From hardware to software, from cash registers to digital wallets, the way commerce is done at smaller firms (SMBs) is changing, especially as mobile makes inroads into the way we pay.
In an interview that springboarded the findings of the Retail Innovation Readiness Index, published late last year, Nicky Koopman, vice president of content and value-added services at AEVI, stated that when it comes to apps, one maxim holds true: One size does not fit all.
Koopman noted that the overarching aim of apps — no matter their functions, from payments to weather reports — is to help make the lives of consumers easier. The melding of apps in mobile devices has made them indispensable over the past decade or so. As she said, a bit tongue in cheek, we used to take pains to not leave the house without our wallets. Now, she stated, “we don’t leave the house without our phones — and the wallet frequently is [housed] within the phone … the phone is what it is all about today” when it comes to commerce, for merchants large and small.
She added that the advent of what is collectively known as the “pays”— that would be, of course, Apple Pay, Google Pay, Samsung Pay and a host of others — has led to an environment where it is easier than ever to connect with the world at large, and pay in-app, on the go and even through the use of social media profiles.
It's no surprise, then, that more than 87 percent of the small merchants queried jointly by AEVI and PYMNTS stated that they know innovation is crucial in the bid to stay competitive, and a majority see innovation as a way to increase sales.
Laying The Groundwork
Ah, but how to get there?
The approach to innovation (with a focus on retailers) is a two-sided question, said the AEVI executive. Innovation, and the availability of new features in apps, requires an adjustment by consumers, who need to be presented with — and walked through — what’s on tap (literally).
Koopman said merchants must be aware of, and embrace, some of the most pressing desires consumers harbor when it comes to transacting, no matter the vertical.
Among the features most necessary for adoption by merchants, according to Koopman: the ability to pay in-app, to get digital receipts sent to email addresses and phones, and to mobile order-ahead (a hot button, as evidenced by Starbucks). Loyalty and rewards systems also have a place in the retailer’s toolbox, helping to cement sticky relationships with consumers.
Beyond the shopping expectations and what happens at the point of sale, there exists a whole other realm of apps geared toward the merchants themselves, which help them optimize operational efficiencies. Here, Koopman said, lies a wealth of opportunity for merchant acquirers and independent sales organizations (ISOs) providing technology solutions and advisory services to retailers.
“The solutions for the merchants are not necessarily always ‘shown’ to the consumer,” said Koopman — and, in this case, apps could be implemented to help business owners with inventory control and management of staffing levels.
As Koopman told PYMNTS, developers are a crucial part of the ecosystem, too, and can benefit from a successful relationship between merchants and advisors. In many instances, developers are part of the whole value proposition, too.
“A different solution, or a mix of solutions, may work best for merchant profile ‘A’ versus merchant profile ‘B,’ and the developer working in tandem with the merchant acquirer or ISO can help tie together integrated merchant solutions,” she said.
In cautioning, again, that one size does not fit all when it comes to apps, Koopman told PYMNTS that size does matter. Smaller merchants do not have the budgets that larger firms do when it comes to deploying new tech initiatives, nor do they have the need for some functions offered by apps. A mom-and-pop grocer staffed by family, she noted, may have no need for a personnel management system.
It is incumbent, then, upon the merchant acquirer or ISO — which can find benefits from advisory roles — to truly understand their smaller clients’ needs and the unique qualities of each business. They should also realize that a significant number of smaller retailers may not be tech-savvy.
Starting simple when it comes to technology, with an eye on adding new functions as businesses scale, is the way to go. “After all, a new driver is not going to go out and start with a Ferrari,” Koopman stated. “This is where the merchant acquirer can step up their role, and benefit their merchants,” guiding the latter through what all hardware and software can and cannot do as they are put into service.