Journal of Retailing and Consumer Services 57 (2020) 102230

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Journal of Retailing and Consumer Services

journal homepage: http://www.elsevier.com/locate/jretconser

Mobile payment and online to offline retail business models

Shu-Hsien Liao *, Ling-Ling Yang
Department of Management Sciences, Tamkang University, No. 151, Yingjuan Rd., Danshuei Dist, New Taipei City, 251, Taiwan, R.O.C

A R T I C L E I N F O A B S T R A C T

Keywords: Mobile payments are services that use mobile devices to make payments. When digitalization moves across
Mobile payment channel boundaries, online to offline channel retail will expand. Online to offline retailing will become the future
Retail channels retail owner stream and retail operators will move from cross-channel or multi-channel to omni-channel. This
Retail business models
study investigates a market survey in Taiwan developing a data mining analytics including clustering analysis
Online to offline
Data mining
and association rules based on a snowflake schema database design. The role of mobile payment is determined in
terms of new retail payment mechanism that promotes a better consumer purchase experience in an online to
offline business environment.

1. Introduction (Kalinic et al., 2019).

The global retail industry is undergoing transformation. The future
of the retail industry will be very different. Online to offline and pay­
ment technology will bring value innovation. When digitalization moves
across channel boundaries, online to offline channel retail will expand.
Because consumers are not loyal to any channel, the retail industry must
provide a seamless purchase experience for both online and offline
channels. Global retailers must also actively invest in the online to off­
line experience. In 2019, up to 90% of global retail sales are still
generated from physical stores and the top 250 rankings show that,
despite the rapid development of e-commerce, offline channels still
dominate the current retail industry (Deloitte, 2019). However, in the
future, the role of offline channels will change from providing goods to
becoming a provider of service and living solutions. Technology-assisted
upgrades mean that consumers are becoming more accustomed to
innovative technology, as well as gold flow and business models. Digi­
tization has expanded to all stages of the consumer purchase journey and
its impact is continuing to increase in fields such as mobile payment.
Mobile payments are services that use mobile devices to make payments.
The rapid development of payment models throughout the world means
that market news and dynamics affect all walks of life
(Li�ebana-Cabanillas et al., 2018). Consumers send payment instructions
directly or indirectly to banks and financial companies via mobile de­
vices, the Internet, or proximity sensing (Near field communication,
NFC) to generate monetary payments and the transfer of funds. By
facilitating mobile payments and enabling terminal devices, providers of
applications and finance firms provide financial services via the Internet
The McKinsey report notes that global shipments of mobile devices
will reach 3.9 billion in 2019 and 7.9 billion connected devices will be
online. In the Age of Retail 4.0, consumers can use the Internet anytime,
anywhere, collect and pay and share information about purchasing de­
cisions (McKinsey and Company, 2019). The advent of multi-, cross-,
and omni-channels means that physical stores are affected by e-com­
merce. Retail operators must eliminate the boundaries between online
and offline and reconsider the role of the physical store by creating
different systems or packaging shopping guide services, optimizing
product and service portfolios and using new technology to strengthen
product experience and marketing and increase operational and busi­
ness performance (Hur�e et al., 2017). The retail sector must integrate
platforms and data across heterogeneous databases and open interfaces
and use technology to integrate online and offline business to increase
consumer interaction and contact and allow more effective marketing.
Increasing speed and convenience will allow retailers to support fast
shopping decisions, mobile payments and multiple delivery.
Omni-channel pick-up services such as online booking and self-service
pick-up have spread from Europe and the United States to Asia and
the Internet of things (IoTs) provides consumers with convenient
post-return services at home. Mobile payments or e-wallets will become
the main vehicle for mobile payment and the transaction base will
change from physical stores and websites to smart device APPs and
cloud platforms (Digital time, 2015) such as Google, Apple and Line.
International platform operators, financial industry operators and tele­
communications operators have all invested in this market to create a
transactional environment for consumers and business. An online to

* Corresponding author. Department of Management Sciences, Tamkang University, No. 151, Yingjuan Rd., Danshuei Dist, New Taipei City, 251, Taiwan, R.O.C.
E-mail address: Michael.liao2@msa.hinet.net (S.-H. Liao).

