Walgreens, Target staking a claim in tomorrow's shopper by enabling Apple Pay

Walgreens recently became one of the first retailers to enable Apple's new Apple Pay system, keeping the retail pharmacy giant on the cutting edge of mobile and omnichannel shopping. 

 

Walgreens isn't alone, of course, Target also will enable Apple's new payment system. “We know mobile is becoming the front door to Target, and we’re focused on creating the best possible mobile experiences for our guests,” said Jason Goldberger, SVP of Target.com and mobile, in the company’s “A Bullseye View” newsletter. “We’re thrilled to support Apple Pay to streamline how our guests pay in the Target app — this absolutely makes purchasing from Target’s mobile app easier than ever.”

 

It's a smart play, especially with all of the recent hacking incidents at retail — Apple Pay serves as an encrypted payment service that doesn't reveal such identifiers as name and credit card number as part of the transaction. Apple Pay, and other similar services no doubt, will evolve into the latest facet of omnichannel shopping. Not only will tomorrow's mobile shopper get what she wants, where she wants it and when she wants it, but also how she wants to pay for it. 

 

But it's a smart play for other reasons, too. Apple Pay stands a strong chance of defining the mobile payment space. There aren't too many companies that garner the kind of media attention that Apple does for a new product announcement (USA Today promised its app users live updates from California). But it's with good reason, people interested in news about Apple products tend to be higher-income consumers who actively embrace the new features with each upgraded iPhone. 

 

According to a comScore white paper made available in August, the median iPhone app user earns $85,000 per year, which is 40% more than the median Android phone user with an annual income of $61,000. And while Android ranks as the top smartphone operating system with 83.8 million U.S. smartphone subscribers, there are still some 67.4 million who are using Apple’s iOS platform, representing 42.4% of the total market as of July, 2014. 

 

Apple iPhone owners not only represent a higher income demographic, but they're more likely to be millennials, too. iOS users skew younger than their Android counterparts across the smartphone segment, according to comScore. As many as 43% of iPhone users are between the ages of 18 years to 34 years as compared to 39% of Android phone users. 

 

The iPhone 6 and iPhone 6 Plus are expected to sell between 50 million and 60 million units by year end. That's some 50 million higher-income, younger consumers who will be looking for a place to try out the pay function on their latest toy. You can bet that this payment system will become a factor in deciding where they shop — now and in the future. 

 

The fervor generated by Apple's announcement regarding its advancements in mobile technology is a prognosticator of another shopping fact — mobile has become a key enabler in how, where and why people shop for goods. According to Custora's E-Commerce Pulse Report released in July, mobile e-commerce is now a $42.8 billion market, up from $2.2 billion in 2010. As much as 13.8% of that business is being conducted on a smartphone (vs. a desktop or tablet). As of March 2014, Apple's iPhone share of e-commerce conducted from a smartphone was 53.6%. That represents online shopping as opposed to in-store, but is an indicator as to how quickly the smartphone may replace traditional payment transactions that use a physical credit card. 

 

And in 2015 when the Apple Watch is launched, there will be another round of users looking to explore Apple Pay. And these users will not only be mobile savvy, but also health-and-wellness conscious. Apple Watch includes an Activity app designed to help motivate users to be more active throughout the day, and an all-new Workout app designed to provide the metrics needed during dedicated workout sessions. Apple Watch uses the accelerometer, a built-in heart rate sensor, GPS and Wi-Fi from an iPhone to provide a comprehensive picture of a person's daily activity. 

 

According to analysts, sales projections for the Apple Watch range between 20 million and 30 million. 

 

Apple isn't the only company with groundbreaking technology advancements in the health-and-wellness space. Drug Store News outlines what's next with wearable health and other diabetes-applicable technologies in the next issue. Check it out Sept. 22.