Mobile wallets overtake traditional wallets as UK consumers embrace digital convenience

Traditional wallets and handbags are being supplanted by the practicality of mobile wallets in a digital environment that is rapidly changing. According to an innovative study from omnichannel customer interaction platform SAP Emarsys, a startling 50 per cent of UK consumers now think they don't need a physical wallet and would rather use a smartphone-based digital wallet.

This change in customer behaviour and the launch of SAP Emarsys' mobile wallet, which promises a seamless and customised buying experience, are related.

The research, based on a survey of 2,003 UK consumers, highlights a striking generational divide in the adoption of mobile wallets. Younger generations between the ages of 18 and 24 are leading the push, with an amazing 67 per cent feeling comfortable making purchases using mobile wallets.

Only 37 per cent of people over the age of 45, in comparison, express the same level of confidence. The study also reveals that a significant 93 per cent of consumers utilise loyalty programs based on mobile wallets, indicating that this generational gap may stem from the enticing rewards offered through digital loyalty schemes.

So, what drives this seismic shift towards digital wallets? The survey identifies three key benefits that are driving consumer preference for digital discounts and coupons. A quarter of respondents mentioned the organisation of discount codes, while 31 per cent cited the speed of transactions compared to traditional paper alternatives.

Furthermore, 32 per cent appreciated the simplicity of calculating savings offered by digital wallets. As this technology gains traction, these advantages are expected to become standard features.

The research indicates that consumers are increasingly comfortable utilising digital coupons, vouchers, and loyalty cards. A substantial 65 per cent of respondents express their confidence in using digital coupons, while 64 per cent feel the same about digital loyalty cards. Interestingly, a mere 9 per cent admit to feeling uneasy about digital coupons and vouchers, and only 10 per cent have reservations regarding digital loyalty cards.

For those who have yet to adopt mobile loyalty cards, the main deterrent seems to be a lack of brand devotion. Earlier research from Emarsys reveals that the cost of living crisis has led 56 per cent of consumers to abandon previously loyal brands in search of cost-saving alternatives. In fact, 19 per cent of consumers feel they can no longer afford brand loyalty. To counter this trend, brands must discover the "value exchange" that compels consumers to recommit to a particular brand.

Kelsey Jones, Global Head of Product Marketing at SAP Emarsys stated that today's savvy customers demand exceptional experiences and substantial rewards. To secure their loyalty, brands must truly understand each individual's values and meet their needs through their preferred channels. Jones believes that the new mobile wallet functionality provided by SAP Emarsys empowers marketers to elevate their brand promises by delivering the personalised and seamless experiences customers expect.

Jones illustrates this concept with an enticing scenario. Consumers should picture using Apple Pay to make a purchase at their favourite store while having all their coupons and loyalty cards conveniently stored in one location on their smartphone. This level of convenience and optimisation is made possible by SAP Emarsys' mobile wallet, enabling marketers to enhance the overall customer buying experience.

One brand that has embraced the potential of mobile wallets is City Beach, a renowned surf and streetwear retailer and an SAP Emarsys customer. James Neill, Customer Lifecycle Manager at City Beach, emphasises that mobile is the channel that customers consistently use, making it an essential part of their omnichannel strategy.

The integration of mobile wallets allows City Beach to engage with customers of all ages, bridging the gap between online and offline experiences. He noted that by tailoring products and shopping encounters to different age groups, the addition of a digital wallet has boosted consumer loyalty. Neill confidently states that customers can now support their favourite brands wherever they go.