There’s a clear case for high frequency/low ticket value retailers to offer customers a pre-pay mobile wallet. Starbucks has blazed the trail but a few eyebrows were raised when Greggs (not normally an early adopter) announced that it would be next.
Greggs is a UK based traditional retail bakery chain. It is so ubiquitous on every high street that it’s become the subject of a Barraclough family game. The first person who sees a Greggs, says “Greggs.” Everyone else then shouts “GREGGS.” That’s it. We make our own fun.
There’s no longer any money in bread so Greggs is repositioning itself within the the “food on the go” market. Stores are being relocated/refitted with the product mix moving to sandwiches, pizza and warm beverages. Opening hours have been extended to catch breakfast traffic and seating areas introduced. You can read the detail in Greggs’ results deck.
A key thrust of the new strategy is to introduce a loyalty scheme. Greggs has chosen to bypass plastic and paper and move straight to a modern mobile-based system which combines payment and loyalty in a single app. I sneaked a VIP invitation to the programme and was one of the first to try it out.
The app is available on iPhone and Android. The home screen looks nice and friendly although is a bit difficult to navigate around. To register you hit the Account button, to pay, you hit the Rewards button. Not obvious.
Registering is quite straightforward and Greggs very cleverly hits you with a great offer before you begin. Load £20 in your wallet and you get a free breakfast.
Fired up with enthusiasm about the free breakfast, you then need to create an account complete with email and password. Heaven knows why Greggs needs to know my date of birth. It also asks for your address which is necessary if you want to put a payment card in the wallet but superfluous if you choose the Paypal option.
At this point, you have two options for loading your wallet. Either the traditional card route – enter your 16 digit PAN, CVV etc – or set up an auto-load with Paypal. Greggs is offering a £5 bonus if you use Paypal. For the shopper, that’s what Kevin Bacon would describe as a no-brainer. Whether it makes so much sense for Paypal (who are presumably funding this) is a different matter. Assuming they make 1% margin on transactions, Paypal would need to clear £500 in purchases to break even on the offer. That’s a lot for a typical Greggs customer.
With £25 in my wallet, I was now ready to find the nearest Greggs. That’s not normally a challenge as there are more Greggs in the UK than you can shake a stick at. But the app does have a helpful store locator.
The Great Portland Street store is a re-fitted Greggs, complete with strip wood floor and seating area. I picked my lunch, approached the counter and asked if I could pay with the app. The staff had never come across the app before but I explained that the app produced a barcode and then it was pretty straight forward. They rang up the transaction. I hit the Rewards button on the app.
The app then produces a one-time use barcode. I can’t be certain, but I suspect the barcode is actually a gift card and the transaction runs on the same rails as Greggs’ existing gift card scheme. Very sensible, if true.
The barcode scanned first time and the transaction was completed. I wasn’t offered a receipt but I’m sure the till could have produced one of I’d asked. I asked the staff what they thought. They were pretty excited and thought this way of paying felt like the future.
The app recorded the purchase immediately, updated my balance and reminded me about the free breakfast.
Within the Account tab, my puchase history had been updated including basket details. This is one of the key advantages of retailers investing in their own loyalty apps rather than using a third party solution which doesn’t offer integration with the EPOS transaction log.
Greggs has given some thought to the point of sale experience and the technology is well laid out, neat, tidy and clearly signed for the customers. There’s a contactless option too.
I then sat down to eat my lunch.
Credit to Greggs for being so early to introduce a mobile loyalty/payment app. The initiative is strategic for Greggs and supports its need to learn more about its customers. The retailer is clearly willing to invest in the technology and in the offers necessary to make this a success.
Setting up the app requires shoppers to do some work but £5 + a free breakfast is fair recompense. Paypal integration works well and the point of sale experience is well thought through. The only area to work on is the wording on the app home screen which often isn’t intuitive.
It will be interesting to see what the take-up is like. Starbucks customers love its payment app despite the relatively unexciting offers. Greggs brand is not as strong so it will need to work harder to maintain the reasons to use the app. Contactless remains the quickest, least hassle payment option for the shopper and customers will revert to cash/cards if the momentum of offers and communications is not maintained.
The nice folks at Greggs got in touch to say that there is a very good reason why they collect the date of birth. I’m not going to tell you why as that would spoil the surprise.