Consumer Enthusiasm for Digital Wallets Is Lacking
NATIONAL REPORT — Despite robust efforts to offer digital wallets by companies such as Apple, Google and PayPal, U.S. consumers are not that excited about the technology, according to the results of two Gallup Panel Web studies.
Digital wallets is a technology that allows consumers to store credit cards, debit cards, loyalty cards and coupons to make electronic purchases, most often using a smartphone. Chevron USA Inc., Maverik Inc., 7-Eleven Inc., Alimentation Couche-Tard Inc. and Kum & Go LC are among the convenience store retailers to express some level of interest in mobile payment transactions.
The research revealed that digital wallet providers can reenergize the digital wallet market by no longer overlooking a crucial component: engagement. Digital wallet providers who fully engage their users can reap financial rewards, according to Gallup.
The survey firm grouped potential digital wallet customers into three types:
- Fully engaged: These customers are emotionally attached and rationally loyal. They'll go out of their way to locate a favored product or service, and won't accept substitutes. True brand ambassadors, they are a company's most valuable and profitable customers.
- Indifferent: These customers are emotionally and rationally neutral. They have a take-it-or-leave-it attitude toward a company's product or service.
- Actively disengaged: These customers are emotionally detached from a company and its product or service. They will readily switch brands. If switching is difficult or impossible, they may become virulently agnostic toward the company. Either way, they are always eager to tell others exactly how they feel.
Gallup stressed that retailers should target fully engaged customers. According to the two surveys of more than 17,000 adults aged 18 and older, 21 percent of fully engaged customers said they would use a digital wallet "every time or almost every time" the option was available at a convenience store, compared to 13 percent of indifferent users and 3 percent of actively disengaged users.
On an overall basis, 30 percent of fully engaged users said they would use a digital wallet every time or almost every time this option was available at all retail outlets, vs. 12 percent of indifferent users and 2 percent of actively disengaged users.
Gallup also provided three tips regarding how to engage digital wallet users:
1. Make users feel special. Across all industries Gallup has studied, fully engaged customers buy more from their preferred company when that company makes them feel special, even when they aren't first-class passengers or private banking customers. The need to feel special is universal, and digital wallet users are no exception. Companies that provide offers and discounts through digital wallets — whether related to clothing, books or food — must make these benefits unique and relevant to each user's preferences, purchasing power and past transaction history.
2. Make it easy to do business. Most digital wallet providers claim they provide convenience so users don't need to carry multiple cards or remember their corresponding passwords or PINs. Gallup analysis shows users don't buy this claim, however, suggesting that digital wallets don't yet meet customers' expectations for accessibility. Consumers want digital wallets to be easy to install, upgrade, learn and use. They also want easy access to their payment history and past transactions. Perhaps most of all, they want to forgo their multiple credit cards and checkbook to complete their transactions through one — and only one — digital wallet.
3. Be helpful. Helpful employees are one of the key elements in creating and sustaining customer engagement, as decades of Gallup research shows. Even as technology proliferates, many companies and industries still heavily rely on people to provide a product or service, such as those in hospitality and health care. Of course, digital wallets aren't people, so this isn't an apples-to-apples comparison, but users will likely expect their digital wallet to be of service to them, more so than a physical wallet.