Apple’s impact on the retail industry

If you love Apple as much as I do, then you are definitely tired today.  Why?  Because you were one of the people who got up early this morning (2am CST) and wait for Apple and cell providers to accommodate the heavy flow of consumers wanting to pre-order their new iPhone!  So now that the pre-order has happened and we, as consumers, have had a couple days to let the exciting news from Apple settle in, let’s analyze what this really means for the retail industry.  Here is what we know: With its new mobile wallet system, Apple Pay will revolutionize the way that consumers pay for things online and in stores.  Not only will it provide a simple user experience but a more safe and secure transaction.  Apple has put their consumers first, giving them the ability to purchase things with their phone and giving them a very simple and easy user experience.

So this is all great and dandy for the consumer but what about the actual merchants/retailers?  It would be an understatement to say that Apple’s announcement will have an impact on retailers.

• Security

This is two-fold: it creates a security for the consumer.  Because Apple Pay bypasses involvement between the customer and merchant, it enables Apple to opt out of data collection to help secure a safe transaction.  With a safer and more secure transaction, consumers will be less hesitant to utilize their credit/debit cards for purchase transactions which in turn can only help retailers/merchants with revenue.  But merchants can also feel more secure against hacker attempts to steal consumer information as we have seen so much in the news as of late.  This can save retailers millions if not billions of money in having to increase security systems and/or pay out consumers who were affected by security breaches.

• Lower Fees

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Due to the partnership that Apple has made with major financial institutions and credit card companies, a decrease in rates for Apple Pay transactions will be seen for retailers that have jumped on the Apple Pay bandwagon.  These costs will be less expensive than current ones that are associated with other forms of mobile payments and therefore benefit the retailer/merchant.

• Technology

Apple Pay also revives a technology (NFC) that most people thought was long gone due to the lack of launch in the 5 and 5s.  NFC (near-field communication) enables the tap and go payment feature.  Consumers will be able to pay for a burger at McDonald’s using their NFC-enabled device at a contactless point-of-sale terminal, pay for an Uber ride within the car service’s app. Both methods use Touch ID to confirm the payment.  Due to the fact that the US Market will start moving away from utilizing magnetic strips on the back of your card (EU uses pin and chip technology), retailers will be upgrading their POS systems and many will get NFC built into the systems.  Apple, being ahead of the game, is using this to bring its Apple Pay system to the largest possible US retail market.

• Potential Revenue

If Apple, which reportedly has more than 800 million credit cards on file and expects to sell between 70 and 80 million new iPhones by the end of this year, thinks there’s a better way to convert customers on mobile devices, you need to be thinking about it, too.[1]

The potential of revenue gain can be exponential.  This would be an opportunity too big to miss!  And if anyone can get consumers to change their purchase habits, it is Apple so retailers need to take action to stay competitive.
We still have time before Apple Pay actually launches and will have to wait to see the real impact it will have, only time will tell.  But I do believe this is about to change the consumer shopping journey and purchase process.
 
[1] Source: http://www.business2community.com/mobile-apps/apple-pays-ecommerce-impact-typing-credit-card-number-yesterday-01005163#1UfXwtIElHxgFcq2.99