Black Friday’s Payment Method Showdown: How Did Mobile Wallets Fare?

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It’s the weekend after Black Friday, and the InfoScout team is busy analyzing millions of receipts to report on where people shopped and what they bought. But what about how consumers paid for those Amazon Fire tablets and Fitbit trackers? With the rise of mobile wallets like Apple Pay, Android Pay, Samsung Pay, and PayPal, we wanted to find out if this Black Friday would be the shot heard round the world for mobile payments.

 

With 300,000 Americans submitting pictures of receipts through apps on their smartphones, InfoScout can identify exactly what type of devices they’re using, down to the model numbers. This allows us to study transactions made by people who actually have the capability to use mobile payment technologies such as NFC exclusively at stores with compatible point-of-sale (POS) terminals. For Apple Pay, this qualifies owners of the iPhone 6 and above. On the Android side, the device market is far more fragmented, so we limited our study to owners of fairly equivalent devices: the two most recent versions of Google’s Nexus phones, the LG G3 and G4, and the Samsung Galaxy S5 & S6.

 

We found Apple Pay usage at its lowest rate since we’ve started tracking it, being used for only 2.7% of Apple Pay-eligible transactions. This is a fairly marked decrease from what we saw last year on Black Friday, when iPhone 6 owners used Apple Pay for 4.9% of eligible transactions at participating merchants. Of course, back then the primary owners of Apple Pay-enabled devices were early—and technologically curious—adopters, whereas now the technology is in the hands of the broader population. Below you can see the usage over time in our quarterly Apple Pay tracking reports.

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On the Android side of the table, we saw an even lower rate of mobile wallet usage – just 2.0% of eligible transactions. This was our first time investigating mobile wallet usage among Android owners and we were interested to see that of all the mobile wallet options available, it was actually PayPal that came out on top on Black Friday. Since Android Pay and Samsung Pay were both released within the last three months, we may see this picture change as time goes on.

So what was the most common way shoppers paid for their Black Friday bargains? Plastic. This year, 79% of iPhone users and 74% of Android users paid with their credit and debit cards on 2015’s iconic shopping day, and that doesn’t even count the mobile wallet transactions that were funded by credit/debit cards.

How Android and iPhone users paid for their Black Friday purchases.

Apple Pay’s Black Friday, By The Numbers

Here at InfoScout, we love data.  And we love mobile technology.  So it shouldn’t surprise anyone that we’ve put on our analytics hats to learn how the hottest new player in mobile payments, Apple Pay, performed in the Super Bowl of shopping: Black Friday.  To do this, we tracked the shopping behavior and opinions of those in our 170,000 household consumer panel who own an iPhone 6 / 6 Plus and shopped at a retail store that accepts Apple Pay this Black Friday weekend.

Despite its hype within the tech community, Apple Pay still has a lot of ground to cover.  Out of all Apple Pay-eligible transactions on Black Friday, the new NFC-powered mobile payment method was used less than 5% of the time. Let’s explore the details behind this number and what the landscape looks like in terms of Apple Pay usage.

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According to these real-time shopper surveys data, just over 9% of the iPhone 6 and 6 Plus users who shopped on Black Friday have ever tried using Apple Pay at checkout.  Among those who have used Apple Pay, there was a 50-50 chance that they would use it at checkout when shopping at a participating retailer on Black Friday.  To understand the “why” behind this behavior we explored the extent to which the product or experience itself was the culprit.  We asked Apple Pay users what they thought of it as compared to swiping a card, and found overwhelmingly positive reactions to the experience.

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If Apple Pay users have had such positive experiences, why did only half of them use Apple Pay when given the chance on Black Friday?  Well, we figured they’d know best… so we asked them.

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The biggest piece of the puzzle is simple: they were unaware that the store accepted Apple Pay.  The second-most common reason is that they simply forgot. This isn’t necessarily surprising; the checkout process has become habit for most, and integrating mobile payments into your purchase flow requires change to a very deeply ingrained pattern of behavior.  These two data points highlight Apple’s need to find a way to capture mindshare at checkout, and to remind or inform the user that the purchase could be made with Apple Pay.  Of the two icons currently in use at Apple Pay-accepting stores, only one actually has any Apple branding, and both are fairly subtle and unlikely to grab attention.  If there were a more prominent display, Apple could feasibly increase Apple Pay usage by over 40% – simply by having its user base behave more consistently.

 

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Either of these two icons can be seen at retailers accepting Apple Pay, but only one of them directly refers to Apple Pay.

