Why Faster Checkout Could Be The Key To Boosting Retail App Adoption

In June, Costco launched a revamped digital membership app that allows members to use its mobile device rather than flashing a physical card upon entry and during checkout. Convenient? Yes.

However, it can’t be used for in-app payments.

This can’t be interpreted as an oversight, considering a new PYMNTS report about “everyday apps” found that mobile users rarely make in-app payments.

How Do Consumers Use Mobile Apps In-store?

While mobile technology has become an integral part of the in-store experience for many shoppers, they rarely use such tools to make in-store payments. Just 12 percent report using a merchant’s app on their devices to make such payments, and only 11 percent say they rely on mobile wallets at brick-and-mortar locations.

A majority (53.0 percent) of in-store shoppers use merchants’ mobile apps to access value-added features like coupons and purchase histories, making it the most common digital channel through which they enhance their brick-and-mortar shopping experiences. Offering an app doesn’t a guarantee retailers popularity or loyalty, though. Fifteen percent of in-store shoppers use other merchants’ apps, for example, and 6.9 percent utilize third-party offerings.

Notably, a large number (45.3 percent) use mobile web browsers, not apps.

in-store shopping experiences

Much has been made about app fatigue, yet retailers keep launching them. With most mobile users storing five or fewer apps, there would appear to be little room for new merchant offerings to enter the market. Most consumers are unwilling to download and use more than a few of these apps, with 63.4 percent indicating they have between one and five stored on their mobile devices, and 14.3 percent reporting they have downloaded none.

Apps Replacing Checkout Lines

What does it take for consumers to download new retail apps?

Despite the fact that not many consumers use apps for payment, there is a healthy amount of interest in paying via app, now and in the future. Nearly half (48.6 percent) of consumers would be interested in future apps that allowed payment and 32.1 percent are interested in that feature currently.

The secret might be not just enabling in-app payment but also the ability to check out faster — or potentially skip the checkout line altogether. Paying via merchants’ apps is also a draw for many respondents, including 48.6 percent of those interested in future apps and 32.1 percent of those in current ones.

More importantly, 85.1 percent are currently “very” or “extremely” interested in using a retail app to speed up checkout, while 92.8 percent indicate this same high level of interest in apps that offer quick checkout in the future.

current or future apps

Mass Merchant Apps Have Mass Appeal

According to the study, all retail apps are not created equally. Mass merchant apps are far more popular than other types; 83.3 percent of all consumers would like to download apps offered by mass merchants they visit frequently. This was more than six times the share of respondents who say they would download those from any other merchant type.

merchant apps

Specifically, Amazon, Walmart and Target represent the top three apps consumers are most interested in downloading, cited by 51.8 percent, 51.3 percent and 34 percent of them, respectively. Kohl’s (12.6 percent), Macy’s (4.4 percent) and Sam’s Club (4.1 percent) followed, meaning six of the top 11 are mass merchants.

Who Uses Merchant Apps?

Everyone uses retail apps to some degree. The biggest users are millennials, Generation X and bridge millennials, the sub-segment of those ages 30 to 40 with higher incomes. Nearly three-fourths (72.3 percent) of millennials, 81.6 percent of bridge millennials and 75.8 percent of Gen X use merchant apps in store frequently. Seniors make up the largest group (77.4 percent) of occasional users.

Generations app use

Nearly every generation exhibited more interest in downloading hypothetical, future apps than those currently offered by merchants, an indication that retailers still have work to do. For example, 43.4 percent of millennials report being “very” or “extremely” interested in current apps from retailers they frequently visit, while 59.1 percent indicated interest in future apps from these same retailers.

Different generations have different motivations for wanting to download merchants’ current or future apps when making payments, though. Millennials, bridge millennials, Generation X and baby boomers showed more interest in using current apps to help avoid checkout lines than in earning and redeeming loyalty and rewards when making payments. Generation Z and seniors expressed opposite preferences and had higher interest in loyalty and rewards.

Consumer interest in in-app payments

For future apps, all generations had high interest in those that could provide quick checkout, from 90.7 percent of Generation Z to 100 percent of seniors. This could have something to do with not many consumers having direct experience with an app that mitigates checkout lines, though as a hypothetical idea it sounds good.


New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.