Target rolls out much-anticipated mobile wallet feature
Target has introduced a mobile wallet capability in the Target app for REDcard users, a move coming a little over two months after the retailer said such a capability was in the works, according to a Target blog.
The new feature, simply called Wallet, allows users to pay for items at Target stores by scanning their phones at checkout. According to the company, the feature will also allow customers to keep Cartwheel offers, Weekly Ad coupons and payment options in the same app.
Target's new mobile wallet, which is now available for both the iOS and Android versions of the Target app, joins a growing movement in the grocery industry to speed up or altogether eliminate checkout.
Target's decision to join the mobile wallet club is a good one, albeit a little later than some other retailers. While there are already a lot of companies out there — mobile device firms, retailers and others — with mobile wallet capabilities, mobile payment adoption is still in a very early stage of its evolution, giving Target a leg up over smaller retailers.
Retailers such as Walmart, CVS and Starbucks launched their mobile wallet entries well before Target did, but among grocery companies Target is running ahead of the pack. Kroger plans to roll out its "Scan, Bag, Go" mobile payment system to more than 400 stores — a big move for that company, but that only covers a fraction of its overall store count.
According to a recent report from Bank of America, just $1 out of every $148 spent at grocery stores comes from a mobile wallet.
To try and woo shoppers to pay via mobile, Target advertises its new wallet as a quicker checkout than paying via other methods, and one that combines mobile pay capabilities with rewards and deal offers. For retailers, that basic line of argument could be enough. For example, Walmart Pay has already been projected by Crone Consulting to overtake market leader Apple Pay in mobile payments usage by the end of next year. Target may have a ways to go to catch up to Walmart in this arena, but mobile wallets for the most part are not tools for beating up the retail competition. There's a lot of potential upside in terms of increasing customer loyalty and very little downside.
The mobile payments market could come to be dominated by big-name retailers, though market share in this segment may not be as important to them as longer-term goals of using mobile wallets to extend their brand value and strengthen their bonds with shoppers that have been using other companies' payment methods for years.
— Jeff Wells contributed to this report
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