Here's Why Entertainment and Hospitality Businesses Need to Embrace Digital Wallets NOW
February 2022
One thing the COVID-19 pandemic has done is accelerate trends. Changes in consumer and business behaviour that strolled along before the great upheaval of 2020 quickly shifted into high gear.
And nowhere is this clearer than with how people make transactions.
Two underlying forces are driving this change: contactless transactions and smartphone usage.
And it's not just confined to how people make payments. Its effects have already moved into consumer engagement and digital marketing. Businesses are already using contactless transactions to drive how they manage their customers' data, how they communicate with them, and they're even putting these in the control of the customers themselves.
The trend to contactless payments and engagements, where consumers make their transactions by holding their credit or debit card near the card terminal – and not by swiping or inserting it – was already popular prior to 2020. But it took hold following the start of the pandemic.
Mastercard's global consumer study in 2020, which interviewed 17,000 consumers in 19 countries, revealed nearly eight out of 10 consumers make contactless transactions and that the majority of respondents (82 percent) view contactless as the cleaner way to pay.
Adding fuel to the growth of contactless transactions is the widespread ownership of smartphones, with the Commonwealth Bank reporting in May 2021 that Aussies are choosing digital wallets as their preferred way to pay when shopping, compared to tapping a card.
Having so many smartphone owners demand more contactless transactions has driven the uptake of one particular online service: digital wallets.
Digital wallets are virtual transactions stored on a mobile app or computer. They make it quick and simple for consumers to conduct transactions of all kinds – from payments to membership verifications to collecting and using loyalty points – either online or at venues.
They put into smartphones what we’ve typically kept in our physical wallets; stuff like cards (credit cards, debit cards), tickets (for travel and events) and forms of ID (such as membership cards).
Digital wallets will continue to thrive due to open banking, which began in the UK around three years ago. New regulations released consumer financial data from the banks’ ownership and put it into the hands of consumers, letting them share their transaction data with authorised third-party providers – should they permit it.
Open banking gives two huge advantages to consumers: it increases their ability to find new products, and it puts the focus on their needs.
It’s also making it easier for merchants. Real-time account-to-account transactions is an example.
Australia went live with open banking in July 2020.
And today the uptake of digital wallets is accelerating, and not only because 9 out of 10 Australians own a smartphone.
It’s also because open banking is driving the consumer payment experience.
And this is where digital wallets plug in to the Hospitality and Entertainment sector: our industry is in the business of providing experiences.
Success is no longer about the goods or services a venue provides; rather, it’s about how those products and services provide a positive, engaging experience.
Businesses that deliver smooth, low-effort experiences that grab their customers’ attention will be the ones that thrive into the future.
Multiexperience (MX) is an emerging approach. It focuses on integrating the employee journey with the customer journey, creating an effortless experience for both. Technology is the enabler here, and digital wallets make the experience happen.
The more information, tools, and technologies available to the employee – and the more effortless it is for them to access and use them – the easier it is to provide standout service that meets customers’ needs.
Hospitality venues need to consider their customers’ entire journey: from home, to the venue, and home again. Think about how you communicate with prospective and existing customers when they’re not in the venue; the ease of identification and access when they visit; and their experience with every engagement touchpoint when they’re in the venue.
A consistent experience with brand recognition at every one of these touchpoints will drive lasting customer loyalty.
And digital wallets are the key to achieving it.
Things such as self-service represent a massive win for both customers and employees – but it must be done right. It also needs to be integrated with the rest of the customer journey and venue systems.
In a recent survey, Leagues Clubs Australia asked its members about their post-pandemic business priorities. Their responses show a shift to embracing digital technologies to remain relevant to their communities, members and guests: 81 percent of respondents indicated digital and mobile will have a bigger role in the future.
Personalised offers and online engagement were two of their three most popular areas of focus.
The other was digital wallets.
Digital wallets are a powerful platform for hospitality and entertainment businesses.
They enable better customer experiences, more effective marketing and clearer communication with members and guests.
Customers tend to spend 25 percent more with a digital wallet.
They build better relationships with customers because they let them control when and how they want to engage with you.
Digital wallets open the door to introducing promotional partners to your customers, the value of which has been estimated at about $300 per active member per annum. It means another revenue stream for businesses with active membership databases.
Payments made with digital wallets also provide increased security against fraud and improve the integrity of your customer database with accurate user information.
There’s more.
But here’s perhaps the biggest business advantage of a digital wallet:
It provides a trusted brand experience.
They make it easier to convert prospective and existing customers into buyers today.
The digital wallet provides an instant and lasting communication channel for your customers, with unparalleled install and retention rates. When they have a trusted brand experience, we know that:
The user is always opted in and your business isn’t fighting for increasingly scarce real-estate on their mobile device.
The simple fact is this: the future is customer-driven.
The individual customer wants the power and authority at their fingertips for convenient, secure and safe interactions.
It’s why global giants in e-commerce and m-commerce like Amazon Prime, WeChat Pay and Alipay are investing right now.
It’s why the average smartphone owner uses 10 apps a day and 30 apps each month.
It’s even why Baker’s Delight replaced its little cardboard loyalty cards with a mobile QR code.
So, what should you do?
If you haven’t already, look at your marketing and digitalisation strategies.
Look at the best applications that suit your type of hospitality and entertainment business.
For food & beverage, loyalty, events, and membership identification, you can get this going today.
And for retail operations and the broader hospitality industry, digital wallets are becoming essential to compete.
Digital wallets can be integrated into your operations and existing customer communication channels. This includes email, SMS, your website, QR codes, social media, and more.
The digital wallet you choose must have these abilities:
That it can be easily implemented and integrated with your venue’s systems, and it has the flexibility to grow in the future without large consulting costs.
Make sure you consider how it integrates with your:
The bottom line? Digital wallets add significant value to customers and businesses, both now and into the future. Whether your customers are at home, enjoying a fast transaction at your checkout, or watching their loyalty rewards from you grow, digital wallets are driving the customer journey.
It’s an accelerating trend. Don’t get left behind.
If you want to discuss further the potential of mobile wallets for your business or your general digitalisation strategies please reach out to me directly at craig@cherryhub.com.au or visit us at www.cherryhub.com.au/cherrypay