Square Chases American Shoppers With Portland Marketing Blitzby
Oregon campaign aimed at attracting bigger merchants
Company plans other shopper education blitzes in other cities
Square Inc. has persuaded millions of dog walkers, food trucks and other small merchants to use its payments hardware, a square white credit-card reader that plugs into a merchant’s smartphone or tablet. But the company has struggled to get significant numbers of bigger retailers to use its technology, which is weighing on the stock.
So the San Francisco company just wrapped up a two-month marketing blitz in Portland, Oregon. Square’s first campaign aimed at consumers featured display ads on trains, discount beer tastings, yoga classes and pedal-cab rides -- all designed to persuade shoppers to use mobile wallets. Square also sells devices that allow merchants to accept Apple Pay or the new generation of chip-embedded credit cards.
The Portland campaign boosted mobile wallet payment volume to 3 percent from less than 1 percent among hundreds of participating merchants, with many shoppers using the technology for the first time, the company said. Now Square is taking the show to other cities in the U.S., where mobile payments represent just 1 percent of all transactions, but are expected to triple to $54 billion in 2019, according to Javelin Strategy and Research.
“We need more consumers who want to use mobile wallets before merchants are willing to accept them,” said Emmett Higdon, an analyst at Javelin. “These marketing campaigns are critical to help goose consumer adoption.”
For years, Square relied on small merchants to pass the word about its technology. But the company decided to target consumers after launching a new payment reader in November that lets people use mobile wallets and the new generation of chip-embedded credit cards. Square makes most of its money by charging 2.75 percent for each transaction and it wants to win over stores that move more merchandise than your average farm stand.
Square chose Portland for the high concentration of merchants already using its technology and widespread antipathy to big-box retail chains. The campaign featured signs on counter tops in cafes that promote mobile wallets as a quick and convenient way to pay. Square also hosted events where attendees could pay $2 for cupcakes, face painting, flavored popcorn and other deals from local merchants only available to those paying with their phones, using discounts to entice first-time users. Apple Inc. helped the effort by hosting a merchant training for its Apple Pay mobile-payment service in one of its stores.
“There’s this delightful moment when someone uses a mobile wallet for the first time,” said Jesse Dorogusker, Square’s head of hardware. “There’s a great a-ha when people realize the phone in their hand has had this capability all along.”
Morgan Gary, owner of Spin Laundry and Lounge, put Square’s mobile wallet signs up in her environmentally friendly laundry, coffee house and bar. She uses Square’s reader to take payments for biodegradable detergents and the store’s house roast dubbed “Permanent Press.”
Some customers asked for help using Apple Pay for the first time upon seeing the signs in her shop, she said, adding that she’s seen an uptick in mobile wallet payments.
“Most people have a smartphone and aren’t sure where they can use it and where they can’t, so having a sign up helps,” Gary said. “Education is really important to let people know it’s accepted.”