Taking a step back, however, we see that the biggest opportunity is for Apple Pay to drive adoption among the 90% of iPhone 6 and 6 Plus users who have yet to try it – despite shopping at stores that accept Apple Pay.   InfoScout’s survey of these potential users yielded some interesting results…

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A whopping 32% of eligible users haven’t tried Apple Pay because they aren’t familiar with how it works, and 11% simply haven’t heard of it.  That means that nearly half of people who are eligible to use Apple Pay can still be influenced via informational outreach or educational advertising. We’ve already seen that most users who pay with Apple Pay find it to be easier and faster, but now Apple needs to better inform their potential user base of these benefits.  Bonus points to Apple if they can use that same campaign to address any security concerns users may have.

Even with all this data in hand, it is very evident that Apple Pay is still a nascent competitor in the payments industry.  Apple Pay has only been around for 5 weeks, and with over 70 million Apple Pay-capable iPhones expected to sell in Q4 of this year, adoption of Apple Pay may shift drastically as more people upgrade their devices and the positive word-of-mouth from existing users spreads.

We’ll be tracking it all, so stay tuned in to all the action by subscribing via the button above.

InfoScout Closes $16 Million Series B Funding

InfoScout Closes $16 Million Series B Funding

 Bain Capital Ventures and Multiple Strategic Investors Fuel Growth of America’s Largest Consumer Panel and Fund Expansion Abroad with the Acquisition of Out of Milk. 

SAN FRANCISCO, June 19th, 2014 – InfoScout, a mobile-powered retail market research provider, today announced that it has closed a $16-million round of Series B financing. The round includes participation from Bain Capital Ventures who led InfoScout’s Series A, as well as Horizon Partners, MHS Capital and multiple strategic investors.  To date, InfoScout has raised $21 million.

The company will use the infusion of capital to grow America’s largest consumer panel to one-million participants and expand into key international markets through the acquisition of the world’s most-used and top-rated shopping list app, Out of Milk.  The app has nearly one million active users who add 12 million items to their shopping lists every month, thus expressing their purchase intent before they go shopping.

“InfoScout has created fun and rewarding smartphone apps that incentivize shoppers to take pictures of their itemized receipts, and we now capture over 50,000 grocery shopping trips daily – more than five times the next largest all-retailer consumer panel,” said Jared Schrieber, InfoScout CEO.  “Now, with the addition of Out of Milk and a powder-keg of capital, we’re prepared to fuel the next phase of explosive growth in our panel and expand the types of data and survey responses these shoppers share along their daily path-to-purchase.”

Since launching its real-time shopper insights solutions in October 2013, InfoScout has experienced incredible momentum, and the company’s client list now reads like the who’s who of the consumer goods industry:  Procter & Gamble, Anheuser-Busch, Unilever, PepsiCo, Kraft, Nestle, and others.  These clients leverage InfoScout’s path-to-purchase insights to guide brand innovation efforts, optimize their marketing mix during new product launches, and course-correct major promotional campaigns as they happen.

“The InfoScout team has the technical ability, vision and execution required to change the way consumer data fuels the retail experience,” said Ajay Agarwal, managing director at Bain Capital Ventures and InfoScout board member. “We’ve believed in their vision since the very beginning, and the users, insights and momentum they’ve built over the last year has been unprecedented. We’re excited to work with the team as they continue on their phenomenal trajectory.”

Want to see the data in action?   Visit InfoScout’s free grocery brand and retailer dashboards for insights at InfoScout.co.

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About InfoScout

InfoScout’s real-time shopper insights make brands better marketers by providing the industry’s largest, richest and most actionable source of household purchase information across all retailers at the item-level.  The company’s proprietary consumer panel, launched in the summer of 2012, is designed from the ground-up to provide marketers with a broader and more representative ‘mini-America’ while enabling deeper dives into specific subsets of the population than traditional panels support. Leading consumer goods companies such as Procter & Gamble, Anheuser-Busch, PepsiCo & Unilever leverage InfoScout’s data and analytics to monitor changes in shopper behavior and better understand the ‘why behind the buy.’

 

Media Contact

Cristin Zweig

619-865-7019

Cristin@infoscout.co

Healthy Eating Is Not A SNAP

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The White House and USDA are strong advocates of healthy eating, providing U.S. citizens guidance on how to achieve balanced nutrition on a reasonable budget. But is the federal government’s food assistance program able to help those most in need meet its own recommendations? In light of the recent changes to the Supplemental Nutrition Assistance Program (SNAP), the team at InfoScout wanted to find out.

In 2013, SNAP – also known as food stamps – provided an average monthly benefit of $133 per person and $275 per household in 2013, reaching 48 million people across 23 million households. SNAP benefits were decreased by about $10 per month per person in November 2013, reducing the maximum benefit to $189 per individual. Given this reduction in benefits, we decided to explore the extent to which beneficiaries of the program could eat healthily on the reduced budget of $189. Let’s find out.

