business news in context, analysis with attitude

MarketWatch has an assessment of the new Walmart Pay mobile payments system announced last week by the retailer, which is designed to compete with the likes of Apple Pay as well as with the CurrentC system in which Walmart is a founding partner.

Some people, the story suggests, are not impressed:

"The rollout comes at a time when retailers are scrambling to capture market share in mobile payments. By processing sales in this way, retailers aim to circumvent credit card fees, build customer loyalty and reap the sales. But getting consumers to buy in is one of the biggest hurdles.

"In reality, most consumers use few apps on a daily basis for any reason. Half of the time that smartphone users spend on apps is on their single-most used app; 18% of time is spent on their second-most used app and 10% on their third-most, showing there is little time spent on additional apps beyond a primary three, according to analytics company comScore. Plus, mobile payments still make up a small percentage of purchases in the U.S.

"Just 18% of smartphone users in the U.S. and Canada use their phones to make a payment at least once a week, according to an Accenture survey from this summer. Only 14% of people with smartphones plan to make even one purchase using mobile payments during the holiday season, according to personal-finance website Bankrate ... In Accenture’s survey, 54% of smartphone users who don’t currently make mobile payments said they would if they were offered discount pricing or coupons, and 53% said they would if they received rewards points with a rewards card stored on the phone. And 53% said they would if it improved their shopping experience."

Fortune reports that Walmart "has starting selling the Apple Watch on its website, becoming the biggest retailer to carry the popular device ... The retailer is selling the watch at only a few select stores at this point, a Walmart spokeswoman told Fortune. The only versions Walmart is selling are the 38 mm and 42 mm Apple Watch Sport models in silver or space gray, ranging in price from $349 to $399."

Walmart also is selling the Apple Watch on its website. "The addition of Walmart, the largest U.S. retailer with $290 billion sales a year (including about $13 billion online) gives Apple much more reach in selling the device," Fortune writes. "And for Walmart, it could drive traffic to its website, on which it is spending billions to make it better compete with and other e-tailers."
KC's View:
I have to say that I disagree with what appear to be the Accenture conclusions, which is that Walmart may be too far ahead of the wave on this. I have no idea if it makes sense to create Walmart Pay and still have a commitment to CurrentC, but history suggests that consumers will adapt this technology faster than anyone expects, and so it makes sense to try to get ahead of the wave. When it hits the tipping point, it'll happen fast ... and those who wait too long to adapt may find themselves at a competitive disadvantage.

As for selling the Apple Watch ... I think this illustrates the degree to which Walmart may be trying to change its spots without changing its stripes. Which could result in one very confused animal if it is not managed effectively.