What Apple Pay Means for Marketers
Apple Watch was certainly the shiniest object in the room at Apple's big event Tuesday, and there are, no doubt, interesting opportunities for brands to play into its functionality. But Apple Pay -- a new mobile payment system -- presents many opportunities for marketers looking to reach and influence consumers at a most crucial point: purchasing. Before we dive into those possibilities, here's a breakdown of how the new mobile payment system works:
Pay replaces the need for a physical debit or credit card in an in-store transaction -- you just hover your phone (or your Apple Watch) over a near field communication (NFC) reader at the register and it near-instantaneously transfers payment information after a one-touch authorization.
Registering a debit or credit card with Pay is pretty simple -- you take a picture of the card, Apple verifies it, and the "card" becomes accessible through the Passbook app.
Over 220,000 retailers, including Macy's, Whole Foods, Walgreens, McDonalds, and Sephora are already equipped to work with Pay, with many more promised.
Pay also works as a one-tap system for in-app payments on the iPhone, with the Target app noted as an early partner.
Apple isn't the first company to introduce mobile payments -- it's not even the fifth or sixth. However, Apple has already overcome many of the pitfalls of past mobile payment efforts: It has major retailer cooperation, control of both mobile hardware and software, and enough notoriety to influence usage. Assuming that it takes off and, as Apple CEO Tim Cook said, "forever changes the way all of us buy things," here are a few marketing scenarios that Pay could enable:
Increasing in-app purchases
In the purchase funnel, mobile phones originally occupied a "research" function -- how much does it cost, where can I buy it, etc. However, nearly a third of all online purchases today are made with mobile devices. That number should continue to climb, thanks to a better browsing experience enabled by larger mobile screens (including iPhone 6 and 6+), as well as the new ease of in-app purchasing via Pay. Quite simply, it will be more enjoyable to shop on mobile phones. Thus, marketers should take another look at their ecommerce experiences by making them beautifully and thoughtfully designed to encourage adoption and repeat usage. The user experience also needs to be shifted in order to encourage and incorporate one-touch checkout.
More mobile messaging
Mobile ads are still struggling to find their way. Plenty of platforms have popped up, but most executions are just extensions of desktop display media. However, Pay gives iPhone users the biggest reason of all to have their phones in-hand while browsing a brick and mortar store. This increase in smartphone exposure could offer mobile ads a new lease on life -- NFC or iBeacon technology could trigger ads or notifications to appear while a person is shopping, and the proximity to the product could offer targeted messaging opportunities. (e.g. "The new Brand X shampoo is on Aisle 8" vs. "Try new Brand X shampoo.") There's also the possibility of serving up special offers.
Pushing in-store promotions
During the presentation, Pay was presented as a way to speed up a store's checkout process. That may not matter to your brand, but Pay's inclusion in the Passbook app could be another way for marketers to create positive shopping experiences. Passbook was released with iOS 6 as a central place to digitally store physical "passes" -- things like movie tickets, airline boarding passes and coupons. Although a connection wasn't mentioned in Apple's keynote, it's likely that the contents in Passbook will be integrated with Pay -- meaning stored coupons, promotional offers and loyalty programs could be integrated into the Pay checkout process. Brands should take another look at Passbook -- how and where their apps can offer promotional integration that drives brand preference and purchase. And could this integration finally mean the end of direct mail? I wouldn't be sad if it did.
Apple Pay may not be a sexy addition to your wrist or a long-awaited upgrade to your smartphone, but it does ease and encourage something all marketers can appreciate: the act of purchasing. Apple did the heavy lifting, now it's up to us to explore how to create experiences around this new approach to shopping.