The USDA’s ChooseMyPlate.gov website provides a plethora of information for a healthy lifestyle, from weight management and physical activity tools and guidelines to tips for eating healthy when eating out. The site showcases various cookbooks including a 7-day meal plan that meets a recommended 2000-calorie diet with the right balance of food groups and nutrient intake, all at a “moderate cost”.

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So we try to answer the question: can an individual relying solely on government benefits afford to follow the government’s recommendations regarding a balanced diet?

Over the past two years, InfoScout has established America’s largest and richest source of household purchases across all retailers at the item level. With this data we are able to dig into real-world food spending patterns to find out.

We began by looking at each recipe and its ingredients within the USDA’s 7-day meal plan. We took each ingredient from the USDA recommended menu and paired it with the top-selling product corresponding to that ingredient from our InfoScout database, where we’re able to see per-basket SNAP purchases. Factoring in the packaging sizes and prices per serving of each ingredient, we calculated the price of each meal.

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We found that a single adult following the USDA recommended 2000-calorie diet would spend nearly $8 per day, or $240 per month at current food prices. That’s $51 more per month than the maximum benefit allowable under the SNAP program. Put in practical terms, this means that even with a perfectly-planned and executed grocery budget, a SNAP recipient would only be able to feed themselves until the 24th day of the month, and run out of financial support before dinner.

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This gap becomes even more prominent as the household size grows. For each additional household member, the incremental allotment decreases. So while an individual can get $189 each month, a household of two gets $347, or $173.50 each. As these per-person benefits decrease, the cost of feeding each person remains the same. So as you can see, that gap grows tremendously as the need increases.

As the household size grows, so does the gap between the home's benefits and its food expenses.

With healthy diets clearly so far out of reach for the 47 million Americans relying on the government for support, it is no surprise that those in the lower income brackets turn to higher-calorie, though often nutritionally-poor, meals. We found that, compared to high-income consumers, lower-income Americans have a 30% shift in their food expenditures towards snack foods (like potato chips, cookies, and candy) and away from nutritional foods (like yogurt, fruits, and vegetables). While the USDA-suggested diet clocks in at about 247 calories per dollar, our study of the most purchased snack foods yielded an average of 672 calories per dollar, with popular brands of chips leading the pack at an incredibly efficient 752 calories per dollar.

Calorie counting doesn’t stop at the grocery store, especially with more and more fast-food chains accepting food stamps. A quick study of Burger King, KFC, and Subway, where a standard meal-deal includes an burger or sandwich, side of fries or chips, and a soda yielded an average price of around 250 calories per dollar – effectively the same cost per calorie as the buying groceries to follow the USDA suggested meal plan. And since fast food doesn’t require any meal-planning, grocery-shopping, or cooking, it’s unsurprising that low-income consumers often prefer a meal on-demand. The problem, of course, is that a fast food diet can easily result in 230% excess fat and 370% more sodium than recommended, all while offering fewer key nutrients.

Moreover, low-income consumers can stretch their food budgets further with choices like McDonald’s McDouble sandwich which packs 390 calories for just $1 – that’s 58% more calories per dollar than buying healthy foods at a grocery store. If a person could live off McDouble’s alone (not that anyone is suggesting that’s a good idea), they’d save $90 per month compared to a healthy diet of home-cooked meals and be able to feed themselves via food stamps throughout the entire month.

Whether it’s the relatively cheap meals on-demand offered by quick service restaurants or the low-cost calories of snack foods like potato chips, we should not be surprised to know that lower income Americans (especially women) are more likely to be overweight or obese while also experiencing poorer health and shorter lifespans. With the rapid rise from 11% of American households receiving support from the SNAP in 2008 to 20% of households in 2013, at a cost of nearly $80 billion, it’s no wonder that the programs merits and funding have been hotly debated in Congress. At InfoScout, our intent is not to fuel the debate as to whether SNAP funding should be increased or decreased to support more or fewer participants. Instead, we believe the data begs for further debate over fundamental policy questions such as:

~ Should SNAP offer greater incentives towards purchases of healthy foods such as fruits and vegetables to help improve the healthy outcomes that everyone desires from such a program?

~ Should the Supplemental Nutrition Assistance Program even allow the purchases of junk foods and fast foods that fail to meet basic nutritional standards? (Especially considering the fact that these foods offer lower costs per calorie to those Americans who can’t afford to follow a healthy meal plan.)

~ How should we prioritize healthy eating amid a growing base of people relying on federal support, and the associated growing costs?

In the meantime, we welcome your thoughts and feedback as we continue to study real-world purchasing behavior.