The Mobile Wallet
Mike Clements, owner of BakeSmart, a leading innovator in bakery software, suggests that the next time you’re in a public place – if you’re not too busy on your own phone – take a moment and look around. “It’s undeniable that people today live on their smartphones,” he says. “Our mobile devices are always within reach. They are now the primary way we consume media, create digital content, and communicate. It’s not a far off idea for our phones to replace credit cards and become the primary means of commerce. In fact, it’s already beginning to happen.”
And the convenience of mobile payments is as evident as the trend, Clements points out. Twenty percent of transactions at Starbucks are paid using their mobile app, a figure that is expected to surpass 50 percent in the next few years.
“I would stop short of saying that retail bakeries need to adopt this technology today to keep up with their nationwide chain neighbors,” he says, “but if you asked me again in 18 to 24 months, my answer would likely be different.”
It may come as a surprise to some retail bakery owners that mobile payment already is catching on like gangbusters in the café category. Nielsen’s second quarter 2016 Mobile Wallet Report looked at how often mobile wallets are used by merchant category, and the results revealed 8 percent of customers use them every day at cafes and bakeries. Further, 22 percent of consumers use mobile payments at a café/bakery once a week.
National bakery brands ranging from Dunkin’ Donuts to Panera Bread, now accept Apple Pay, according to Apple. The biggest names in mobile wallet are PayPal Mobile, Google Wallet, Apple Pay, Android Pay and Samsung Pay, according to Statista.
Clements of BakeSmart explains that the two main options available to retail bakeries that want to accept mobile wallet payments are to either add credit card processing hardware that integrates with Apple Pay and Android Pay or to create the functionality in an app that customers would download to their phones.
Neither are cheap options, he says, and each has its advantages and drawbacks. “In the coming year, I do expect to see significant advancements in mobile wallet apps that do not break the bank, and I think QSR (quick-service retail) solutions through which customers place their own order on a touch screen will develop out of its infancy this year and begin to take hold,” he predicts.
Whether a bakery is ready to adopt mobile payment technologies or not, Clements says, two areas of focus that will drive customer loyalty and satisfaction are excellent customer service through staff training and high quality products. “Those two factors are most important in gaining my loyalty as a customer, but I’m sort of old school when it comes to that.”
Beyond mobile pay, today’s consumers are increasingly going online to do their shopping, buying and arranging for delivery, even in fresh food. So how does the future of online ordering for bakery look?
“Our industry is not on the bleeding edge of adopting online ordering options for their customers,” says Clements. “Some bakeries offer it, but most don’t. Of those that don’t, many want to and other won’t – for now. However, labor costs and customer demand are two factors that are likely to drive adoption of online ordering for retail bakeries.”
Why? Unemployment has been on steady decline for the past six years, he says, and this has created a competitive labor market in which posting for a job that offers minimum wage may not get applicants in the door. “Couple that with states and municipalities moving to set their own minimum wage increases over the next few years,” Clements say, “and in the near future, sitting with a customer while they spend ten minutes deciding between two shades of blue on a quarter sheet cake will not be economically viable.”
Clements says that BakeSmart noticed an uptick in the past few years in levels of interest in the technology or outright adoption of online ordering, “to the point that we felt it made sense to invest in rebuilding and modernizing our e-commerce offering. We expect it to be ready in the first quarter of 2017.”
Also on BakeSmart’s 2017 horizon, “we’re working to release our version 2 in February with a new interface and tons of optimizations, put the finishing touches on our new e-commerce solution, and identify and complete integrations with software companies whose services would most benefit our customers.”
Point-of-sale systems (POS) have a relatively high bar to clear to meet the transactional needs of a retail bakery, compared with other foodservice businesses, Clements points out. A POS system needs to ring up walk-in customers, take future orders (including custom cake orders), print receipts at grill, drink and drive-thru stations, and manage wholesale account orders (if applicable).
To be an effective and efficient system for a bakery, he adds, POS software needs to accept gift cards accommodate a loyalty program, allow for line busting, pull online orders from the bakery website, integrate with production and inventory systems, interact with an accounting program, and do all of this for multiple locations. “Take away any one of these functions and a bakery must manually patch together separate systems. Since BakeSmart’s inception we’ve had a singular focus on serving the needs of the retail bakery industry, which is why BakeSmart does all of these functions already.”