https://doi.org/10.1016/j.jretconser.2020.102230
Received 12 May 2020; Received in revised form 5 July 2020; Accepted 8 July 2020
Available online 1 August 2020
0969-6989/© 2020 Elsevier Ltd. All rights reserved.
S.-H. Liao and L.-L. Yang
offline business model, which seamlessly combines online and offline
experiences, is what consumers expect from brands in the digital age.
90% of retail consumption in the Asia Pacific region is currently offline
but more than 40% is affected by the Internet. Online influence is ex­
pected to affect up to 50% of retail consumer behavior in 2020. Inte­
gration of online and offline business and cross-platform communication
is key to the success of the retail industry in the future (Kemp and Moey,
2019).
In terms of international markets, China is a global leader in near-end
mobile payment applications, accounting for 61.2% of global mobile
payment users in 2018. Even if the market share of mainland China
declines with the increase in the number of users in other parts of the
world, by 2021, China will still account for 56.0% of the global number
of users of near-end mobile payments. As for the Asia-Pacific region, due
to the contribution of China to mobile payments, the penetration rate of
near-end mobile payment users in the Asia-Pacific region will be as high
as 50%. However, from the perspective of total population use, the Asia-
Pacific region is comparable to North America. In North America the use
of smart phones came earlier; thus, North American users are more
willing to try to mobile payment (Sonawane, 2018). As for parts of
Western Europe, the use of contactless cards for payment by consumers
has left the development of near-end mobile payments impeded. Since
Western Europe introduced a contactless payment service using credit
and debit cards, consumers feel that it is not necessary to make payments
via mobile phones. If operators can find a differentiated service model,
businesses can change the current market situation (Techcrunch News­
letters, 2019). In emerging markets such as Latin America, the Middle
East and Africa, the biggest obstacles to the use of near-end mobile
payments include low bank account penetration, low penetration of
smartphones, and lack of support for payment terminals. Instead of
using advanced technology payment services, other methods such as
non-contact stickers are favored. However, if calculated by the global
population, eMarketer reports that 13.2% of the world’s population will
become users of near-end mobile payments in 2018. By 2021, this pro­
portion is expected to grow to 17.2%. While the growth rate of this
forecast may disappoint manufacturers, it does also illustrate the po­
tential for strong growth (eMarketer, 2019).
In terms of the Taiwanese mobile payment market, the results of the
Taiwan MIC survey conducted by the Taiwan Council show that the five
areas of retail business that exhibit the most rapid development in mo­
bile payments between 2017 and 2018 are “convenience supermarkets
(75.6%)”, “volume shops (42.5%)”, “supermarkets (40.1). %)”,
“department/shopping centers (36.4%)” and “chain catering (33.3%)”.
The fastest growth is for convenience supermarkets, with a 13.3% in­
crease from 2017 to 2018. Five high-potential fields of expansion in
2018 were “Internet stores (36.2%)”, “chain stores (22.8%)”, “trans­
portation (22.3%)”, “payments (17.2%)” and “virtual goods services”,
such as maps, in-app consumption and virtual treasures. (11.8%) two of
which show a high potential for growth. The online store penetration
rate also increased by 16.4% over the figure for 2017 and transportation
grew by 8.4%. In 2018, Taiwanese mobile payments reached 50.3%,
which is a significant increase from 39.7% in 2017 (Taiwan MIC, 2019),
and half of all Taiwanese people between the ages of 18 and 65 who
have a smart mobile phone used mobile payments in 2018. Mobile
payment actions increased for students, recent graduates and seniors in
2018 (Money Magazine, 2019). The statistics of the Taiwan Semi­
conductor Research Institute show that the three most common mobile
payment apps in Taiwan in 2018 were LINE Pay (25.2%), Apple Pay
(17.9%) and JKO Pay (10.4%). Apple Pay only binds credit cards and
does not provide other redundant services, so its market share in Taiwan
is likely to decline. A future link between LINE Pay and JKO Pay is likely
(Taiwan TSRI, 2019). At present, LINE Pay and JKO Pay have more than
4.1 million users in Taiwan and about a dozen banks can directly con­
nect to these accounts (Huang, 2019).
Accordingly, this study examines the mobile payment experiences
for Taiwanese consumers to determine offline, online and online to
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Journal of Retailing and Consumer Services 57 (2020) 102230
offline purchase behaviors. The study also determines how mobile
payment proprietors and their affiliates are disseminated using online to
offline consumer behaviors for different retail channels.
2. Literature review
2.1. Mobile payment
The opening of the global financial environment, the evolution of
electronic market demand and changes in consumer behavior patterns
are key factors that drive the growth of the global mobile payment
market (Sinha and Adhikari, 2018). From a technological perspective,
mobile payment refers to services that use mobile devices for payment.
Consumers use mobile devices to pay for services and digital or physical
goods without the need for cash, checks or credit cards (Zhao et al.,
2019). Payment methods for mobile service operators and bankers have
proliferated. Operators include financial institutions and banks that
issue credit cards, Internet service companies (such as Google), mobile
communication service operators, constructors of communication
network infrastructure (Orange’s w-HA) and multinational companies
