In this age of big data, social media and integrated marketing ecosystems, it’s sometimes hard to know who owns the customer. Traditionally, the merchant, retailer or brand tends to “own” the customer in terms of building loyalty, repeat business and add-on sales. But with the emergence of cashless mobile payment systems and associated payment gateways, new opportunities to deliver marketing campaigns that drive sales are giving merchants more options beyond their traditional databases.
These systems are evolving to be much more than just transaction processing platforms. They collect vast amounts of data that can be used effectively for marketing purposes. For example, they could deliver personalized and highly targeted messages based on a consumer’s known buying behaviors and patterns. Data collected from mining transaction details can be used to garner effective insights into buyer personas, which can then be put to use for new types of media buying and other digital marketing programs that drive foot traffic, sales leads and social media engagement. These mobile payments platforms do so in a manner that is seamlessly integrated in consumers’ everyday patterns of communicating, planning and making purchase decisions.
Tapping Into The China Gold Mine Of Consumerism
For retailers targeting Chinese consumers specifically — which is a dynamic and fast-growing sector in markets like luxury goods, fashion and travel and hospitality — marketing programs driven by payment companies can provide an edge to precisely target this affluent buying segment. More importantly, it can be done in a context with which these consumers are familiar and comfortable, making it even more effective.
The Chinese consumer opportunity is impressive: last year, Chinese travelers took a record 130 million overseas trips and spent a whopping $115 billion on-the-go. In total, globetrotting Chinese consumers — buoyed by a growing middle class with larger disposable incomes, as well as relaxed international travel restrictions — represented 21% of the entire world’s tourism spending.
Alipay, WeChat Pay (WeChat is the Chinese equivalent to WhatsApp, but offers an integrated cashless payment system as well) and the mobile app by China UnionPay are by far the most popular payment systems Chinese consumers prefer. Thanks in part to “last mile” integrators that acquire and directly serve merchants by facilitating a seamless integration and settlement process based on these platforms, the expansion of these three major platforms is increasing rapidly at retailers, hotels, restaurants and other spending destinations sought by Chinese travelers.
Although they are becoming much more accessible in North American and Europe, most Western merchants see them mainly as transaction platforms.
These systems, virtually indispensable to Chinese shoppers who have already been accustomed to linking their credit or debit cards to smart phone apps for fast and convenient payments, are much more than merely taking a payment at the time of a purchase. The integration with Chinese mobile payment options opens the path to integrated marketing campaigns, allowing merchants to gain unique insights into the kinds of things shoppers are buying, allowing them to stay on top of trends or interests with this vital consumer segment.
These payment apps and web sites also enjoy high traffic, where consumers learn where to buy, where to eat and where to stay in tourism destinations, well in advance of ever stepping foot in a physical store. By enrolling in Alipay, WeChat Pay and the UnionPay mobile app, merchants get automatic inclusion in certified merchant lists these apps curate, which is a proven traffic driver both online and offline. Such visibility is effective, but it is only the tip of the marketing iceberg.
Creating Customized Experiences
While the big payment platforms have extensive reach to implement even more merchant-specific programs, transaction enablers can be highly effective. Because these payment service providers are the literal connection between the merchant and the payment method, they have the data behind consumers shopping habits at specific points of sale and can utilize that information to create a customized shopping experience.
For example, these platforms can notify consumers when they are near a store where they’ve recently shopped, or recognize that the consumer bought a fur coat and may be interested in a matching scarf. Working in conjunction with travel planning apps and services — such as Ctrip, the popular Chinese tourism app — they can suggest retail, dining or attractions options near the destination where the clients are traveling, before they even leave China.
Using anonymous data collected by the transaction enabler, a variety of cross-channel digital marketing programs can be executed to motivate buying in specific product categories, geographic locations or for other targeted demographics. Digital coupons, for example, are a popular mechanism that retailers have employed via these apps, and an incentive Chinese consumers respond to well. They also respond to gift cards, an easy and efficient way for merchants to engage customers, especially around holidays and special occasions. Similarly, merchant ads in WeChat Moments feeds are well-received and have high response rates that drive Chinese consumers to merchants. Successful tactics include promoting an event or a big sale in a timely and geocentric manner that can be enabled by these digital, data-rich platforms.
Marketing programs can be executed through a number of channels, including email, SMS and instant messenger, as well as through display advertising within apps and web sites. By tapping into the expertise of native transaction enablers, brands can develop effective creative, targeted and placement strategies that resonate with Chinese consumers. Detailed marketing analytics help evaluate success of campaigns and guide adjustments and follow-on campaigns.
Proven Sales Growth
The availability of Chinese mobile payments options, together with targeted marketing programs, have proven to lead directly to increased sales. A recent Nielsen study reports that by enabling Alipay and WeChat Pay transactions at the point of purchase, merchants can see an increase of up to 60% in foot traffic and sales from Chinese consumers. RiverPay’s transaction data confirms that trend, with merchants enabled by that system reporting double-digit revenue growth after adopting Alipay and/or WeChat Pay as payment options. In a recent RiverPay implementation at a Canadian luxury department store, the retailer brought in $8 million of extra revenue in 14 days after integrating Alipay and WeChat Pay to its stores.
With the burgeoning growth of the Chinese consumer segment in Western markets, enabling payment options via Alipay, WeChat Pay and UnionPay that target this sector is a no brainer. Taking the next step to leveraging the marketing potential of these ubiquitous apps that almost every Chinese consumer relies on can have an even greater impact on sales and customer engagement. Smart retailers are looking to the expertise of suppliers who can not only process Chinese consumer payments, but can influence where they buy as well.
Ryan Zheng is the Co-Founder and CEO of RiverPay. He launched RiverPay with partners in late 2016 and has grown the company into one of the major authorized payments service and technology providers of leading Chinese mobile payments platforms including Alipay, WeChat Pay and the UnionPay mobile app, with presence in 18 countries spanning North America, Europe and Asia and a client portfolio of 12,000 merchants from multiple vertical sectors. Prior to starting RiverPay, Zheng worked closely with top-tier retailers, such as Costco and Loblaws Group, through various channels to capture outbound Chinese consumer market, as well as Canadian and the U.S. local Chinese communities.