It’s been another busy week in payments and commerce, as summer winds down and the world gears up for an autumn where nothing seems certain except the presence of pumpkin spice at Starbucks (and everywhere else). Sandra Blair, executive vice president of MerchantE, joined Karen Webster in our latest edition of This Week in Payments to discuss the week’s big news, from some high-profile Amazon launches to the Salesforce ecosystem’s real power.
“I think everyone in payments and commerce is now thinking about how to be even smarter and more predictive with their business, because the truth is, none of us know what the new normal will end up being a year from now,” Blair said.
Here’s what they discussed:
Amazon’s Exciting Week
Amazon had two launches this week that captured big attention. The eCommerce giant opened its first brick-and-mortar Amazon Fresh grocery store, and it also launched Amazon Halo, a fitness wearable designed to take on the Apple Watch.
Blair said the launch of Amazon Halo represents a move into a market that Apple has heretofore dominated. She said the Halo offers consumers a slimmer, sleeker alternative to the Apple Watch, but all of the high-tech functionality around health monitoring (heart rate, exercise level, body-fat levels, etc.)
Blair added that the Halo doesn’t have the large screen or uncomfortable bulk that Apple Watch wearers occasionally complain about. And Halo’s $65 price point will make it a competitive alternative to its roughly $390 Apple rival.
“For people who don’t believe everything has to be Apple, [the Halo] is competitive – especially at that price point,” Blair said. “And I do think that Amazon Prime members are pretty loyal to Amazon.”
She added that “there's certainly [also] a play there for commerce,” as Amazon has partnered with WW (formerly Weight Watchers) and other companies to provide the Halo with functionality.
Meanwhile, Blair said that Amazon’s big launch this week of the first Amazon Fresh physical grocery store is also interesting – particularly given the integration of smart shopping carts. Amazon’s new Dash Carts will keep track of what items consumers pick up off of the shelves and allow them to automatically pay without dealing with a cashier or self-service kiosk.
Blair said the Dash Carts’ use at the first Amazon Fresh store, which is opening in Los Angeles, brings to fruition a long-discussed possibility for supermarkets.
“I don't remember when we first started talking about self-checkout in grocery stores, but that was a long time ago,” she said. “It’s great to see that this situation is accelerating some of those technologies that we all thought would have taken off a long time ago.”
That’s a phenomenon that reaches further than the consumer-facing purchase experience, Blair noted. It’s increasingly appearing in the B2B payments space and the world of supply chain management as well.
Re-Centering the B2B Ecosystem
While the chronically paper-based world of B2B payments gets a lot of attention, Webster and Blair noted that the problem involves a much bigger systemic issue. They agreed that the supply chain’s complexity makes digitization a requirement, but that such technology is still lacking across the board.
“It is incredibly difficult and complex for any part of the B2B ecosystem to source supplies, figure out pricing, compare inventory levels [or] figure out what to do with their excess inventory,” Blair said. “There have been those who tried to solve it by having closed networks, but now that everybody's trying to figure out how to do this digitally and not in person, companies don’t want to be part of 20 closed networks. We almost need a new social [media] like a Facebook or LinkedIn for the supply chain to get those conversations and those negotiations happening.”
She said a better B2B digital platform could blend automated technical and personal interactions, such that transactions would become transparent and easier to access and understand from end to end.
But how can the industry build such a network? Blair said that’s the trillion-dollar question that no one has figured out how to answer yet. But she noted that all businesses – even those that serve consumers on the front end – are looking for solutions on the back end. Given the market need for such a solution, Blair believes that technologies “will evolve pretty quickly to fit some of those demands.”
The Rise of the SPAC
Blair said she had never heard of a “special purchase acquisition company” (or “SPAC”) at this time last year, but they are now “coming out of the woodwork” extremely quickly.
SPACs are shell companies that go public to raise money, then use the funds to buy promising privately held firms. They’re basically vehicles that allow private companies to go public without the hassles of traditional initial public offerings (IPOs).
Blair said the system makes a lot of sense and could have potential for FinTechs. After all, SPACs’ organizers are experts in the complexities, regulation and compliance issues surrounding going public. By contrast, FinTech executives tend to be experts in whatever innovations they’re attempting to build.
Moreover, she said SPACs can take multiple innovations and build them into a whole that’s greater than the sum of its parts.
“A SPAC can start with a supply chain company and then bring a payments company along, and together they can leverage each other's systems and capabilities,” Blair said. “I think it'd be interesting if somebody did that.”
She said it would also be beneficial to the ecosystem if such a move allowed robust solutions to get to market faster. In fact, Blair believes that the industry’s future will increasingly involve an integrative function as opposed to walled-off ecosystems.
Salesforce and the Power of Playing Well With Others
Salesforce has demonstrated the ability to build such a large and powerful ecosystem, and word emerged this week that the company’s successes are propelling it into the Dow Jones Industrial Average.
MerchantE is a Salesforce customer and leverages an awful lot of the company’s services, Blair noted. She said that Salesforce’s robust set of features has helped the company grow from just a customer relationship management platform to an all-inclusive toolbox for anyone who does digital selling.
But equally important to Salesforce’s success is that the company’s products allow users to customize their systems with whatever software tools that clients see fit to add.
“They have created this service where you don't really have to go outside of Salesforce to do a lot of commerce, but they haven't prevented you from integrating with other solutions as well,” Blair said. “To me, that is the right balance.”
She added that Salesforce has learned that the best way to serve clients and retain them over time isn’t to insist on providing 100 percent of the services 100 percent of the time. Instead, smart companies give clients the choice to use what they want and need at their own discretion.
Blair added that Salesforce has “also benefited from the strange times we find ourselves in. But I think the lesson about robust flexibility will pull forward beyond the current moment.”