, but more importantly sales in their stores and build customer data that will have much more insight than a simple mailing list, which was until now the default way to push news and promotions to their customer base. With the data from the app, they have information about customer purchase history, spend, frequency of store visits and location, so they are able to target their customers in a much smarter way than through a mailing list or a Facebook page.
The Top Priority for SMBs Is Repeat Custom
The top priority for small retailers is to keep customers coming back – a regular punter is worth so much more than a one-off customer. With an app that is integrated with the POS (point-of-sale) system, Apple Pay and iBeacon technology, these retailers can get customers using their phones much more frequently while they are in the store. This translates into more engaged customers, mobile loyalty membership clubs, getting customers to the stores on the slow days and, in the end, generating more revenue.
The current situation is that customers are not incentivized in any way to take their phones out, launch the app and use it while in the store. Cash or credit card is a convenient way to pay at the cash desk. There is much room for improvement.
Small retailers that offer their customers the ability to make quick, convenient, cashless payments for low-value transactions can really steal the march on their competitors. Developers also have the opportunity to build white-label services integrated with Apple Pay to win new business.
In the next year or two we are going to see many apps for our favorite small stores coming out and offering an amazing user experience. For those stores that customers are visiting on a regular basis, an app will be the primary way of buying, collecting loyalty points and receiving smart, targeted promotions based on our relationship to that business.
So, as a small retailer, there’s a real need to engage with what Apple is doing right now. Upgrade your POS systems and mailing lists. Get an app – the ultimate marketing channel for today’s world. But remember to make it work for you, as well as your customers.