that produce mobile devices (Ericsson, BlackBerry and Apple) (Wang
et al., 2019). In terms of the market, mobile payment changes the way
people consume, changes the business model for related industries and
has an effect on national economies (Bailey et al., 2020). To take
advantage of the business opportunities that global operations bring,
governments in Europe and the United States have promoted the rapid
development of mobile payments. The Danish Central Bank stopped
printing banknotes and minting coins in 2014 and announced that it
would stop banknote transactions in January 2016 and promote a
nationwide digital payment mechanism. Future daily transactions will
be paid by action or credit card (Statista, 2019). Techcrunch reports that
in 16 countries, the number of mobile currency accounts exceeds the
number of traditional bank accounts (Techcrunch Newsletters, 2019).
Mobile payment is an important development for finance technology
(FinTech) and an innovative business model for the retail industry
(Meyll and Walter, 2019).
2.2. Online to offline – the different business models use multi-, cross-,
and omni-channels
Multi-channel was the first type of transaction method to become
available when the Internet became a part a consumer alternative. This
business model allows consumers to use different channels to commu­
nicate and purchase from a company, but the channels are disconnected
and completely separate, so channels for multi-channel operators
compete with each other and consumers choose an appropriate channel
(Hossain et al., 2019). In terms of online to offline, multi channels work
independently from one another and because there is to communication
between the channels operators, consumers cannot move from one
channel to another during the purchase journey (Banerjee and Bhard­
waj, 2019). The cross-channel business model is similar to that for
multi-channel but the different channels for communication are con­
nected for the cross-channel model. The key differences between multi
and cross channels are that multi-channel involves a presence on one or
more channels, such as a website and a mobile app, but cross-channel
provides a seamless experience across a combination of several
different channels (Radhi and Zhang, 2019). In terms of online to offline,
the cross channel business model involves different channels recording
and communicating information, so consumers cross between different
channels relatively seamlessly during the purchasing journey (Li et al.,
2017). The omni-channel, business model is the most advanced type of
marketing channel. It uses multiple channels that communicate with
each other and these channels work seamlessly together and often
simultaneously to provide consumers with a comprehensive experience
across all online and offline channels (Yumurtacı Hüseyino� glu et al.,
2018). The multi and omni-channel models involve selling across
S.-H. Liao and L.-L. Yang
multiple physical and digital channels but the business models differ in
terms of how the consumer experience is integrated across those chan­
nels. Modern consumers do not see a brand in silos; they are likely to
have multiple touch-points with a retailer and the purchase journey
between each touch-point and channel must be seamless (Song et al.,
2019). The key difference between the multi and omni-channel models
is that omni-channel joins these touch-points together so the consumer’s
experience is consistent and unified (Ryu et al., 2019). In terms of online
to offline on omni-channel, mobile commerce is a key driver for a
number of the initiatives to switch to an omni-channel retail marketing
and sales approach. It removes traditional barriers between online and
offline and is an extremely valuable tool for advertisers that embrace
mobile technology (Ailawadi and Farris, 2017). Whether retail uses a
multi-channel, a cross-channel or an omni-channel business model, the
consumer mobile payment experience is at the forefront of business
development strategy (Hur�e et al., 2017), so knowledge that is learned
from consumer behavior is used to increase the performance of business
and profit models.
2.3. Data mining
Data mining, which involves using a large database to build a model
and find hidden associations and features, is the process of discovering
patterns in a relatively large data set using artificial intelligence, ma­
chine learning, statistics and databases (Bauer and Jannach, 2018). Data
mining models use classification, estimation, predictive modelling,
clustering/segmentation, affinity grouping or association rules,
description and visualization and sequential modelling. Application
methods including association rules, sequential patterns, grouping
analysis, classification analysis and probability heuristic analysis are
used in studies of online marketing (Pant and Pant, 2018; Aldowah et al.,
2019). Data mining is used to gain knowledge of mobile payment and
online to offline from banking systems and retail channels and is passed
d to mobile payment and retailing operators to improve business and
profit models (Koutanaei et al., 2015). This study examines the experi­
ences of Taiwanese consumers in terms of mobile payment to develop an
online to offline business model. This study also determines how mobile
payment and online to offline proprietors and their affiliates are
disseminated using payment and retail marketing and sales business
models.
3. Research design
3.1. Subject background
A questionnaire pre-test was tested using a small sample of re­
spondents before the full-scale study, in order to determine any unclear
wording or problems with administering the questionnaire. The official
questionnaire was then disseminated in the form of a web survey with a
link to an online questionnaire. It was sent to individuals using
