How to get consensus on commerce? Interaction and insight on innovation? Gather some of the biggest and smallest merchants, solution providers and tech giants in one room and let the conversation flow, onstage and off, with unfettered access to dialogue — and no small measure of food and drink.
During the PYMNTS inaugural National Merchant Day, industry stakeholders converged in New York City to muse about the past and map out the future as Main Street goes increasingly digital. No seismic change occurs without bumps and turbulence, and that was clearly on the minds of presenters, both solo and during fireside chats with PYMNTS’ Karen Webster, as they discussed broader themes.
A Tale Of Two Retail Experiences
Dickensian futures may loom for retailers lingering solely in the shadows of bricks and mortar. In remarks by Glenn Fodor, senior vice president of competitive intelligence at First Data Corp., the current landscape is proving to offer the best of times and the worst of times for retail amid technology’s advances, to paraphrase a line from the English author. Fodor noted that retailers are enduring shuttering hundreds of stores, and some marquee names have filed for bankruptcy. Specialty retail IPOs have been left on the shelves, to the tune of “a couple of years,” only to be canceled, as the executive noted.
But the opportunities are there to embrace challenges coming from mobile and eCommerce — and technology in general. The outlook is promising for retailers, said the executive, as the economy is doing well, and global corporate earnings are on the upswing. “Consumer confidence is at almost record highs,” he continued — setting the stage for strength.
Against that backdrop, he said, retailers can benefit from the miniaturization or, put another way, “democratization of technology.” Technology has fostered the integration of several functions in commerce at the point of sale, with hardware and software no longer prohibitively expensive for smaller businesses, said Fodor. Along with technology’s evolution, he said, retailers gain insight into the changes tied to how consumers shop, search, find and pay for what they want, with the advantage of constant feedback.
“As a merchant, you are onstage every single day,” said Fodor, especially with social media able to rate companies and their experiences with those companies with speed and frequency. In addition, Amazon, as it has so often, looms as a huge competitive threat, with its heavy presence in eCommerce and across any number of channels in the retail experience. But, added Fodor, there is reason to step back and mull the possibility of partnering with Amazon, via fulfillment ventures or other avenues. Retailers can enjoy the rewards of expanding the size and scope of their operations or branching into new business lines — by way of example, department stores buying restaurants or Amazon finding berth in (tangible) bookstores.
Past As Retail Prologue, From Blockbuster (RIP) To (Digital) Blockbusters
Those who do not study the past are doomed to repeat it — and possibly go bankrupt. Might retail’s future be written on the brick-and-mortar wall?
Stephane Wyper, senior vice president of Internet of Things partnerships at Mastercard, said it’s worth it for retailers and merchants to take a step back (in time) to see how consumers make the leap into using technology as part of their shopping experiences.
Casting back into the murky depths of decades past, Wyper offered Blockbuster as a prime example of technology’s march. In this case, a consumer walking into a Blockbuster store would browse for what he or she wanted in, of course, a tactile and tangible way. That experience, said Wyper, transitioned to Netflix, where the original model was one of “how do I replicate the discovery model” of Blockbuster but in a digital environment? This included a dedicated space to browsing the same DVDs as might be seen on store shelves and ordering them online (eventually receiving and returning physical rentals, though the model has now transitioned to streaming).
From there, said Wyper, in general, replicating the in-store experience in an alternative way has moved retailers of all stripes toward such technology-driven initiatives as virtual reality, and increased adoption here is likely to come within the next 12–18 months, he said, as the cost of devices drops significantly. Retailers can consider just how the consumer can interact with, and be engaged more fully in, the shopping experience and how to fold the payments experience into that activity.
Wyper also touched on augmented reality, which he termed as an enhanced digital experience within a real-world environment. The AR experience is catching on, he said, as evidenced by a phenomenon like the Pokemon GO app, here in the United States and beyond. For commerce, he said, there’s potential in considering how to make the consumer experience more of a game-like interaction. Connected devices tied to those visionary technologies, said the executive, can also reduce friction and improve the lives of consumers at several points along the shopping and transaction continuums. Mastercard, he said, is actively looking at the ways data and information delivered in real time can cover “who is actually in my store,” what they need and when, resulting in the anticipation of how to satisfy the needs of everyone rather than fitting them into a one-size-fits-all interaction.
