As consumers demand greater access to information, offers and payment functionality — anytime, anywhere, through any type of device — the lines between in-store commerce, e-Commerce and mobile commerce are blurring. The payments ecosystem continues to undergo a rapid transformation and, in response, retailers need to clearly understand how to reach increasingly tech savvy customers to stay competitive and have success.
Retailers must understand how consumers shop: they constantly are seeking smart, integrated and personalized shopping experiences across all channels, and thereby setting the stage for increased use of smart devices.
A prime example can be seen in a recent Deloitte study, which shows that while smart phones currently influence 5.1%t of annual retail store sales translating into $159 billion in forecasted sales for 2012, the trend will continue to grow to represent 19% of total store sales by 2016¹.
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Forward-looking merchants already recognize that embracing their own smart devices, such as point-of-sale (POS) terminals that read contactless payments and barcodes, mobile POS, kiosks, and table-based catalogs, help create a consistent experience for consumers and impact the way they make purchases any time, any place. Now is the time for all retailers to capture the power of smart devices by fully understanding how to best incorporate them into their business and knowing what implications smart devices have on traditional commerce.
Be POS Smart
When developing an effective POS strategy, retailers need to be able to address the full spectrum of payments options and unique customer needs. The good news is that updating POS equipment is easier than most retailers think. An upgrade can mean greater flexibility in accepting payments and being ready for payments innovations. This includes the ability to accept chip-based payments, like those that follow the EMV data security standard, as well as contactless and mobile payments. New consumer-facing devices, like the FD35 PIN Pad, are not only changing how payments are accepted and lowering infrastructure costs, they also are decreasing customer wait times and making transaction processing more reliable and secure.
At the same time, shopping at brick-and-mortar stores is no longer the primary way customers learn about and buy products. A recent Motorola Solutions survey shows that 75 percent of U.S. retailers believe developing a “more engaging in-store customer experience” will be critical, while more than 40 percent plan to provide personalized product details to customers’ smartphones based on their prior browsing or purchasing behavior². Social networks and mobile apps provide a perfect platform for merchants to present highly targeted products and promotions directly to the customers, creating new channels and outlets to influence purchasing decisions beyond traditional advertisements and offers.
Retailers can simplify their time investment and maximize their operational efficiencies by identifying a payments partner who can provide a one-stop resource for a full range of products, including POS hardware and software, as well as integrated eCommerce and mobile commerce solutions. Retailers small and large can capitalize further on this opportunity by selecting a payments partner that understands what is important to its retail clients and their customers to ensure a commitment to top objectives such as providing the desired customer experience and maintaining a retailer’s brand promise across all touch points. For example, having a capable one-stop shop partner can provide a retailer with the necessary capabilities to effectively optimize an e-Commerce solution to deliver consistent service for card-not-present (CNP) transactions.
Be Consumer Smart
Smart devices increasingly provide retailers with more tools that assist them in directly reaching their customers. Retailers have new and exciting options such as virtual wallets and electronic promotions to act on, providing new capabilities to ensure a synchronized loyalty and payment strategy. While traditional loyalty program methods typically involved paper-based coupons and a multitude of loyalty cards, advanced loyalty programs provide merchants with new benefits such as the ability to create integrated offers environments that collect detailed information about customers’ shopping behavior.
Beyond creating new payment strategies, smart devices also provide enhanced ways to utilize traditional payments. Merchants can now have their own prepaid mobile app and customers can pay based on QR codes tied to existing payment accounts. Payment options are growing from traditional payment at the register to systems that facilitate payment in the cloud.
Making Smart Devices Work for Your Business
Traditional commerce is changing and growing at a rapid pace across all points of business. Smart devices continue to become a larger part of how customers function, and retailers need to understand how they are impacting consumer decision-making process and what programs and tools will be most effective in creating an integrated offers environment for their business.
While smart devices provide many channels and locations for customers to shop, retailers should ensure customers are enjoying a positive, consistent experience across each outlet. The navigation and appearance of mobile and online experiences should follow a similar structure as customers can find in store. Similarly, pricing, loyalty programs, discounts and all other policies should be as consistent as possible across all channels. The appeal of using smart devices should be that a customer knows exactly what they are getting, no matter how they receive the information and product.
Another important retail strategy is to capitalize on the anytime, anywhere ability smart devices have to reach customers with timely and relevant communication. Smart devices have helped streamline loyalty programs by capturing customer purchasing behavior. Using this information, merchants can send specific communications to a target channel based on exactly what a customer is looking for.
In order to keep business flowing and customers happy with every experience provided by the merchant, smart devices are a key tool in every business model. Understanding the changes in traditional commerce and carefully implementing strategies around the use of smart devices will help merchants achieve Universal Commerce and keep a robust and satisfied customer base.
1. “The Mobile Influence Factor in Retail Sales,” Deloitte 2012
2. “Future of Retail Study,” Motorola Solutions 2012
Bruce Dragt is senior vice president of Payment Acceptance at First Data Corporation and is responsible for driving product development globally across the company’s suite of merchant products. These products include core acquiring, e-Commerce, International Currency Solutions, Leasing, TASQ, TeleCheck and security products.