messaging on communication apps and social networks, such as Face­
book, Line and WeChat. The online questionnaire recorded the IP
address of the respondent and deleted repeat actions from the same IP
address, in order to avoid repeated answers and to increase the accuracy
and completeness of the data. From July 15, 2018 to February 20, 2019,
1750 questionnaires were issued and 1657 were successfully completed,
which is a rate of 94.69%. 42.55% of respondents were male and 57.45%
were female. 35.79% were less than 25 years old, 33.80% were between
26 and 35 years old and 30.42% were more than 36 years old. 75.5% of
respondents were university graduates (including colleges). 61.32% of
respondents were in employment and 29.27% were students. 45.93% of
respondents had an income of less than TWD 10,000 yuan (inclusive)
per month, 28.00% had an income of TWD 10,001 ~ 20,000 yuan and
26.07% had an income of TWD 20,001 yuan (inclusive)., 53.47% of the
respondents were single, 24.32% were in a relationship and 22.21%
were married.
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Journal of Retailing and Consumer Services 57 (2020) 102230
3.2. Database modelling – snowflake schema database
Berson et al. noted that a snowflake schema database is constructed
using dimensional data tables and fact table, and the dimensional
structure of the data is presented in a star schema, a snowflake schema,
and a fact constellation schema. A multi-dimensional data model is
necessary to organize and store a large amount of data in the data
warehouse so that queries and analysis decisions can be optimized. This
study uses a snowflake schema, which is an extension of the star schema.
This queries the data and saves storage space and is easier to maintain
than other schema modes that use a relational database. A total of 1657
valid questionnaire data is divided into six sections with 29 items for a
snowflake schema database design. All questions use nominal and
ordinal scales (not the Likert’s scale). All items use multiple choice
questions. An example is:
When and where do you prefer to purchase a product online and pick
up or deliver offline?
①Designated place (e.g. working or public place) ②Convenient store
(e.g. 7–11) ③Physical storefront (e.g. Watsons) ④Post office ⑤Home
delivery ⑥Other.
(Please list your three top choices in order//).
The snowflake schema database is shown in Fig. 1 and includes 16
fact tables, 16 relationships and 123 dimensions.
3.3. Data mining tool – SPSS modeler
The IBM SPSS Modeler software is a multi-functional big data ana­
lytics and data mining workbench that quickly and intuitively constructs
accurate predictive models and determines patterns in structured and
unstructured data. Modeler is a data mining and predictive analytics
software package that allows a variety of modelling methods that use
self-learning AI and statistical data from machines, each with a specific
intensity for specific types of problems. Modeler is used for business
intelligence and analytics. SPSS Modeler provides a different classifi­
cation of clustering in the modelling node; the data analysis process and
the main set of nodes are linked together, to complete the analysis of the
data stream processing. For example, data node is to retrieve necessary
data from database. Type node is set up the data code with metadata
definition. Filter node is to extract data to analysis node, such as K-
means extending to next data mining analytics on Apriori analysis. This
study uses the SPSS Modeler to analyze data using K-means clustering
and then uses an Apriori algorithm for each cluster to determine asso­
ciation rules (Fig. 2).
4. Data mining analysis results
4.1. K-means clustering analysis results
By using SPSS Molder, this study classifies subjects into three groups
using K-means clustering. The snowflake schema is used to construct six
major structures: “mobile payment profile mode”, “mobile payment user
behavior mode”, “consumer offline behavior mode”, “consumer online
purchase behavior”, “consumer online to offline purchase behavior” and
“mobile payment device user behavior”. Clustering variables were used
to define the consumer’s behavioral preferences and characteristics. In
terms of the characteristics that are obtained from the cluster data, they
are named Cluster 1 (531 records) fashionable student group, Cluster 2
(567 records) office worker group that enjoys life and Cluster 3 (559
records) service-oriented mature male group.
4.1.1. Cluster 1: fashionable student group
This group is mainly composed of female students who are less than
25 years of age and who are studying. Their disposable income is less
than TWD 10,000 (inclusive) per month. In terms of mobile payment
purchases, they prefer to use JKO Pay for mobile payments for fashion
apparel that costs less than TWD 300. The reason is exclusive discounts.
S.-H. Liao and L.-L. Yang
Fig. 1. Database modelling – Snowflake schema database.
They use mobile payment to pay on the Internet. The source of mobile
payment information is previous purchases using Apple Pay, JKO Pay or
Opel Pay. The offline channel is mainly used to purchase fashionable
clothes. They make offline purchases because they like the feeling and
experience of physical stores and this affects purchase and re-purchase
intention. The online channel is used to purchase the same items that
are purchased se using mobile payment offline. The main mobile pay­
ment platform is Shopee Online. They like the fact that online operators
provide a detailed description of products, after-sales service and free
delivery. In terms of online to offline, when there is an online purchase
of products such as beauty and health care, the service provided that is
provided by the supplier to check the progress of the delivery is
important.
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Journal of Retailing and Consumer Services 57 (2020) 102230
