7 ways for merchants to survive the transforming retail landscape.
By Joe Mach
The 21st century retail environment is a jungle and just when merchants think they’ve hacked their way through it, it gets more complicated. With regulatory advancements, technological growth and generational forces constantly changing the landscape, it is important for merchants to turn these challenges into opportunities and cater to the evolving needs of the connected consumer.
Surviving the retail jungle is all about engaging consumers in new ways. The traditional retail landscape has changed partly due to the global e-commerce industry, which is expected to surpass $1.9 trillion by 2018.
To accommodate consumers’ changing preferences, tactics must change. Listed below are seven ways in which merchants can stay relevant, succeed and compete:
Know Thy Customer
41% percent of consumers expect offers that are personalized and relevant when they walk into a store.1
Consumers have grown accustomed to the convenience, simplicity and security of the online experience — they want the same features in-store.
Still, nearly 90% of retail sales are generated in store.2 So it’s clear that the reign of the physical retail environment is far from over — it’s just a matter of making the experience in-store similar to the one online.
Mind the Millennial & Create “Instagrammable” Experiences
Per a report by the Seurat Group, more and more millennials are entering the workforce every year, and by 2020, they’ll represent more than 40% of consumers in the U.S. Thus, their buying power is increasing. Industry research also shows that, rather than trips to just make purchases, shoppers are drawn to in-store experiences that are digitally-connected.
For younger generations, the purchasing experience tends to supersede the purchase itself. Enabling merchants to create an in-store experience to write home about (or post on social media, rather) is an excellent way to help them stay relevant while attracting and retaining more customers. For example, merchants can engage consumers with fun and interesting digital ads (“pop-ups”) throughout the store right at the point-of-sale (POS), at the table or on a customer’s mobile device, using beacon technology.
Unify the Brand
More than 70% of consumers browse online before making in-store purchases, and two-thirds will check prices on their phones.3 In addition, 22% of consumers spend more at the stores if digital channels are involved in the process.2 And 42% of consumers say the ability to order online would make them choose one restaurant over another.4
While visiting stores and restaurants, consumers increasingly have their smartphones at the ready to aid their purchasing decisions — whether to compare menu items or to find deals and locate products as they walk the aisles. Their chief complaint is when in-store inventory isn’t consistent with the information provided by the merchant online.
It is important for merchants to tear down the silos between their online and physical storefronts. Connecting both channels can provide them with access to the advanced consumer data and analytics needed for better targeting, consumer insights and personalization across all customer touchpoints.
However, integrating online and physical storefronts in a way that is consistent and seamless from the consumer’s point-of-view is easier said than done, considering the complexity and ever-changing nature of technology, apps and regulation — not to mention the limited bandwidth of IT resources.
Fortunately, payment technology offers a solution for merchants to overcome these obstacles. Recent innovations in this space have catapulted POS technology far beyond merely “payment acceptance.” For example, one of the country’s top 10 quick-service and fast-casual restaurants wanted to further expedite the ordering process for customers. They have successfully implemented a system that integrates online and in-store experiences by implementing an easy and convenient way for their customers to order online and pick up at the store. With the capability to engage with consumers through kiosks, mobile and web, they are on track to surpass 1 billion transactions by the end of 2017.
Think Outside the Checkout
Another major complaint from modern consumers is that checkout lines are just too long.
According to a report by IHL Group, retailers who have embraced mobile technology are experiencing significantly higher growth in sales, and retail leaders are 150% more likely to be using mobile POS (mPOS) to complete consumer transactions.
Bluetooth Low Energy (BLE), 3G/4G and Wi-Fi connectivity combined with mobile or portable POS devices allow merchants to extend the POS beyond the counter and throughout the store. These technologies help reduce the time customers spend in checkout lines while creating a more one-on-one, transformed shopping experience. At restaurants, this technology also enables secure pay-at-the-table solutions.
The Keg Steakhouse + Bar is an example of a full-service restaurant chain offering pay-at-the-table service to enhance its guests’ experience. Servers are able to close the bill transaction right at the table so guests experience secure, efficient payment and convenient service.
Spread Out Investments
Three billion loyalty cards will operate as mobile-only or be integrated into mobile apps by 2020 (up from 1.4 billion in 2015).5
The introduction of new consumer-facing technology is constant, and as new apps and digital payment methods are introduced, consumers will expect to use them in the physical store.
Payment device cloud connectivity can expedite the merchant’s ability to access popular business and consumer apps at the POS. By leveraging app marketplaces and developer toolkits, proprietary and third-party apps can be developed, tested and supported on their devices. Benefits range from improved customer loyalty via points programs or geo-targeted offers inside the store, to tailored incentives based on online purchases at the POS and improved inventory management via e-commerce and legacy system integration.
Merchants want to be empowered to try out new technologies as they emerge so they can securely experiment to find new value and revenue opportunities.
19% of consumers said they would stop shopping at a retailer that had been a victim of a cybersecurity hack, even if the company took the necessary steps to remediate the issue.6
All merchants — regardless of size — are vulnerable to payment system attacks, and customers are concerned about the security of their information when making a payment.
Merchants want to know that their devices and systems are as future-proof as possible. Multilayered security helps protect sensitive information as it travels through the payment ecosystem and PCI DSS compliance ensures that merchants keep up with ever-changing industry standards.
An illustrative snapshot of the extent to which payment technologies have evolved, payment devices no longer just accept payments, they are now powerful business solution tools that enable merchants to create innovative and future-ready shopping experiences for the connected consumer of today. Retailers that continue to evolve and leverage online experiences in the store stand to win customers and tap new revenue opportunities.
— Joe Mach is president of Verifone North America. Verifone is a leading POS terminal vendor touching half the world’s consumer card payments, partnering with global brands including Alipay, Google, Apple, VISA, Intel, Samsung, Microsoft and Vantiv as well as eight out of 10 of the top U.S. retailers.