R2 Retail Reinvention 2015 is over, but the conversations about retail reinvention and innovation have just begun.
As the retail industry has learned, if you don’t continually reinvent yourselves, you’ll be left behind by consumers. And if you don’t attempt to innovate and adapt to industry trends, there will likely be another company who sneaks in and takes over the market.
While Day 1 of Retail Reinvention 2015 — aka R2 Summit — kicked off with MPD CEO Karen Webster and Marcus Lemonis, the host of CNBC’s “The Profit,” discussing how the retail, payment and commerce ecosystem is evolving with endless innovations, Day 2 was all about the evolution of the point of sale, how tech is influencing path to purchase, where social media fits into the retail mix, who the most disruptive players are and how mobile plays a role.
Day 2 continued the journey for the retail payment and commerce industry leaders who joined in to share in conversations about the current and future wave of disruption across the ecosystem. These conversations were designed to drive the conversation past the conventional wisdom and offer up more meaningful (and actionable) dialogue toward helping the retail industry reinvent itself.
Conversion At The POS
As a key theme at R2, the POS remained a major topic of conversation. And as was discussed, the point of sale has evolved into more than just a payment terminal. So who is best equipped to remove the virtual and physical point of sale in order to reduce cart abandonment and run smarter businesses?
The retailers who best understand the customer experience, the group concluded during the first panel of the day.
“If you don’t understand the disconnect [between customers and experience], the impact is huge,” said TJ Vytlacil, managing partner at Brigade Society POS. He also noted that even with technology innovation, the personal consumer touch is essential to keeping any customer relationship.
But it’s not as easy as it sounds.
“Consumers want a better experience, and retailers are under siege to change,” commented Gillian Wee, Square’s fashion and retail lead for enterprise partnership. “I don’t think it’s as simple looking at one factor or another.”
One big question came out of this panel: Is POS driving the reinvention of retail or is reinvention of retail forcing a change to the POS environment? The answer? It could be a little of both. But what was concluded is that merchants are not ready to adapt — particularly to EMV.
“I think it’s going to be a journey. I think that that’s part of the story. It’s going to take a while. We as a company think NFC is the way to go. EMV takes a long time. NFC is the most secure so far,” Wee said.
The group concluded that the problem at the POS as it relates to EMV adoption is that most consumers aren’t seeing the cost-benefit analysis. EMV payments take longer, and while they add another security layer, they also could create something retailers attempt to avoid: consumer friction.
“I really believe when people start using EMV, waiting is going to make people impatient,” said Eric Rosenzweig, CIO for Garden Fresh Restaurants.
While EMV isn’t really that different than traditional MagStripe cards in terms of customer experience (other than being a dip instead of a swipe), getting customers to accept that change is an entirely different story, said Michael Fancher, director of IT for David Burke Group. In October, when the EMV liability shift hits, it will be about implementing it with merchants in a multi-step process.
Consumer Path To Purchase
The consumer path to purchase has plenty of points along the journey for that purchase intent to be derailed. And that’s the million-dollar retail question every merchant is trying to discover.
When on the purchasing journey, Mark Hoffman — director of rewards marketing for Discover — said the consumer is already making a multitude of choices about how they want to pay. That means balancing everything from which rewards to apply to how it factors into their budget.
“I think that they are overwhelmed at times with the decisions they have to make,” Hoffman said. “They are looking for stripped-down solutions.”
As Roy Erez, CEO of Loop Commerce, phrased it: “There is no one path to purchase.” In fact, he commented: “The path to purchase doesn’t always lead to purchase … [It’s] also about what happens afterward.”
The consumer journey, the group concluded, is all about removing friction and being connected with the consumer from before the shopping journey begins to long after it’s over. After all, to increase customer retention, retailers have realized the need to add value by creating brand loyalty and differentiating themselves in the busy world of commerce and eCommerce offerings.
“You have to have ease. Ease is the ticket to play,” said Stephanie Farsht, senior group manager of innovation and strategy at Target Corporation.
The Big Announcement Of The Day: Apple Pay Adoption
In March, survey data indicated that 15.1 percent of eligible Apple Pay users had tried the service; when surveyed in June 2015, that number had fallen to 13.1 percent. Usage fell as well. When asked in March, “Did you use Apple Pay on this transaction?” 39.3 percent of consumers said yes. When asked the same question in June, only 23 percent replied in the affirmative.
Apple Pay also seems to have seen a dip in its committed users. When users were asked in March how often they used Apple Pay, 48 percent replied whenever they could. When surveyed again in June, that figure had dropped off precipitously to 33 percent.
While all the right numbers were going down, the most recent InfoScout reports also indicate an increase in the number of users who didn’t use Apple Pay because they just plain forgot, from 32 percent to 34 percent. That increase also throws some shade on a positive increase in the numbers that indicated the number of consumers who use Apple Pay “whenever they remember” has jumped from 34 percent to 42 percent.
Other unfortunate increases were in the number of consumers who were abstaining from Apple Pay entirely because they were concerned about security; that figure increased from 15 percent to 19 percent. Also on the rise were the number of users who were reluctant to try it again due to fears about it working — up to 4 percent from 1 percent.
Also, surprisingly on the rise were the number of consumers abstaining from Apple Pay because they just aren’t sure how it works — now at 34 percent, up from 31 percent in March.
[To read the full results from the Apple Pay adoption survey, click here.]