Mobile Platform: Acceptance vs. Engagement

 As the adoption of mobile commerce technology increases, merchants must inevitably consider the means through which they will integrate mobile into their current consumer experience. Some merchants will opt to enable mobile payment through consumer programs such as Android Pay or Apple Pay; in mobile terms, we call this Acceptance. Other merchants may opt to build a merchant-branded solution specifically designed for their brand experience with add-ons like loyalty programs, offers and discounts; we call this Engagement.
Ultimately, the decision between Acceptance and Engagement should be consistent with the merchant’s overall marketing and payment strategies, mobile commerce vision, desire for speed to market and future roadmap for this program.
One of the key differences between Acceptance and Engagement is the ownership of the solution. In introducing Apple Pay in September 2014, Tim Cook’s strongest call to consumers was the promise that Apple would not be collecting consumer data through Apple Pay. While Cook’s promise is a beacon for consumers, it does not appeal as strongly to merchants looking to gain insight into their consumers’ preferences and spending habits. In a merchant-branded mobile solution, merchants can capture data on their consumers’ transactions and popular items, thereby creating powerful insight into consumer behavior. Analysis of this data can lead to the implementation of operational changes that impact the retailer’s conversation with the consumer, thus contributing to brand differentiation.
Of course, the implementation of mobile Acceptance is often more easily facilitated than the design and implementation of an Engagement model. To merely Accept mobile payments may require upgraded hardware, software, and an API into an existing mobile platform. To Engage consumers through their mobile devices is a more ambitious undertaking. Developing a customized solution that offers consumers an experience tailored to a merchant’s current brand experience requires complex integrations across both internal and external technologies. In many cases, the merchant will contract with third party organizations that can provide best in breed development of mobile functionality, processing of payments, and targeted consumer communications. The integration of multiple third party organizations demands a project team to design the solution, select the third party organization(s) with whom they will be working, and then ensure that these organizations deliver the promised functionality on time and within the specified project budget.
Though more cumbersome to implement, a thoughtfully executed Engagement model can offer a specific one on one relationship between the merchant brand and the consumer. Instead of the consumer using one mobile wallet to purchase with multiple brands, the consumer downloads an app to directly engage with a particular brand. If the consumer consistently engages with the app, then the merchant has established an additional channel through which they can reach loyal consumers. This is arguably the most engaging channel, as Millennials check their phone, on average, 43 times per day. However, the risk in creating a merchant-branded app is that the consumer does not engage with it. According to a survey conducted by Google, 38% of consumers are likely to download an app when needed to complete a transaction, yet half of those consumers uninstall the app immediately following purchase. A consumer’s phone is precious real estate. To prevent deletion from the mobile channel, a merchant must create and demonstrate value in a simple way.
To demonstrate sufficient value, the Engage model should reach beyond payments. Loyalty is a key factor, but with Apple’s announcement that the next release of Apple Pay will integrate loyalty and rewards, the consumer experience in a merchant-branded app must go beyond loyalty and payments to successfully engage the consumer. Ultimately, mobile should be viewed as an integrated complement to the existing consumer experience.
 

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