During many purchasing decisions, mobile phones have traditionally been used as the research function. However according to a recent report from comScore, online retail spending grew by 14 percent last year, meaning that now that 1/3 of all online purchases are made with mobile devices. With the introduction of Apple Pay, these numbers are only going to increase, so marketers need to act fast and grow right alongside the new Apple Pay initiative.

What Is Apple Pay and How Does It Work?

Apple Pay is a new mobile payment system that replaces the need for a physical debit or credit card when making an in-store transaction. All you have to do is simply hover your phone over a machine, called a near field communication (NFC) reader that you will find at the register, and then it will transfer payment information wirelessly and almost instantly. In order to get involved, you need to register your debit or credit card with Apple Pay. You simply take a picture of your card, Apple will verify it, and then your card becomes accessible through something called a Passbook app.

The Passbook app has been around since 2012 and works similarly to Google Wallet, meaning you can store coupons, special offers, boarding passes, and more things you would generally put in your physical wallet, all on your smartphone. In the end, this should eliminate the need for the leather wallet altogether. Jeff Weber, Founder of Smart Balance Transfers, said in an article that by Apple putting Passbook at the center of its Apple Pay system, "we are likely one step closer to the day when we will leave our credit cards at home."

Apple Pay will be launched sometime this month, and thus far is only compatible with the new iPhone 6 or the iPhone 5 models that are paired with the Apple Watch.

Extra Tip: Apple isn't the first company to introduce mobile payments. Not by a long shot. However, this is the first mobile payment system that seems to have the potential to really explode because of the popularity of Apple products and their ability to overcome some of the pitfalls other payment systems have had in the past.

How Marketers Can Take Advantage of the New Apple Pay

Retailers such as Macy's, Whole Foods, Walgreens, McDonalds, Sephora, and many more big name brands have all made it possible to use Apple pay at their stores. However, small business marketers can also start taking advantage now that the new iPhone is available and in full swing. Below explains how marketers can (and should) take advantage:

  1. Optimize your email campaigns, SMS, direct mail, etc. for mobile wallets.

This is as easy as adding a clickable "Add to Passbook" button to your campaigns. Remember, Passbook was originally created to help people digitally store things like boarding passes, movie tickets, and coupons. Although Apple has not officially announced yet if Passbook's features will be integrated with Pay, many speculate that it is only a matter of time. This means that those things--coupons, promotional offers, loyalty programs, etc.--could be integrated into the checkout process.

Take advantage of this by making sure you have a good number of quality coupons and programs out there. Take another look at Passbook and become familiar with how to use the app and how to integrate your marketing initiatives. In other words, try to have your brand content sit inside Passbook. Consider the following example:

"You enter a Target store with Target's app in your iOS device. They push a coupon, say valid for 2 hours in the form of a notification through iBeacon app. The coupon stays in your Passbook and could be integrated at the check out process."

iBeacon technology was something else developed by Apple. It is a transmitter and receiver that is built into their devices and iOS7 to help users receive relevant messages. This combined with Passbook is probably the biggest and most influential ways marketers can use Apple Pay to their advantage.

  1. Take advantage of a customer's proximity.

It's no secret that local considerations have become increasingly important for marketers, and Apple Pay builds on that notion. iBeacon technology will allow Passbook to know where someone is at any given moment, which offers up the opportunity for targeted mobile ads. This goes along a little bit with the last point: When consumers are in close proximity to a shopping destination, Passbook will remind them that they have offers, coupons, reward points, etc. if they are saved on the consumer's iPhone (and as discussed above, part of that is your job!).

In short, instead of sending out a general mobile ad to those who live in a certain area, you could advertise to those who are already shopping. Advertising Age author Dan LaCivita gave the following example: "The new Brand X shampoo is on Aisle 8" vs. "Try new Brand X shampoo."

  1. Alter your ecommerce user-experience to encourage one-touch checkout.

Plain and simple, it's going to be easier to buy on mobile devices now. The iPhone screens are getting larger and of course Apple Pay is expected to be convenient and preferable, so you should be thinking about your own ecommerce website and/or mobile apps. Put time and resources into making them easy to navigate and looking appealing so people will want to buy, not just research. Remember that one-touch checkout is now going to be an option with Apple Pay, so consider altering your strategy to take advantage.

Published on: Oct 7, 2014