Kohl’s is the first retailer integrating its private label credit card and rewards platform with Apple Pay for in-store use, pointing to the growing influence of mobile payments throughout the customer journey.

Kohl’s has already rolled out this capability to 250 of its bricks-and-mortar stores, with nationwide expansion expected to occur by the end of May. The retailer’s move to integrate its Kohl’s Charge card and loyalty program with Apple Pay speaks to the latter’s widespread adoption among consumers, and signals that other marketers may soon streamline in-store purchasing experiences by linking their charge cards to mobile payment platforms.

“Mobile commerce, at its essence, should be about increasing shopper efficiency through enhanced utility, yet, with all its promise as the future of transactions, the mobile payment has still yet to reach the tipping point of widespread consumer adoption,” said Scott Forshay, senior mobility strategist of mobile product strategy and innovation at IBM. “This tipping point will only occur when either the ease of mobile payments exceeds the physical act of swiping a credit card or the ancillary value of paying via the device positions it as the superior option.

“The single-tap utility of the Kohl’s transaction experience will undoubtedly be the initial point of emphasis. However, if executed smartly, the longer term value to both the brand and shopper lies in the ongoing personalization implications associated with the integration of the private card and loyalty program systems.”

Blending in-store with digital
Kohl’s is continuing to blur the lines between in-store and digital shopping experiences by leveraging mobile technology to streamline customers’ payment processes. Now, consumers purchasing products in-store will be able to enjoy a one-tap checkout while still collecting their Yes2You loyalty points.

Individuals can link their Kohl’s Charge card to Apple Pay, enabling them to leave the physical credit card at home and simply hold their smartphone up to contactless readers stationed by the cashiers. Customers may also add Yes2You to the Wallet application on their iOS 9 devices to instantly begin earning rewards via Apple Pay.

To complete the in-store checkout process, shoppers must press the Touch ID button when holding their iPhone up to the contactless terminal. Apple Watch users can double-click the side button and angle the Watch’s face up to the reader.

Mobile-savvy customers and frequent Apple Pay users may become more inspired to browse Kohl’s in-store products following this integration, as they will not need to carry around a physical wallet in order to make a purchase.

Furthermore, Kohl’s may experience an uptick in loyalty program sign-ups. If consumers are aware they only need to add Yes2You rewards to their Wallet app once and continually reap the benefits, they may take the plunge and join the program in lieu of another retailer’s that still relies on loyalty cards.

Eyes on the omnichannel prize
Kohl’s has explicitly demonstrated its dedication to being a top omnichannel retailer, as evidenced by its regular mobile app updates and its June 2015 adoption of Apple Pay.

Last September, Kohl’s introduced store mode in its mobile app so shoppers could more easily search inventory and locate in-store deals as the department store integrated with Apple Pay and Visa Checkout, underscoring the effectiveness of omnichannel approaches in driving sales (see story).

Additionally, Kohl’s said it is seeing results from its focus on omnichannel initiatives, with more than twice as many digital orders either shipped from or picked up in a store (see story).

IPhone users and Kohl’s fans that have not yet leveraged Apple Pay are likely to do so now, thanks to the retailer’s rollout of a one-tap process that enables them to buy products and earn loyalty points at the same time.

Although many other retailers still require customers to complete an extra step of opening a loyalty app or scanning a rewards card to receive their points, Kohl’s latest integration may spur them to speed up their innovative efforts and combine their branded rewards programs with Apple Pay as well.

“Integrating private card purchase data with loyalty programs affords the brand a more complete view of the individual shopper to enhance its mobile targeting and retargeting efforts with heightened degrees of relevance, benefiting both brand and loyal shopper,” Mr. Forshay said. “Lastly, encapsulating the entire customer purchasing journey within the brand’s app, from consideration to transaction and beyond, transforms the traditional view of the purchasing funnel into a virtuous cycle of value.

“The key performance indicator of any marketing effort is the ability to accurately measure attribution. The power of proactively delivering highly-targeted mobile marketing messages based on behavioral and transactional analytics, attributing that communication to an in-store purchase and allowing that experience to inform ongoing marketing efforts is extraordinarily powerful.”