High Passbook Redemption Rate Makes Pep Boys Bullish About Apple Pay

By Christine Kern, contributing writer

30% of Those Who Save Pep Boys Coupons to Passbook Use Them

Pep Boys, a nationwide automotive service and retail chain, was one of the first brands in its category to mobilize its offers using Apple’s Passbook and Google Wallet. While Passbook has not caught on as quickly as some expected, Apple’s recent announcement regarding Apple Pay should benefit the app significantly.

Pep Boys reports promising results after using Apple’s Passbook and Android’s Google Wallet to enhance mobile wallet features and offer quick, redeemable coupons to customers.

Pep Boys’ mobile wallet program was introduced in April 2014, and has yielded strong statistics. The brand has claimed significant “save to phone” and redemption rates, which have led to additional revenue.

Ron Stoupa, chief marketing officer of Pep Boys, sees a bigger opportunity for his brand to boost coupon redemptions in Apple’s Passbook mobile wallet. Although Passbook got off to a rocky start with brands, the proliferation of mobile wallet offerings from Google and PayPal in the past few years makes Stoupa confident that Apple has what it takes for successful mobile payments.

"It looks like they took some learnings from Google Wallet [with Apple Pay,]" he said. "They have an extremely more loyal user base than anyone out there, so it will be interesting. I think it will get impressive trial more than Google Wallet did."

Stoupa’s response is based on the results that his company has seen since starting a coupon program in May to mobilize its database of 36 million loyalty members across 805 locations.

Twenty-six percent of clients who saw a Pep Boys Passbook pass ended up adding the offer to Passbook, and 30 percent of those redeemed the offers in-store. Vibes, a mobile marketing firm, asserts that the average redemption rate is 24 percent.

The offers are sent out via the brand’s text messaging program. Pep Boys also pushes the offers through mobile calls-to-action on direct mail and email that is sent to a segment of users. The coupons can be saved to Passbook or the Google Wallet app, but Pep Boys has seen "significantly" more offers saved to Passbook.

"People are viewing offers on Passbook and 26 percent of them that viewed that offer added it to their mobile wallet," Stoupa said. Thirty percent of the consumers who add the coupons to Passbook are then redeeming them.

“Pep Boys has done a great job of integrating Passbook into their overall mobile strategy,” said Mr. Tack. “It is important to orchestrate all mobile touch points all along the customer journey and make sure they are all integrated.”

“These Pep Boy results are the gold standard for the mobile wallet industry,” he said.

Typical offers presented by Pep Boys and other brands include discounts on services and loyalty cards.