Home Mobile Pep Boys Talk Passbook Strategy Ahead of Rumored Apple Pay Launch Date

Pep Boys Talk Passbook Strategy Ahead of Rumored Apple Pay Launch Date

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PepBoysWhen Apple CEO Tim Cook took the stage in Cupertino last month and unveiled Apple Pay, it was game on for many in the mobile payments industry.

While Apple’s embrace of mobile payments doesn’t mean retailers immediately need to outfit every point-of-sale system with an NFC reader, megacompanies like Disney, Macy’s, Panera, Sephora, Starbucks, Walgreens and Whole Foods are on board to accept Apple-powered contactless payments.

Auto parts and car maintenance chain Pep Boys has been doing just that since it launched its mobile wallet program back in April. Pep Boys works with mobile tech company Vibes to mobilize online coupons and offers through Apple’s Passbook and Google Wallet – although it’s seen a higher rate of mobile coupon downloads with Passbook, the preinstalled iOS app that allows users to easily store items like store coupons, tickets and boarding passes.

Not be be confused with Passbook, which acts like a dynamic loyalty card that lives on a user’s phone, Apple Pay allows iPhone 6 and Apple Watch to make one-touch payments by taking advantage of the NFC chips housed in those devices.

Once Apple Pay becomes officially available – leaked Walgreens documents made public by MacRumors point to a Saturday launch date – it appears that users will be able to enable Apple Pay through Passbook and add their credit and/or debit card information into the app by linking it directly to their iTunes or simply taking a picture of the card or cards. The combination of Apple Pay and Passbook would ostensibly do away with the need to carry loyalty cards or credit cards by digitizing both in one place, making the move toward mobile payments that much smoother for consumers.

But, for the moment, Passbook and, to a somewhat lesser extent, Google Wallet have been pretty handy for Pep Boys. When a user saves a Pep Boys coupon to Passbook or Wallet, the brand then has the ability to target that person based on GPS location and send push reminders when a particular offer is about to expire, as well as automatically update the offers with fresh content and messaging upon expiration. As long as that user doesn’t delete the original offer, a brand can keep updating it with new and more relevant offers without any action on the customer’s part.

Mobile wallet is also a potent tool in the retailer’s never-ending quest to accurately attribute offline sales to online campaigns.

“Mobile wallet gives us more real-time insights into who is leveraging our coupons in-store,” said Rachel Silva, director of marketing at Pep Boys. “The coupon is always with them. We go where they go.”

In addition to the mobile wallet integration, Pep Boys, which has a data partnership with Acxiom, works with Vibes to manage its opt-in SMS program. The brand also uses social, email and direct mail to encourage mobile opt-ins. Rewards program information, shopping habits, purchase history and other customer profile data is tied into the brand’s mobile messaging initiatives.

Although the jury is still out on whether Apple Pay will finally crack the mobile payments code, there’s no denying that Pep Boys has seen stellar results with its Passbook program, and once Apple Pay enhances the Passbook experience, it stands to reason that the numbers will go up.

According to the brand, 26% of customers who view a Pep Boys offer on its mobile site add that offer to Passbook, while 30% of all Pep Boys mobile wallet offers are subsequently redeemed in store – 6% higher than the average 24% redemption rate across Vibes clients.

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And once a Pep Boys offer is saved in Passbook, it’s likely to stay there. Fewer than 1% of customers who add a Pep Boys pass to Passbook later remove it, as compared to the average 3% deletion rate.

Pep Boys plans to keep going on its “mobile-first” path in 2015, said Silva, whose team is hoping to start leveraging more in-store messaging, including SMS and creative collateral, to encourage mobile opt-ins and to create more targeted mobile offers by linking redemption data with CRM data and shopper information gleaned from in-store interactions.

“Mobile is our way into our customer’s pocket,” Silva said. “We’re definitely going to continue to grow the program, but it’s also not something that’s going to happen overnight.”

It’s a philosophy Vibes CEO Jack Philbin enthusiastically endorses – mobile wallet as training wheels toward NFC-enabled payments.

“I call this the bridging concept – it’s the bridge between now and the day when a retailer is ready to let consumers come in and tap or swipe to pay, which could be a year or two away,” Philbin said. “But nothing is stopping them from jumping in with wallet and getting their customers used to storing information on their phones. And I see the Apple Pay announcement as the moment in the market that we can all point to and say, ‘This is real. This is happening.’”

But that doesn’t mean Google is out for the count – far from it, Philbin said.

“This isn’t a discussion of who’s going to win in mobile payments, Apple or Google; that’s like asking, ‘Who’s going to win, Burger King or McDonald’s?’ – what we’re talking about here is an operating system race,” Philbin said. “It’s a little bit of a stretch to say that anyone is going to switch from Android to iPhone because of Apple Pay. But if you already have all your songs on there and your apps on there, having your credit cards on there is just one more items that makes the phone sticky. This is a loyalty play for Apple and for Android.”

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