Interesting interview from eMarketer, showing how customer centricity transforms mobile payments.
Panera Bread, the fast casual bakery-café with more than 1,900 locations in North America, was among the first wave of brick-and-mortar merchants to accept in-store and in-app payments with the Apple Pay mobile wallet in 2014. Blaine Hurst, Panera Bread’s chief transformation and growth officer, spoke with eMarketer’s Bryan Yeager about the adoption of Apple Pay and other mobile payments among the company’s customers.
eMarketer: Slightly more than a year has passed since Apple Pay launched. What does adoption look like among Panera Bread’s customers?
Blaine Hurst: I am very pleased with the in-app usage, which is in the 20% range [of total in-app transactions]. For in-store, we assumed that for people to change their habits you have to have a much better experience. We’ve paid with mag stripe-based cards for a long time and this is a better experience. Is it enough better to get me to stop using mag stripe cards and overcome that built-in reluctance to change?
It is difficult to get the consumer to change behavior without a material improvement in the experience.
eMarketer: Do you see traction with customers using Apple Pay in your app translating to greater in-store mobile payment usage?
Hurst: We do. When we launched with Apple Pay we saw there was a spike in both methods. Anything that creates new habits or requires us to create new habits, that habit then begins to spread in everything we do. I don’t think that happens overnight because consumers are so used to swiping mag cards, but I believe it will occur.
I don’t know how long it will take, but I think proximity payments where I don’t even have to take my phone out or my wallet, smartwatches, the impact of chip-and-pin cards—the combination of those things will begin to drive adoption of mobile-related payments.
Part of it is the merchants have to get on board. But with many merchants re-terminalizing to accept chip-and-pin anyway, it’s relatively easy to do [mobile payments] at the same time. That’s my No. 1 objective: If customers want to pay with their phone or their watch or chip-and-pin, I want them to be able to pay.
I’m open to any and all comers because this is about Panera Bread adapting to the consumer rather than the company trying to force the consumer in terms of how they pay.
eMarketer: What is Panera’s approach to training front-line staff like cashiers to help mitigate issues with customers using proximity mobile payments?
Hurst: We build it in as part of our overall training program and then whenever there is a new release like Google just did [with Android Pay], we then go back through and update the training. When we rolled out Apple Pay last year, we pushed pretty hard to make sure the cafés were ready for it because we assumed that we would go from few transactions to quite a few transactions. Not huge percentages, but when you start from zero, you’re going to see a pretty big [increase]. We do 8 million transactions a week, so even a small percentage [using mobile payments] is a lot.
eMarketer: How does loyalty and rewards factor into Panera Bread’s approach to mobile payments?
Hurst: Let’s just say we have been working with Apple on some of the loyalty integration since it began. And we are working with both our point-of-sale vendor and Verifone on that integration. We’re not announcing when and where it might be available, but I do believe the ability to include loyalty information as part of the transaction is very important to our guests, and I think it is one more step.
Today, Panera has almost 50% of our transactions where the consumer gives us their rewards number. Clearly, we do that in-app and we see about 70% of those transactions with the loyalty identifier. So we will continue to do that. We have a well-accepted, perhaps industry-leading program, with 20 million consumers signed up.
