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The Next Step in the Mobile Relationship Between Franchises and Consumers

Mobile phones have become an essential part of many Americans’ lives since the first cellular telephone hit the market in 1984. At the beginning of 2012, approximately 328 million people in the United States owned a mobile phone – more than half of which were smartphones.

Today, mobile phones are used for a variety of reasons that go far beyond their original purpose of making a simple telephone call. These actions include media and information consumption, photo taking and sharing, texting, gaming, and more.

As discussed in our recent retail franchise industry report, the smartphone is quickly becoming a tool of the shopping experience, not just a supplement. According to an Empathica consumer insights study, more than 50% of smartphone owners currently use their mobile devices to check prices as they shop, and nearly 10% use their smartphones to write reviews.

However, mobile usage by people during the consumer process goes beyond comparing prices or writing product reviews. Many franchisors are using new media technologies to reach consumers on-the-go as well as provide deeper brand experiences, particularly through social media.

Mobile commerce is the technological extension, or evolution from, online shopping (e-commerce) and related activities. By 2016, direct mobile commerce sales are estimated to grow to $31 billion – and the mentioned figures don’t even include the amount of money mobile phones will influence indirectly.

The payoff for engaging consumers through mobile can be great. For instance, in spring 2012 Domino’s hit a never-seen-before $1 billion dollars in digital sales from April 2011 to April 2012 – yes, billion with a “b.” A main component of this revenue generation has been the company’s mobile app for ordering, which debuted in 2008.

Another franchise that has embraced mobile technology is Burger King. Burger King is diving further into the mobile game with the introduction of a mobile payments program. The program gives consumers the option of paying with their Android or iOS-based device (iPhone) by scanning a QR code located on register counters or drive-thru windows at participating Burger King locations. To use the payment option, consumers would first have to download Burger King’s “BK Mobile Crown Card” app.

Mobile payment is the next step in the digital evolution of commerce. People like when things are simple for them. The main goal of mobile payment and other mobile efforts is to make the transaction process easier for consumers. But, the new technology that accompanies mobile payment may also lead to enhanced interaction and relationship building between franchises and their customers.

Imagine a cashier or salesperson being able to know a customer’s name and their preferences instantaneously by-way of a building’s WiFi tracking system when he or she walks through the door? One the main players in the mobile payment business, Pay with Square, makes this scenario not so far-fetched.

Pay with Square is a smartphone app that allows subscribers to find businesses around them that accept payment through the system through a directory listing and earn rewards through participating companies. Through WiFi systems, the customer’s name and photo appear on the register at checkout. The customer would say his or her name and the cashier would then confirm by sight that it is that customer to complete the sale. The technology allows for franchises and other businesses to offer participating customers rewards and specials and keep track of individual customer preferences.

This ability to personalize consumer experiences will be of great importance to franchisors in maintaining success as future generations’ age. “Flexibility and customization is very important to Millennials (those born between the early 1980s and late 1990s),” says restaurant analyst Darren Tristano, executive vice president at the Chicago-based consulting firm Technomic. And there aren’t many things more personal to someone than their mobile phone.

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