Travel Retail’s Positive Disruptors and Innovators

Making the most of mobile payments

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Mobile payment is the norm in China and other parts of the world are catching up. But there is much more travel retailers, brands and airports can do and offer with digital systems. Jason Holland reports.

The COVID-19 outbreak and its impact on travel has shed a light on a possible over-reliance on Chinese travellers in some quarters. But it has also highlighted the need for retailers, brands and airports to engage with Chinese travellers on their own terms, in order to improve their experience, and ultimately increase business.

One key trend is the proliferation of mobile payments in China. Some in the travel retail industry have reacted swiftly, but more can be done.

Once the COVID-19 pandemic is contained, there is likely to be an upswing in travel as those who had previously saved up or were close to booking would then resume their plans. With Golden Week coming up in October, now is the time to take extra steps and implement new tools to accommodate Chinese travellers and respect their payment methods, according to Rory O’Neill, Chief Product and Marketing Officer at international payments company Planet.

“China currently represents 32% of the global luxury market, and this is expected to increase to 46-48% by 2025. There is a lot of talk about ‘experience’, but the product is the souvenir of the experience; they come together, and particularly for Chinese customers,” he says.

“Part of the shopping experience is the act of purchasing. So there are opportunities around payment acceptance, and using mobile wallets – not just for Chinese travellers but all of Southeast Asia.”

The first step for merchants is to accept these forms of payment. “Even a little sticker in the window [to acknowledge acceptance] helps the process of comfort,” says O’Neill. “You are then one step closer to closing the deal.

Comfort and experience: Amsterdam Schiphol Airport set up WeChat Pay experience zones last year to provide assistance to Chinese travellers

“The challenge for retailers is that there will be more and more ways to pay, and while most will want to offer this they won’t want more and more suppliers, so there is a great opportunity to do everything in one system.”

An example of such a system is the “super-app” WeChat, which offers options for payment and many related services. One of the most important is the ability to give customers a VAT refund in real-time, and O’Neill says this is one of the most under-utilised conversion drivers. “Giving people money back there and then [using a mobile wallet] encourages them to spend more in your store. Highly precise location targeting will also improve footfall.”

Planet and WeChat work in partnership to facilitate the mobile refund. WeChat Pay International Regional Director, Europe & Middle East Jeff Hu says the tax refund is one of the top reasons for Chinese to shop in Europe. “We offer customers the opportunity to pay with their own currency and get a tax refund. With a WeChat notification they can instantaneously see that they have received it.

At the airport, we can then show them targeted offers, meaning people are more likely to go to particular stores.”

All in one system: A growing number of travellers appreciate being able to use their mobile device for everything – including payment and getting tax refunds. There are clear advantages for retailers too.

According to Hu, WeChat is also the most effective channel to reach customers while they are still in China. “Using the platform, you can tell them about limited-edition products or target them with relevant advertising.”

Indeed, O’Neill notes that Chinese customers generally already know what they want to buy when they come to the UK or Europe, so the use of mobile payments is about “making it easy for a customer and serving their needs”.

He explains: “Chinese travellers have detailed product knowledge and have done their research. Using digital systems, you can show them exactly what product they want and the specifications. So digital is the key to success to reach the customer, and mobile payment is the last step of the journey. Mobile tech also allows you to target shoppers who are on location, rather than the mass of the China market.”

This video from Planet assess likely changes to tax free shopping, with the use of mobiles set to have a big impact

Frictionless payment

One airport that is hoping to undergo a “payment revolution” is Munich. It has become the first location in Europe to offer a new mobile, cashless payment system billed as ‘Smart Checkout – Tap, Pay, Enjoy’.

The system offers frictionless payment in a self-checkout version for retailers and was initially implemented at a retail unit of eurotrade, a wholly-owned retail subsidiary of Munich Airport.

The solution, which has been developed in a partnership with Wirecard, SES-imagotag and wirecube, allows consumers to use their smartphones to pay for items at the store shelf by scanning an electronic price tag, obviating the need to pay at the tills. For payment, the customer is redirected to a mobile website; unlike existing payment systems on the European market, it is not a requirement to download an app.

To shop and place articles in the shopping basket, customers present their smartphone to the SES-imagotag digital shelf labels. The product is captured via near-field communication (NFC) or a camera scan of the QR code. Within seconds the phone opens a wirecube mobile web app where the customer can complete the purchase, either by scanning a credit card with the phone camera or entering the card details by hand. Alipay is also available as a payment option.

Travellers at Munich Airport are already able use the new mobile payment solution for selected items in the MyCorner shop, which is located post-security in Terminal 2. Following the pilot phase, the airport said the payment system will be extended to other eurotrade retail locations, including 12 duty free shops and 14 other stores offering magazines and newspapers, travel items and souvenirs.

“The new payment system gives our customers a self-checkout option for the first time. This offers significant added value for travellers in a hurry,” says eurotrade Managing Director Sven Zahn. “The customer avoids waiting time at the cash register and, as Munich Airport’s retail arm, we are expecting a boost in sales – especially for fast turnover goods that are purchased on the go.”

Munich Airport Vice President Center Management Philipp Ahrens adds: “With the new payment system, Munich Airport is playing an active role in the digitisation of retail and showing yet again that, along with its status as a vibrant and cosmopolitan retail location, it is also increasingly innovative.

“By simplifying and speeding up the checkout process, we can deliver an even better shopping experience for our 48 million passengers per year and keep pace with their ever-increasing expectations.”

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The Moodie Davitt eZine

Issue 277 | 24 February 2020

The Moodie Davitt eZine is published 20 times per year by The Moodie Davitt Report (Moodie International Ltd).

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