4.1.2. Cluster 2: office worker group that enjoys life
This group is mainly composed of female office workers who are
aged 26 to 35, and have a disposable income of TWD 10,001 ~ 20,000
per month. In terms of mobile payment purchases, they use LINE Pay to
pay for food and beverage products with a value of TWD 301 ~ 1000.
The transaction history gives the reason for the mobile payment and the
QR code for a mobile payment on the online/offline channels identifies
the purchase (such as: Taiwan Pay QRCode). Mobile payment infor­
mation comes from credit card issuers’ recommendations. In terms of
the offline channel, the goods that are purchased are mainly fashionable
clothes. The main reason for offline purchase is that products informa­
tion can be examined in detail before a purchase. The offline purchased
experience affects the purchase and re-purchase intention. In terms of
the online channel, the main products that are purchased are food and
S.-H. Liao and L.-L. Yang
Fig. 2. Data mining process – SPSS modeler modelling.
beverages, and the main purchase platform is PChome Online. They
require online operators to provide detailed product descriptions, after-
sales service and price concessions.
4.1.3. Cluster 3: service-oriented mature male group
This group is mainly composed of male office workers who are aged
36 and over, with disposable income of TWD 20,001 and more per
month. In terms of mobile payment purchases, they use Apple Pay to pay
for transportation products that cost TWD 301 ~ 1000, and use occa­
sionally use mobile payment at night markets and hand-cranked
beverage store entrances (such as: JKO Pay). The source of mobile
payment information is the recommendations of the operators who
provide the mobile payment service (such as: Line). In terms of the
offline channel, the products that are purchased by this group are mainly
3C electronic products. The reason for offline purchases is the service
and information from shop staff. The quality of the service during the
purchase affects the purchase and re-purchase intention. In terms of the
online channel, the main products that are purchased by this group are
daily household items. The main online platform is Yahoo Online. They
like the fact that online operators provide services such as product
ranking and evaluation, bonus points and feedback scheme benefits.
4.2. Association rules analysis results
4.2.1. Pattern 1: associations of mobile payment and offline channels
In terms of the consumer’s motivation to use a mobile payment and
offline purchase preferences, the types of mobile payment that are
preferred by the consumers are determined by monitoring the con­
sumer’s habits and behaviors, so an operator can tailor information for
consumers (see Table 1). This study uses a minimum antecedent support
of 2% and a minimum rule confidence of 30% to generate five mean­
ingful association rules, as shown in Table 2 and Fig. 3. The lift values
are all greater than 1.
In terms of R1, cluster 1 consumers prefer to purchase shoes and
accessories using the offline channel and use mobile payment because
they prefer the price discounts. The preferred brand of mobile payment
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Journal of Retailing and Consumer Services 57 (2020) 102230
is Apple Pay. They also prefer to purchase specific products using the
offline channel and price and discount affect the final purchase decision.
Mobile payment and offline retailer operators could cooperate with
mobile payment and offline channels, such as Apple Pay and La New for
various shoes and accessories that are purchased by cluster 1 using
mobile payment devices for specific offline purchase preferences. In
terms of the cluster 2 group, using a minimum antecedent support of 2%
and minimum rule confidence of 30%, five meaningful association rules
are generated. The lift values are all greater than 1. In terms of R1,
cluster 2 consumers prefer to purchase 3C electronic products using the
offline channel and prefer to use mobile payment because it is conve­
nient and they do not have to carry cash. The preferred brand of mobile
payment device is JKO Pay. They also prefer to purchase specific
products using the offline channel and price and discount will affect the
final purchase decision. Mobile payment and offline retailer operators
might cooperate with JKO Pay and E-life Mall to provide special sale
activities on limited 3C product items and onsite product experience to
promote mobile payment using the preferred brand of payment device
for offline purchases, using the proposed rules. In terms of the cluster 3
group, using a minimum antecedent support of 2% and minimum rule
confidence of 30%, five meaningful association rules are generated. The
lift values are all greater than 1. In terms of R1, cluster 3 consumers
prefer to purchase beauty and health products using the offline channel
and use mobile payment because they like the exclusive discounts. The
brand of mobile payment device that they mostly use is Apple Pay. They
also prefer to purchase specific products using the offline channel and
price and discount affect the final purchase decision. Mobile payment
and offline retailer operators might cooperate with Apple Pay and
Watsons to provide exclusive prices and discounts for cross-selling on
beauty and health products to promote mobile payment using the
preferred brand of payment device for purchasing offline.
4.2.2. Pattern 2: associations between mobile payment and online channels
In terms of mobile payment and online purchases, for the different
cluster groups and using a minimum antecedent support of 2% and a
minimum rule confidence of 30%, fifteen meaningful association rules
S.-H. Liao and L.-L. Yang Journal of Retailing and Consumer Services 57 (2020) 102230

Table 1 Table 1 (continued )

K-means cluster profiles and categories. Data mining K-means clustering
Data mining K-means clustering method
method
Cluster No. Cluster 1 Cluster 2 Cluster 3
Cluster No. Cluster 1 Cluster 2 Cluster 3
provided by Quality and products purchased
Cluster name/ Fashionable Office worker Service-oriented online after-sales online
profile student group group that enjoys mature male operators service
This group is life group Preferred Free shipping Price discount Bonus points
mainly female This group is This group is offers from
students. They dominated by female mainly male office online
like to go to office workers and workers who operators
physical has a good enough of mostly use the Product types Beauty and Daily household Food/drink
channels and use income available. offline channel to for online to health items
mobile payments They do their buy 3C related offline
to buy homework to buy electronic products Services that Checking the Product returns Flexibility of pick-
fashionable goods using both and daily are valued progress of a up time
clothes. They online and offline household items for online to delivery
have less money channels and are online. They are offline
every month, so mostly interested in concerned with the
purchase and re- dining and food. products and
purchase services that are are generated for these three clusters. The lift values are all greater than
intentions are provided by both 2. Using these rules, all three groups prefer to buy daily household items
affected by offline and online
online and each cluster group also purchases specific types of goods
concessions and operators.
discounts. according to their preferences. Cluster 1 group buys beauty/health care,
Number in 531(32%) 567(34.3%) 559(323.7%) books, culture, fashion, shoes and accessories online. Cluster 2 group
sample buys 3C electronics, fashion apparel, food/drink and books/magazines
Gender Female- Female-dominated Male-dominated online. Cluster 3 group buys toys/games, 3C electronics, shoes, bags/
dominated
Age Under 25 years 26–35 years old 36 years and older
accessories and online paid entertainment online. All three groups use
old (inclusive) Taiwan Pay QR Codes for mobile payment at night markets for food and
Occupation Student In employment In employment snacks, such as hand-cranked beverage stores. Cluster 1 prefers to use
Monthly TWD 10,000 TWD 10,001 ~ TWD 20,001 or mobile payment for online game points payments. Cluster 2 prefers to
disposable (inclusive) 20,000 more
pay for clothing and bags using mobile payment. Cluster 3 uses mobile
income
Brands used JKO Pay LINE Pay Apple Pay payment to pay parking fees and for online paid entertainment and
for mobile medical expenses. The sources of information for mobile payment for all
payments three cluster groups comes from offline retailing operators’ recom­
Main types of Apparel and Food and clothing Traffic and gifts mendations, credit card issuers or banking systems. Mobile payment and
mobile accessories
purchases
online operators might cooperate with each other: PCHome Online and
Reasons to use Exclusive Convenient query of Digital payment Apple Pay could cooperate with online game operators, fashion busi­
mobile discount offers transaction records required nesses and medical institutions to provide cross products/service pack­
payments ages to promote mobile payment for online purchasing.
Amount of Under TWD 300 TWD 301 ~ 1000 TWD 301 ~ 1000
mobile
payment 4.2.3. Pattern 3: associations between mobile payment and online to offline
Mobile Mobile bill QR Code payment Near-field channels
payment payment communication In terms of mobile payment and online to offline purchases, for the
technologies Payment at different cluster groups and using a minimum antecedent support of 2%
used online/ physical stores
offline
and minimum rule confidence of 30%, fifteen meaningful association
Source of Mobile payments Credit card issuers Mobile payment rules are generated for the three clusters. The lift values are all greater
mobile used before recommendations service operators than 1. All three cluster groups prefer to buy fashionable clothes, daily
payment household items and food/drink using online to offline channels. In
information
terms of offline preferences, Cluster 1 group buys shoes, accessories,
Offline Fashion apparel Beauty and health 3C electronic
purchase products online game points and health care products and these products are
product delivered to a convenience store or a physical storefront. Cluster 2 group
types buys 3C electronics and daily household items online and picks up these
Reasons for Experience of Do homework Shop assistant products offline at a designated place or post office. Cluster 3 group buys
offline offline shopping beforehand service
purchase
3C electronics, gifts and food/drink and picks up these products offline
Reasons Physical Physical experience Good or bad service at home or at a post office. In terms of the process of online to offline, all
affecting experience three groups are affected by the service of the operators in terms of the
offline flexibility of pick-up times and a short delivery time. In addition to
purchase
delivery time and progress, Cluster 1 and Cluster 2 both value the
Online Fashion apparel Food/drink Daily household
purchase items integrity of the product. Cluster 2 and Cluster 3 also value the service for
product the return of products. In terms of mobile payment methods, the three
types groups mainly use a swipe card online and cash for the product delivery
Choice of Shopee online PChome online Yahoo online model. Cluster 3 will uses ATM transfers and mobile payment.
online
shopping
platform
Valued Quality and after- Ranking and
services sales service evaluation of

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S.-H. Liao and L.-L. Yang Journal of Retailing and Consumer Services 57 (2020) 102230

Table 2
Association between mobile payment and offline purchase (Cluster l).
Rule Lift Sup. Conf. Consequent Antecedent

Product types for offline Reasons to use mobile Brands of mobile Reasons for offline Reasons affecting offline
purchase payments payments purchase purchase

R1 3.38 2.19 33.33 Shoes/accessories Exclusive discount offers Apple Pay Demand for products Price/discount
R2 2.66 2.01 36.36 Fashion apparel Query of transaction JKO Pay Shopping to kill time Price/discount
records
R3 2.49 2.01 36.36 Daily household items More convenient LINE Pay Shopping to kill time Mood at that time
transactions
R4 2.10 2.74 33.33 Beauty/health care Lightweight without JKO Pay Experience of offline Physical experience
change shopping
R5 1.37 2.01 100.0 Food/drink More convenient JKO Pay Demand for products Quality of service
transactions

Fig. 3. Associations of mobile payment and offline purchase (Cluster 1).

5. Implications
5.1. Mobile payment and the offline channel business model
All three cluster groups prefer to purchase fashion apparel, daily
household items, beauty and health care and food/drink offline retail at
operators such as Carrefour and RT-MART in Taiwan. A large store must
pay for a large amount of manpower, water, electricity and land costs
and the increase in the popularity of online shopping in recent years
which means that the number of visitors has gradually declined. To
increase the consumer base using mobile payment and by cooperating
with mobile payment operators such as Line Pay and JKO Pay, offline
retail channels might also develop their own mobile payment system to
enhance brand loyalty. Carrefour in Taiwan launched Carrefour Wallet,
which includes stored value, payment, rebates and transactional history
queries. Online stored value and mobile payment are also used for re­
wards and bonuses on offline purchases. Products could also be instantly
reserved using mobile payment, and promotions or specific products
could be exclusive to the mobile payment interface, so consumers could
use mobile payment for reservations and payments, and would receive
offline purchase discounts for final pickup. This mobile payment and
offline channel business model would increase sales volume and in­
crease the number of consumers who order online and pick up offline.
This is a bridging a business model from multi to cross channels.
Fig. 4 shows that the reasons for product preferences for the three
cluster groups are the choice of products. “Prices and discount” and
“quality of service” are both key factors for the three groups in terms of
purchasing goods offline. The three groups all use “LINE Pay” and
“Apple Pay” for mobile payment and the reasons for using mobile pay­
ment are “more convenient transactions”, “lightweight/do not want to
carry cash” and “exclusive discount offers”. The behaviors of the three
groups in terms of offline purchases and reasons for using mobile pay­
ment show that prices and discounts affect purchase intention and the
use of mobile payment. Association rule 2 (R2) for cluster 2 is for con­
sumers who prefer to purchase beauty and health care products who are
affected by prices and discount offers and do homework beforehand.
They also use LINE Pay for mobile payment because of exclusive dis­
counts. This rule shows that mobile payment operators should cooperate

