It can be easy to forget — especially for people plugged into digital payments and commerce — that much of the world still revolves around analog processes. That holds especially true for service retail, where contractors and mechanics might still be more likely to quickly answer an actual phone call than respond to an email.
In other words, digital innovation has been slow to arrive in the service world, a point demonstrated by recent PYMNTS research in collaboration with AEVI, and a new PYMNTS interview with Nicky Koopman, SVP of content and value-added services at AEVI. She agreed with Karen Webster that when it comes to retail and payments innovations — and disruptions that are relatively common in the digital world — the services are, at best, pretty much laggards.
Indeed, to many service providers, “innovation” can seem like nothing more than a buzzword, Koopman said.
“They might not feel like it’s something that relates to them,” she noted.
Calls vs. Emails
Koopman was speaking not only from professional expertise, but personal experience borne of ongoing work at her house.
“If I send an email to the handyman, he will never get back to me. But if I call him, he’s right there, extremely responsive,” she said.
Of course, there are reasonable explanations for that.
Small- and medium-sized (SMBs) service providers are used to conducting business face-to-face instead of via online or mobile channels. And those businesses tend to be extremely local, meaning they can sometimes lack the motivation to upgrade digitally (to say nothing of the money and man-hours required to do so). Besides that, the explosion of web and payment service providers in recent years can leave even the most discerning SMB service provider bewildered — a deer frozen in the headlights, perhaps.
According to the Retail Innovation Readiness Index from PYMNTS and AEVI, such trends are part of the reason innovation tends to lag in the services area. Take, for example, health and beauty service merchants — big parts of nearly any local commerce scene, even in some of the smallest towns out there.
To build innovative experiences for their customers, health and beauty merchants are improving payment acceptance and creating new loyalty and digital receipt solutions. Unfortunately, putting innovation into action is easier said than done; only about 35 percent of health and beauty service merchants say they’re prepared for it. Health and beauty firms face many hurdles, including high costs, waning brand awareness and the struggle to find skilled talent.
That sector of retail services stands as a good, solid example of the challenges faced generally across this area of commerce when it comes to innovation. And while it’s easy to be empathic or sympathetic to those barriers, failing to innovate comes with potential negative benefits — which can go beyond the failure to properly scale digitally, or the potential failure to gain new customers via digital and mobile services and the most current payment methods.
After all, keeping a business operating via mostly manual processes eats up staff time that could be more profitably devoted to building sales, revenue and other value-added activities, Koopman told Webster.
Take a plumber, for instance — a person who will pretty much always have a job, no matter what. That said, an online booking system can help attract customers used to booking things online in any case. And a car mechanic who has a program that sends texts to customers when their vehicles are ready is likely to improve his or her customer stickiness, Koopman said.
The trick, she added, is getting the right online tool or tools to the right merchant.
“There are so many solutions out there — merchants need to be pointed in the right direction,” she explained.
Time stops for no person. That dire saying seems right in pretty much any situation. Perhaps a similar thing can be said about innovation, especially when applied to the world of SMB service providers — catch the wave or not, but innovation will keep moving, and so will consumers.