Article

Mobile engagement is now a consumer expectation

Experts predict mobile payments will reach critical mass in the next few years.

June 6, 2013 by Alicia Kelso — Editor, QSRWeb.com

People have been trying to figure out how to keep up with technology for decades. That challenge becomes even more daunting when you consider the advent of mobile.

Noah Glass, founder of OLO online/mobile ordering, said mobile is the fastest growing technology ever, driven mostly by consumers who are adopting smartphones at a staggering pace; nearly 60 percent of Americans now own a smartphone.

Glass said brands are starting to add mobile as a new engagement platform for their customers, and the trend is similar to the late 1990s, when brands knew they needed to have a website. The trick to mobile is making sure your solution is functional enough to garner consumer interest.

"Brands know they need to have a mobile app now, but in order for a customer to download that app, you have to provide them with utility," Glass said. "It has to be functional and useful."

Functionality can come in the form of ordering (OLO, ChowNow, ONOSYS, EatStreet, etc.), mobile loyalty programs (such as a Front Flip, Punchh or Leaf) or payment solutions.

"Apps need to have a purpose — a loyalty or payment program, some interaction – not just the website re-created," said Sarah Erdman, with QA Graphics.

From a loyalty standpoint, Debbie Telsey, from Sunrise Marketing, said mobile is the best way to reach customers now because of accessibility.

"Email is spam. Nobody checks it anymore," she said. "If it's raining and business is slow, you can blast out a text special to drive business. Ninety-seven percent of mobile users who receive a text message open it within 4 minutes."

Payment positioned to skyrocket

At the recent National Restaurant Association Show, attendee and exhibitor consensus was that mobile payment is poised to take off. An indication of that trend is when NCR Corporation teamed up with LevelUp last month to bring their mobile payment/loyalty solution to NCR's restaurant POS systems. LevelUp will be one of the first companies to integrate into Cloud Connect, a new hosted infrastructure that will allow third parties to integrate, maintain and deploy the solution across NCR's install base of more than 100,000 locations on the Aloha, Radiant POS and Advanced Restaurant System platforms.

Heartland Payment Solutions also recently teamed up with LevelUp to jump into the mobile payments space.

Tony Ventre, senior marketing strategist for restaurants at Heartland, said consumers will continue to drive mobile payments at a quick pace and it's important for operators to find a reputable partner, not just a venture capitalist who is jumping into the space because it happens to be hot right now.

"With this, you're dealing with PCI issues, security; you need to find the right partners," Ventre said. "And if you find a solid solution, get it now. You have to make a move because it's moving so fast. And it can build your business quickly, too."

So quickly is the mobile space moving that Glass predicts we'll look back "10, maybe 5 years from now and laugh that we used to stand in line to make a payment to someone who had to punch in an order ...

"We have our own POS in our pocket and it makes for a better, faster experience," he said.

Viability leads to capital; bubble next?

According to Henry Helgeson, CEO of Merchant Warehouse, which delivers payment solutions and analytics, mobile has gone through the process of viability. Because of that process, there is now a "flood of venture capital," as Helgeson describes.

"Anyone can make a mobile app and last year's show featured a lot of novelty companies, many of which aren't here this year," he said. "But this year, there are better products. Developers are doing a lot of due diligence for merchants and the venture capital community is starting to understand mobile."

Ventre predicts we'll reach critical mass for mobile in the next three to five years. Helgeson agrees that it will be "a couple of years," and believes there will even be a bubble burst.

"People are throwing everything at this right now because it's an ideal solution for consumers and merchants," he said. "But we'll see oversaturation and then a few years from now, the leaders will emerge and we'll have a clear picture on what is really working."

Read more about multichannel retailing.

Cherryh Butler contributed to this story.

About Alicia Kelso

---

None

Connect with Alicia: