A new research paper on the future of mobile commerce, published by Strategy Analytics, reveals that 67% of smartphone owners use their phones to find deals and compare prices. But the actual point of purchase is the least popular activity on all mobile devices. Mobile clearly can’t be ignored as a channel to attract and interact with customers, but what should retailers be doing about mobile payments?
Many retailers are wrestling with the challenges set by increasingly mobile customers. But “mobile” itself may be a bit of a red herring. “Mobile” shoppers will most likely fall into one of three camps:
1. at home
2. in store
3. out and about
And that’s the key: creating a mobile strategy that meets the needs of customers at a particular time and place – putting things into context.
There’s a general trend among people browsing at home, away from desktop computers and towards tablets. It’s easy to understand why, as tablets are both more convenient and more engaging than PCs, while having bigger screens than smartphones.
But once these “Downton Abbey shoppers” leave the house, they’re more likely to resort to a mobile phone. It’ll be this device that your customers carry into your store – and that changes the dynamic.
It’s all about identifying opportunities to add value and improve the experience at each stage.
Put yourself in your customers’ shoes. Why are they using a smartphone? While they’re out and about they’ll expect quick and easy access to information about your nearest store and available stock. In the store they might benefit from store layout help, easy access to further product information or current offers – through things such as QR codes, which make jumping off to sites easier and quicker on a mobile.
Of course, retail is all about securing the sale. But one thing that came through loud and clear at NRF this year was the fact that new payments technologies have to make the consumer’s life simpler and easier. So, while there’s a lot of noise about mobile payments, technologies such as NFC – one of the main contenders for linking mobile phones and payments – aren’t necessarily putting the interests of the customer first.
However they choose to pay, customers want a frictionless process wherever they are – and that’s one of the stumbling blocks with mobile at the moment.
The fact is, retailers can take money quite easily in-store just now. NFC for payments in store is not a problem that needs to be solved. That doesn’t mean NFC has no role to play in store, but its strength may lie elsewhere, for example, as a way to provide easy access to information and offers through in-store contact points.
Big budget production
So how do you solve the problem of mobile payments? There were three main approaches put forward at NRF:
1. The ‘wallet in the cloud’ – led by PayPal and Google
2. The mobile device – championed by NFC technology suppliers
3. Direct transfer exchanges – run by retailers fed up paying the middle men
Strategy Analytics’ research into NFC reveals: “The ramp up is extremely slow and even years from now we are expecting only a minority of consumers will use mobile payments; 158M users, or 2.9% of total cellular users in 2017.”
If we once again put ourselves in the shoes of the consumer and ask what’s best for them, the wallet in the cloud seems to be the most convenient. It promises a frictionless payment experience regardless of channel, and customers can bundle loyalty cards and e-vouchers. But this still doesn’t help with the here and now.
There’s no future proof answer to mobile payments as the dance between the different technologies and approaches plays out. But what is clear from these latest findings is that it’s vital that you take mobile seriously and build a solid foundation for your mobile channel.
Just now, that means ensuring your mobile channels provide a brand experience consistent with your other channels. And creating a mobile friendly site that’s designed to meet the needs of mobile users – so that it works on a smaller screen, with the most appropriate information brought to the fore and easy to access (through bigger buttons and simpler buying steps).
Like most other aspects of retail, it’s all about having the right things in the right place, at the right time.
Posted by Jason Shorrock, Product Director, BT Expedite
OK, let me get a confession out of the way. This blog isn’t very glamorous. It’s not going to set the world on fire in terms of innovation. It’s not going to dazzle you with new, shiny toys. It’s perhaps even the dullest topic I could have chosen to blog about after my recent trip to NRF. But it may also spark a revolution…
With a prime spot at the biggest retail showcase in the world, astoundingly some exhibitors were presenting the mundane and unattractive. In a sea of glamorous assistants, the latest innovations and multi-million pound stands, were these people super-brave or super-crazy?
For those that noticed this trend, you can say: “I was there when the revolution started.” For those who let it slip by unnoticed or didn’t make the trip across the pond, I’m prepared to let you in on the secret. Amongst all the glitz and glamour there was a tribe of at least five or six brave suppliers, big and small, all demonstrating the latest ‘innovations’ in cash management.
I’m not entirely sure if it is being led by the growth of mobile in the store, a need to make the store as efficient as possible or loss prevention improvements but a cash management revolution is coming. Automation is the name of the game – automated cash counter devices are in, in a big way.
What these devices do is take money in (and it can be directly from the customer), automatically count and issue the appropriate change and then perform all your cash management for you – so no cash lifts, no banking, no z or x reads – your new cash management friend will automatically prepare the money ready to be taken direct to the bank. No one in your store will ever have to touch cash again. All those complex processes, all those Loss Prevention worries, all the time it takes your store staff – all taken out of the equation by a machine.
For the retailer it becomes an interesting thought – as you are not touching the money, you could get agreement with your bank that when the money is in the device it’s as good as banked therefore you could start earning interest on it at that point?
That’s not all; these devices also help you with your mobile POS processes. Anyone who has a mobile POS in their store will soon realise that the first time someone wants to pay cash, you have a problem. What do you do with the cash? Do you have to take the customer to the till, bypassing your fancy new iPad in the process? Are you resorting to a bum-bag?
Many of the devices on show could help solve that challenge. When a customer wants to pay cash, you walk them to the cash device, conveniently situated within the store, pay the money in and are given the correct change.
There’s nothing new here; we’ve seen these cash management devices hang around the fringes of the mainstream for some time now but my feel from NRF is that 2013 and the changes enforced by mobile technology mean this could well be their moment.
The downside is that, in the main, these devices are big and deeply unattractive. If you had one in your store you’d be so ashamed of it that you’d want to hide it as far away from customers as possible. It would immediately distract from anything your visual merchandisers could do to make the rest of the store look uber-cool. To be truly adopted, these machines will need a makeover to become slick and sharp, matching the new mobile technology that’s being installed along the high street.
Maybe in a year’s time we’ll look back and laugh at the prospect but devices that take the pain out of potentially the most complex in-store process, eliminate store loss and enhance the Assisted Service capability can only be a good thing.
Thank you for your patience while I got that out of my system. I promise, the next time I blog we’ll be discussing something far more exciting – maybe receipt paper, innovation in scanner technology or the latest PCI policies. I bet you can’t wait.
Posted by Mark Denton, Head of Solution Consulting, BT Expedite
It’s a tough time for traditional retailers – as the number of prominent casualties on the UK high street in recent weeks testifies. However, the National Retail Federation conference in New York the other week showed how retailers could fight back using a combination of design, innovation and showmanship.
It’s very apparent that online retailers are out-innovating the conventional high street. Companies like Amazon, eBay and Apple are setting the benchmark for both price and service – with 78 per cent of customers expecting the same level of online service from older brands as new online players, according to the Autonomous Customer research about to be published by BT. The same survey also tells us that convenience is more important than price for 1 in 3 customers.
For traditional brands to survive, they need to be as, if not more, innovative using the one advantage that they have over online – their physical presence.
Blending online and offline channels is an obvious one, to start with. A simple example of this is ‘click and collect’, which is proving a big winner with customers – all the convenience of shopping online but without all that parcel paranoia that comes with home delivery. But this notion hasn’t bypassed online retailers, with Amazon establishing handy high street collection points for customers who want to pick stuff up.
Physical advantage can still be gained by remembering that retail is, to a certain extent, show business. Brands such as Build-A-Bear create fabulous experiences that can only be had in-store. Build-A-Bear encourages online customers to visit a store where, with the help of a Bear Builder, they can lovingly stuff, fluff, dress and register the birth of the creature. And when the customer leaves the physical store, their bear gets its own unique avatar in Build-A-Bear’s online world, BearVille.
Even self-service is getting in on the experience design trick – with Costa developing a vending machine that not only delivers a decent cuppa but emanates the subtle smell and sounds of a coffee shop to draw you in. A simple and intuitive HD display takes you through a seemingly infinite number of caffeine and flavour combinations, before delivering a delicious steaming cup at the end. This is a clever combination of good design and technology – and would suit the office or the high street equally, without the need for a physical store.
Games technologies are especially strong on experience design too – so it wasn’t a surprise to see Microsoft apply Kinect’s gesture-based interaction to trying on a new wardrobe. Their motion tracking system enables the customer to swish around in that red dress or match it with the ideal bag or scarf without the need to disrobe in the changing room.
However, having created the ultimate shopping experience, it is so easy to fail at the basics – with queuing at the checkout one of the main things customers would like to see eliminated in the future. Aside from technologies like Square, which turns an iPad into a swipe machine that can be used by any wandering customer service person on the shop floor, the possibility of self scan, linked to payment methods on a smart phone, is becoming a reality. I can simply scan, pay and walk out of the store with my proof of purchase on my phone and a receipt sitting in my inbox.
So for the high street to survive, it may be a case of going back to good, basic and innovative design that plays to its physical strengths as well embracing the online world!
Posted by Dr Nicola Millard, BT Futurologist
It’s in New York and it’s billed as Retail’s Big Show, so I didn’t need to be asked twice! And along with more than 27,000 other delegates at the 102nd National Retail Federation conference, we helped to make Retail’s Big Show the biggest ever.
Because we get caught up in the day-to-day so much at home, getting away to NRF is a great opportunity to have a look around and gauge what’s happening now – and what’s coming in the near future. With such a large event, it’s impossible to see everything, but there were some things that really caught my eye:
One curious feature of the event was that omni-channel was everywhere – and no-one mentioned it. It seems that it’s now a given that we’re all working in an omni-channel world. The recent Christmas results, building on a record-breaking ‘Mega Monday’ showed quite a stark two-speed market – split by those who offer a credible omni-channel offer and those that don’t. (Of course, there are always exceptions to this rule and Primark are a shining example!)
But we wouldn’t be retail technology geeks if we didn’t conjure up a few new buzzwords. This year it was all about ‘frictionless transaction’ and ‘reduced effort’ (explained by BT’s futurologist, Nicola Millard as covering emotional, physical and intellectual effort as well as the time it takes to complete a shopping journey for the consumer).
Your future journey starts here
The eBay stand had the best demonstration of what this might look like – with stories to illustrate an effortless shopping journey across mobile, store, web and TV, all wrapped by a completely frictionless e-wallet managing loyalty, e-vouchers, gift cards and traditional cards and bank accounts.
Combining what’s here now with what’s coming soon, the demo incorporated geo-location/geo-fencing (as I walk past the mall), personal location-based vouchers (in the mall), clienteling to provide better assisted selling (in the store), seamless anywhere, everywhere stock availability, context-relevant recommendations (on my mobile) and a smart e-wallet to ensure I clock up loyalty points when I pay. We’ll definitely be working on something like this with eBay/PayPal to bring it to our customers as soon as it’s available in the UK.
E-wallets: taking the pain out of payments
There was a lot of debate in the breakouts about e-wallets and the future of payments – with card providers, banks, payment service providers and retailers all proposing very different approaches.
As using cards is fairly frictionless already, my view is that the e-wallet has to add value for the customer if it’s to challenge the current card process. That means it needs to work across all channels and bring payment, loyalty, vouchers and gift cards together in one place – rather than the current jumble of bank cards, gift cards, loyalty cards and vouchers.
But the debate about whether an e-wallet is best delivered through NFC (via a mobile) or the cloud (available across all channels) is set to rage for some time yet, while retailers sniff out ways to bypass intermediary service providers and reduce costs.
If you go down to 5th Avenue today
On our last day in NYC, we visited the Build-A-Bear Workshop flagship store on Fifth Avenue. We were officially there on business, although one or two (who’ll remain nameless) couldn’t resist trying out the full build-a-bear experience (aimed primarily at the 4-14 age group).
Build-A-Bear has just sold its 100 millionth bear – and shows no sign of slowing down. During the tour, the store manager gave us a glimpse of the company’s ‘store of the future’ which has been trialled in a number of sites with impressive results.
The technology they are introducing includes virtual fitting rooms, Microsoft surfaces for 3D interaction, Epicor advanced CRM to build ongoing relationships with customers and a seamless blending of the real and virtual worlds.
Customer feedback was that the children loved the virtual and digital interaction and often preferred it to the ‘old hat’ physical world – a scary example of the next generation absorbing new technology as soon as it appears.
All in all it was a really invigorating event. We had the chance to spend some quality time with our customers away from the pressures of the day-to-day environment; we caught up with Epicor, our software partner; we tapped into some of the latest trends and thinking; and we rounded things off with a glimpse of what’s coming next from our BT technology scout and futurologists. Oh, and the office has a new bear.
Posted by Jason Shorrock, Product Director, BT Expedite
New York’s National Retail Federation (NRF) 2012 conference theme was Retail’s New Rules, and it focused on how retailers and innovators are reshaping the conventional rules of the game.
My favourite town, my favourite show. New York’s National Retail Federation (NRF) 2012 conference theme was Retail’s New Rules, and it focused on how retailers and innovators are reshaping the conventional rules of the game.
It was bigger, better and busier than ever, with 400 exhibitors and over 25,000 attendees from 78 countries. And Bill Clinton headlining! And, for me, this year’s big ideas were:
Epicor’s booth showed that consumer devices reign supreme: Business Intelligence (BI) portals, assisted service, clienteling – all served up on shiny tablet devices. Equally exciting, was acceptance that customer engagement rules are changing and in response to this, our newly launched Clienteling app attracted lots of attention around the show.
At the conference, I asked US retailers for their views on the subject of centrally hosted versus distributed POS systems. In previous years, US retailers have shown little interest in this deployment model, in stark contrast to their UK counterparts.
But this year there was a definite shift in attitude; among the IT attendees, the key words were resilience, virtualisation and security. And their Business and Marketing colleague’s phrases like ‘customer experience’ and ‘cross-channel’ – or the new buzz phrase at the show – ‘omni-commerce’.
Overlaid on top of the cloud, security and PCI were also major themes. Network vendors promising the ‘elixir to PCI’ were around every corner; secure networks, secure wi-fi, secure platforms.
Clicks and mortar
A different perspective on Payment was provided by PayPal, whose booth was drawing in the crowds with their cross-channel vision and inexorable push into ‘bricks and mortar’. It’s part of a process that’s moving payment from the wallet to the smartphone, with personalised pricing and promotions, while consumers shop. PayPal’s new strapline ‘Now the Best in Both Worlds’ shows Great vision in a fast moving area. Watch this space!
My summary of this year’s show: Bigger than ever, lots of optimism. Technology is where it’s at. Not just technology to meet the fast moving shopping habits of consumers, but technology that supports global reach, because that’s where the growth is. By the end of the show I was exhausted but more enthused about the future of retail and the systems that underpin it than previous years. Roll on 2012.
Steve Thomas, CTO, BT Expedite