Bridging The Gap Between Merchants And Consumers — One Platform At A Time
If technology can improve the consumer’s shopping experience, so too can it bring buyers and sellers together in the first place, where otherwise they might have missed one another. Retail no longer can work with a “build it and they will come” model. Those who want must seek out those who have, and transactions can ensue, if intuitive and friction-free.
In a separate fireside chat between PYMNTS’ Webster and James Esposito, Vice President of Payments, Risk & Treasury at Etsy, the duo talked about the way online marketplaces such as Etsy can smooth those interactions. Esposito noted that part of Etsy’s value adds and functionality is to help answer the questions that smaller businesses have at as basic a level as “how do I get started” in listing, offering and even getting paid for products? The goal, he added, is to let businesses spend more time creating new items to sell and less time on administrative tasks. Those activities may be less-than-ideally evenly split. For payments, that means being able to solve for administrative tasks tied to sales done across currencies, to name one example.
Skepticism And Optimism, With A Bit Of Mobility In Payments
Mobile, mobile everywhere, but in payments, will it pay off? Conrad Sheehan, who heads the payment systems and solutions team at JPMorgan Chase, told attendees his working title for his own presentation was “Skepticism and Optimism.” That summation, he said, represents a realistic point of view when it comes to mobile payments.
Despite the steady and increasing flow of awareness and information about mobile payments “and a period of major, major transition for the consumption of mobile data,” a simple Google search on the term yields tens of millions of hits, while the same search on digital payments brings in hundreds of millions of hits. But the question remains over how this awareness and exposure is tipping over into the payments space in terms of actual use, said the executive.
“There’s no one-size-fits-all solution that I know of,” he said. There are some encouraging signs abroad, as payments adoption via mobile devices is making headway in places like China, via WeChat. In Kenya, 83 percent of mobile device users subscribe to mobile payments services. But working across disparate technology, from NFC to QR codes to in-app, he said, means that mobile and digital payments as a segment “is still in the first inning.” For the merchants, and especially retailers, he said, the challenge is to navigate amid an overwhelming amount of information and identify just how tech-driven payments can work within their respective and sometimes individual environments. For many firms, he continued, technology ranging from POS to gateways can impact middle- and back-office functions, with the “challenge of … if I do this … where will I get [the equipment?] … Will my existing customers spend more?”
Successful adoption of new payments technology and changing consumer behavior can come, said Sheehan, in a “reimagining” of the transaction “that simply cannot be delivered in the offline world.”
The advent of the smartphone, which can, of course, do everything from scan barcodes to use Bluetooth to set up peer-to-peer payments — all of it impacting the way money flows — can help foster a unique experience for the consumer, said Sheehan.
The commuter experience via rail, said Sheehan, can illustrate the reimagining of payments. Using a mobile device to buy tickets, whether one day, week or month, helped boost railway ticketing adoption of this type by more than 30 percent in New York, Boston and Chicago in fewer than 12 months.
Tying Valentine’s Day Data Up With A Looped Bow
To illustrate just how trenchant and speedy the data can be for retailers and merchants, as driven by technology, Roy Erez, CEO and cofounder of Loop Commerce, offered insight into what consumers shop for “when they are able to shop for whatever they want, whenever they want.” But in eCommerce, and in shopping in general, he said, picking and choosing and paying for oneself is inherently different than shopping for someone else — “shopping for someone else is tenfold more complicated,” he said.
The history of actual, physical, tangible gifting seems innocuous enough, as Erez noted that “people actually gave thought” to what they were doing and paying for and the signals they were sending. Nowadays, there’s the gift card, which signals that “I’m not sure exactly what to give,” as he stated. The online world, he said, now may start with the gift card as the item of first choice for givers. And yet, he said, some studies show that most people — except for the giftees — do not, in fact, love getting gift cards.
