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Coming off a tough holiday season, Target’s management continues to search for answers that will lead to a turnaround of the mass merchant’s business. Will a newly reported plan to introduce a smartphone payment option be part of the answer for the chain?
Michael McNamara, Target’s chief information and digital officer, told Recode the chain would introduce a mobile payment option in its stores later this year.
While short on specifics, it appears the retailer will introduce payments through an app of its own rather than opening up payments via third-party options. It is not clear if it the payment option will be embedded in the core Target mobile app, its Cartwheel discount and coupon app or both.
Mr. McNamara said Target planned to initially open the mobile payment option to the company’s REDcard credit and debit card holders. Members enjoy five percent off on purchases made in Target’s stores and online. They also receive free shipping on orders placed on target.com. Target accepts Apple Pay online, but not in its stores.
Target is following Walmart in developing its own mobile payment app. After introducing Walmart Pay last year, the chain claimed that internal surveys found 80 percent of users would recommend the app to others. It also found that 88 percent of purchases using the app came from repeat users.
One potential sticking point for Target is highlighted in an article on Mashable, which questions whether consumers need another mobile payment app option. Mobile payment apps are intended to make the purchasing process simpler, but consumers searching smartphones for the right app based on where they are shopping seems more complicated.
Target, led by chairman and chief executive officer Brian Cornell, continues to open smaller urban stores, emphasize “signature” categories and focus on supply chain and digital initiatives to drive a turnaround, but hoped-for results have yet to be realized. The chain’s comparable store sales fell 1.3 percent for the last two months of 2016.
- Target plans to introduce its own smartphone payment service in stores later this year – Recode
- Target launches mobile payment system — because you definitely needed another app – Mashable
- Target Reports November/December Sales and Updates Fourth Quarter 2016 Guidance – Target Corporation
- Walmart in no hurry to add other mobile payment options – RetailWire
- Will the Chase Pay option help Walmart increase mobile payments? – RetailWire