7
S.-H. Liao and L.-L. Yang
Fig. 4. Association map of mobile payment and offline channel business model.
with offline retail channel operators, such as Watsons, COSMED or
department store counters. Compared with traditional payment
methods, such as cash and credit cards, mobile payment is more
convenient. Retailers should expand the use of mobile payment and
drive consumption through the offline channel and this study finds that
offline stores or manufacturers should cooperate with mobile payment
operators using the offline channel and provide better prices and dis­
counts offers to consumers.
5.2. Mobile payment and the online channel business model
This study found that the three cluster groups shop online and are
affected by the discounts that are offered by online operators as free
shipping and price concessions. Al three groups use mobile payment at
8
Journal of Retailing and Consumer Services 57 (2020) 102230
night markets using QRCode as the mobile payment technology. Infor­
mation sources for mobile payment come from credit cards issuers and
bankers and mobile payment operators. Association rule 3 (R3) for
cluster one refers to consumers who prefer to purchase daily household
items online. They prefer that online operators give price concessions as
a special offer. Information about the use of mobile payment comes from
online social community and QRCode technology is used to make mobile
payments for online and offline channels. The online operator, PChome
and the mobile payment Pi wallet could cooperate using Shopee online
to organize activities for daily household items. Pi wallet (digital wallet)
could be used for buy one get one free or discount offers. Consumers
could also post events and products to social media such as FB and IG to
win prizes and promote the purchase events. This business model could
increase the number of mobile payment users and sales online and
S.-H. Liao and L.-L. Yang
change the business model from cross to omni-channels.
5.3. Mobile payment and the online to offline channel business model
This study found that association rule 1 (R1) for cluster three in­
dicates that consumers prefer to purchase 3C electronic goods online
and are affected by the service from retail operators that offer a desig­
nated delivery location/method service with swipe online payments. To
attract consumers through marketing activities, this study recommends
that online channel operators should simplify product information as a
chart or diagram with video or live streaming, to clarify the online to
offline purchase process for consumers. Online to offline operators
might also cooperate with physical stores/locations and logistics com­
panies to provide a total solution to consumers from online to offline
channels. UNIQLO in Taiwan promotes digital transformation, which
makes good use of online and offline big data analytics, records con­
sumer purchase behavior and predicts future behavior preferences, to
give a more accurate estimation of consumer demand for products and
services. This study also finds that mobile payment functions are
equivalent to membership cards and co-branded cards and can be used
by retailers to manage to manage members. The current cash payment
mechanism only identifies consumption data and not user data. There is
no way to obtain the age and sex of consumers. Using mobile payment
applications (Apps), membership data can be analyzed more compre­
hensively. Messages that promote consumer loyalty can also be sent
using the online to offline business model. Restaurants and food outlets
might allow reservations online and provide the final service offline so
the retailer can view inventory online and operate manufacturing and
logistics offline. Online to offline is a business model that allows retailers
to build on a transactional platform in an omni-channel business
environment.
6. Conclusion
The “Mobile Payment Survey” that was released by the Taiwan MIC
in 2018 shows that 90% of users commonly use only 1 to 3 types of
mobile payments (Taiwan MIC, 2019). However, many retail operators
in Taiwan’s mobile payment market have established barriers to entry.
There is a certain degree of expectation for the payment experience.
Whether it is the smoothness of operation, the ease of use of the inter­
face, large retail stores must have the corresponding IT resources to meet
user expectations. Omni-channel retail has become mainstream in Tai­
wan’s retail industry. Most retailers in Taiwan open stores on PChome
Online, Momo Online Mall and Yahoo Online and all have their own
official brand websites and mobile payment mechanisms, such as JKO
Pay, Line Pay and Apple Pay. Online to offline retailing will become the
future retail owner stream and retail operators will move from
cross-channel or multi-channel to omni-channel for the online to offline
business model. This study investigates a market survey using ques­
tionnaire (n ¼ 1176) to collect data on a snowflake schema database.
Data mining that uses a clustering analysis and association rules is
implemented to study mobile payment, offline, online and online to
offline consumer behaviors for different cluster groups. The role of
mobile payment is determined in terms of new retail payment mecha­
nism that promote a better consumer purchase experience in an online
to offline business environment. A good business model attracts con­
sumers but the right clientele with mobile payment and the evolution of
the channels could allow technology and business to achieve competi­
tive innovation and advantage in terms of mobile payment and retailing
channels for future online to offline business. Finally, from a reviewer’s
reminding, mobile payment is a hurdle for some consumers owing to
security/privacy concerns (Choi, 2020). These concerns should be to
investigate on the future studies in terms of mobile payment and
implementations on the retail channels.
9
Journal of Retailing and Consumer Services 57 (2020) 102230
Appendix A. Supplementary data
Supplementary data to this article can be found online at https://doi.
org/10.1016/j.jretconser.2020.102230.
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