“Imagine a world where…”
This is a phrase I use often when thinking about ways to improve customer experience. Of course, that phrase generally gets an eye roll from my team, as they know the words that follow will challenge their current way of thinking.
To both the benefit and challenge of retailers, the payments landscape changes rapidly and new payment forms emerge constantly. Some of these emerging payments options are leveraging the rails of the big issuers while others are trying disrupt them. But for any payment option to fit into the omnichannel experience and extend retailer experiences to satisfy consumer shopping preferences, it must have hooks into mobile, online, in-store and social platforms. Apple Pay, for instance, can be used in-store, online or via mobile device, and its ability to deliver a consistent cross-channel experience is one of the big reasons it continues to gain momentum.
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As the payments landscape continues to evolve, several key criteria for success have emerged. The first is the ability to enhance the customer experience by removing the friction of making a payment in the virtual world while also accepting a mobile-based payment at the point of sale. In addition, the privacy and security of these payment methods is always top of mind for the consumer and the retailer.
But does removing friction from the checkout potentially compromise the safety of a consumer’s data? The real security challenge comes in balancing those competing elements in a way that preserves a low-friction customer experience, as the difficulties are heightened by disparities between mobile and online channel dynamics.
For years, tokenization technology has been leveraged to reduce the risk of illegally compromising card numbers stored on e-Commerce platforms. By and large, tokenization has proven to be a solid tool, but it still doesn’t cover the risk posed by single-purchase customers that never store their card numbers securely in a retailer’s payments ecosystem. In those cases, retailers must engage a service provider of single-use tokens to minimize the anxiety that retailers have surrounding the security of their customer data. But this presents yet another extra step and expense for retailers.
The primary benefit of a seamless omnichannel experience is the ability to use a common customer database for all channels of business. This enables retailers to blend data from a customer’s purchasing habits in-store and online in a combined manner to enhance the shopping experience regardless of channel.
For example, I take advantage of Nordstrom’s omnichannel experience often. I can browse items on my desktop and place them in my shopping cart, get reminded that I have unpurchased items via email, then use my smartphone to complete the purchase using my Nordstrom app while telling them I want to pick up my purchase at the nearest store.
In a feature that increases convenience, I can even text them when I’m around the corner and have them meet me at the curbside for pickup. My identity on the purchase is validated through the phone number associated with my profile. This experience would not be possible without a converged channel offering that leverages a common customer database. That’s something that no customers see and few comprehend, but it is a key differentiator and driver of an omnichannel experience.
The converged channel experience also empowers retailers to compare my browsing and spending habits against other shoppers’ habits to predictively suggest items that may be of interest to me. This feature is not new — Amazon has been a pioneer in the realm of suggestive recommendations — but connecting it to every channel of commerce seamlessly becomes the tipping point. So imagine if you are in Colorado on a ski trip, or in Hawaii at the beach, and your current location is connected to your past shopping habits to provide you with a tailored recommendation of what you might need in a way that that results in a sale. The result: increased revenue and customer retention.
Bottom line: leveraging a common customer base across channels to make predictive recommendations is becoming table stakes for retailers looking to stay competitive.
Synchronizing customer channels to leverage a common payments backbone provides retailers with a 360-degree view of their revenue activity and reporting. This view can be used to target refinement to each channel, eventually driving more revenue and maximizing the performance and value of the channel. Drilling down deeper into the reporting can help marketing departments refine promotions through a more direct lens into the customer journey as they travel through respective channels. These reports should reveal trends about where the future of your channels are heading and enable you to adjust and coordinate both your marketing and sales strategies to optimize ROI.
Tracy Metzger has amassed more than 20 years of experience in the payments industry. As chief operating officer at Vesta Corporation, he directs operational improvements across Vesta’s global technology, product management, service delivery, payments and account management functions.
