www.google.com/wallet MasterCard Paypass www.mastercard.com
The new old retail
Technologies impact on impulse
A late 2011 study reported 76% of over 1,000 British adults make impulse purchases. Out of that 76%, 77% of women and 71% of men stated those purchases happened when grocery shopping. Major pushes for impulse buying are due to advances in technology combining with mega trends like health and wellness, on-the-go, affordable indulgences, and lower overhead costs to brands. This blend creates new opportunities for every value chain member in the food and beverage industry. As these trends persist, brands can create new revenue streams by giving consumers a delightful experience through impulse purchases.
There is a consistent blending of the virtual and physical retail world – and this includes the consumers’ wallet. Google has launched Google Wallet, which uses Near-Field Communication technology to allow consumers to use their phones as a tap-and-pay device at any MasterCard PayPass device. The application is still in an early phase of its lifecycle as consumer acceptance and retail availability both grow. One hurdle Wallet faces with mass adoption is the number of banks participating. Currently it is linked with MasterCard and a reloadable Google card, but the device needs more brands like Visa and American Express; as well as debit card capability.
Another is the number of phones equipped with NFC, which is currently lacking. With an already impressive number of retailers supporting the Wallet system, this new payment method should continue to grow. More recently, it is expanding into five more US cities: Charlotte, Kansas City, Milwaukee, San Antonio, and Tampa. Connecting pay methods to smartphones streamlines the purchasing process, making impulse purchases more immediate and tangible.
Transit... a Key Impulse Purchasing Destination
Tesco’s South Korean-based grocery chain, Home Plus, has been capitalizing on consumers’ busy lifestyles and mobile technology by creating a shopping experience at subway terminals. Large posters mimic the grocery shelf with pictures of products that are labeled with QR codes. While consumers wait for their ride, they can scan and purchase different grocery items that will be at their doorstep by the time they get home. During it’s trial run, Home Plus reached more than 10,000 customers and saw a 130% increase in online sales. Surprisingly, such a system has not yet hit condensed US markets such as New York City, which has an average weekday metro ridership of over 5 million.
By understanding the consumers’ daily journey, transit points and time between transit points, these grocers have been able to identify a profitable new business model whilst tapping into the impulse market. The chocolate confectionary market is just one portion of the impulse market and is expected to grow to US$19 billion by 2015.
...accelerate the consumers’ purchasing decision process, making impulse buying more convenient.
Both examples accelerate the consumers’ purchasing decision process, making impulse buying more convenient, more impulsive. Brands need to continue to explore ways to streamline purchasing decisions and the barriers by syncing their products and services with technology and the consumers’ daily journey.