Digital wallets are all the rage in the tech world, but according to a new Gallup study of over 17,000 adults, regular consumers are just lukewarm about them.
Three in 10 customers who are engaged, which Gallup defined as emotionally attached to their digital wallets and willing to go out of their way to use them, said they used a digital wallet every time or almost every time they could in the past 30 days. Only 12% of indifferent customers, which Gallup described as having take-it-or-leave-it attitudes about digital wallets, said they used their digital wallets every time they could; actively disengaged customers reported doing so only 2% of the time.
"Digital wallet providers may be making significant investments in their technology and advertising efforts, but they shouldn't overlook a crucial factor in attracting and retaining customers: Engagement," the study said. "Providers who fully engage their customers can realize a substantial return on their investment."
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Fully engaged users were more likely to use their digital wallets at the grocery store (48% said they did so in the past 30 days), followed by department stores (27%), specialty stores (25%) and convenience stores (21%). Warehouse stores saw the least amount of digital wallet use for all three types of users, Gallup found.
Digital wallet providers that engage customers through other products and services have a built-in audience for their payment systems, the study found.
"The more engaged customers are with their primary bank, the more likely they are to feel comfortable using a digital wallet the bank offers," it noted.
The study also reported that 16% of fully engaged banking customers said they are very comfortable using the digital wallet their primary bank offers, while only 11% of actively disengaged customers felt the same way.
There are three ways to engage digital wallet users, the study said:
1. Make users feel special. "The need to feel special is universal, and digital wallet users are no exception. Companies that provide offers and discounts through digital wallets – whether related to clothing, books or food – must make these benefits unique and relevant to each user's preferences, purchasing power and past transaction history."
2. Make it easy to do business. Users don't yet believe digital wallets actually provide convenience, Gallup reported. "Consumers want digital wallets to be easy to install, upgrade, learn and use. They also want easy access to their payment history and past transactions. Perhaps most of all, they want to forgo their multiple credit cards and checkbook to complete their transactions through one – and only one – digital wallet," it said.
3. Be helpful. "Providers will win more users if a product can serve as both a convenient method of payment and a financial assistant," the study said. "For example, users may want their digital wallet to help them find a nearby restaurant that offers the best sushi. They might expect their digital wallet to record all of their transactions for a month and then help them better understand and manage their spending. Or they may expect their digital wallet to alert them to potential fraud."
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