Erez pointed to his own firm’s online experience, which is a way to leverage digital technology and gift giving so that it has the emotional impact of a more personalized, in-person encounter, even when done at the very last minute. In that model, shoppers choose a gift on a retailer’s website and send it, electronically, to the recipient, who can alter size, color and style, or even exchange the proffered item for something else.
As for timing, some of the data may run contrary to conventional wisdom or expectations, at least as it related to Valentine’s Day, and voiced at NMD, women were, in fact, more likely to wait to the last minute in terms of shopping. And men were statistically more likely to exchange gifts.
For further exegesis and the heart of the heart day data, click here.
Amazon’s View Of The Amazon Effect
Is any discussion of retail, eCommerce and mobile payments complete without a nod to Amazon? Not if Amazon’s in the audience and, in fact, on the stage.
In a discussion between Karen Webster and Patrick Gauthier, vice president of external payments at Amazon, the duo noted that the eCommerce giant is a proxy for the online environment in general, with firms large and small inevitably asking questions about how to compete with, displace or work with the juggernaut. Amazon can, Gauthier noted, reveal what the consumer wants and even how they use technology, which can benefit those smaller retailers and merchants.
As such, other firms can find some instruction in looking at Amazon and at their own businesses, with a nod to the firm’s overall mission as being “maniacally focused” on solving consumer problems, with an example coming from Fulfillment by Amazon. That service, said Gauthier, consistently asks and seeks to answer the question tied to what would make it such “that consumers get what they bought, faster,” in a simple way. This leads the way to partnerships, he said, between Amazon and other companies and should be a guiding principle for companies across spectrums. If firms are good at a particular step in the retail experience — say, payments — “then do it. If not, then partner with somebody else.” The evolution of technology and services has grown to the state where companies can, and should, decide where to concentrate both money and human capital in order to excel at certain tasks. Communication among retailers about best practices centered around technology, or how to change existing practices, can also be productive, he added.
And in the everlasting drive to productivity and streamlining the customer experience, chatbots can offer the best and the worst of experiences — they can be formulaic, he said. But optimally, they can also offer a way to address some questions on a personalized level, quickly, said the executive. Speaking to larger trends, he said commerce has “passed a threshold” between connected and non-connected experiences, as dictated in part by devices — and using a device to swipe or tap at the point of sale is less than ideal. The customer thinks in terms of experience, he said, and not in terms of channels. Omnichannel exists as a construct for companies to use as they view their operations.
Asked by Webster about some of the more surprising data points accumulated by the company over the past year, Gauthier said that research has shown that the percentage of people who prefer not to buy in-store has jumped from a bit less than 15 percent to more than 25 percent.
“What consumers are telling us is that the in-store experience is no longer satisfying their needs,” said Gauthier.
The final fireside chat gave an illustration of how payments and eCommerce innovation can truly make its way to Main Street, impacting the very way we search for and obtain even the most basic of staples. PYMNTS’ Webster and Jed Kleckner, CEO of Delivery.com, discussed the evolution of, well, deliveries using his platform that connects small merchants with consumers in the neighborhoods in which they live and work.
The executive noted that, upon the commencement of his own career at Netscape, it was impossible to imagine anything from the internet realm actually making the transition to the physical world, and in terms of payments, the conduit was credit cards “and nobody wanted to pass that information along over the internet.” No, of course, there are all sorts of payments methods (and data) conducted over the cloud. He described his own business, which lets consumers order online from local restaurants, liquor stores and grocers, as one that aggregates and makes those products available through the platform and apps. The model is one that makes it “economically viable” for these smaller businesses — numbering more than 12,000 in a recent count — to be both available, and readily found, by the more than 2 million consumers who use the Delivery.com platform regularly.
It’s this kind of creative thinking, and that which we saw and heard throughout the day from these new inspiring innovators and emerging retail platforms and marketplaces, that will drive the reinvention of retail and create new ways for consumers and merchants to do business. And precisely what we wanted to capture that day.
After all, to see what’s next, why look at what was?
Until next year…