Mark Bunney of Ingenico Group, shares insight on why retailers need to think about themselves as individuals and make the technological investments that meet their individual needs, in addition to the needs of their customer base.
At its core, technology drives disruption. Innovation wouldn't be possible without the subsequent waves of uncertainty and awe that come as a result. Retailers are experiencing this shock today, as Amazon continues to push the boundaries and limitations of how retailers can operate — both in-store and online. Cashier-less checkout is a fascinating concept, but those retailers who are experiencing "Amazon-azement" and feel pressured to compete directly should take a minute to think strategically.
There are many ways for companies to innovate customer experiences in-store, but what makes sense for one company might not make sense for another. Retailers need to understand the spaces they operate in as well as the demands of their specific customer bases so they can invest strategically and with purpose.
For example, convenience stores and specialty stores are the perfect use case for re-inventing the checkout experience. The store itself is small enough to maintain from an inventory management perspective and the inventory is boxed and sold per unit. On the other hand, grocery stores are fundamentally opposite in their foundational structure — where the spaces are large and much of the inventory is sold per pound, instead of per unit. An investment in cashier-less checkout would be unwise for grocers in this case.
All things considered, there are many other ways for retailers of all industries to strategically invest in new in-store experiences, but each has its own individual case-by-case benefits.
Many customers rely heavily on in-person interactions to help them make purchase decisions. Retailers whose customers value these interactions need to take this into consideration when making investments in new technologies and business models. For these types of merchants — such as IoT device, high-value hardware, and other big-ticket item retailers — investment in mobile checkout technology may make sense.
Look at Apple, for example. In-store interactions between the customer and sales associate occur throughout the entire Apple store. And likewise, this is where the final transaction occurs as well. The payment process has been baked into the most valuable part of the in-store experience for the consumer — the interaction with the associate. Not only is the store prioritizing what's important for the consumer, but they've successfully abolished traditional checkout lines and have found a way to best optimize the space that they have available.
While this type of experience may make sense for these high-value item retailers, others may not need to invest in such a foundational shift.
Mobile wallet adoption is on the rise. Just this past holiday season, 30% of consumers had planned to use smart payment methods in-store — whether they be via smartphones or wearables. People are becoming more familiar with mobile wallet payment methods — so much so that they are making more purchases as a result. A recent study shows that retail purchases have increased by over 23 percent when consumers opted for mobile wallets.
This shows how convenience and accessibility is a proven driver of sales — which is not a surprise, given the fact that people have historically spent more money when using credit cards instead of cash. Because of this, investment in mobile wallet payments should be a no-brainer for the retailers who are looking to streamline their checkout experience while simultaneously increasing sales.
Many retailers — specifically those whose customers prioritize convenience over experience — may feel that the rise of e-commerce is their biggest threat. Because of this, people have long since been dramatizing the idea that retail is dead and e-commerce giants (like Amazon) are pushing brick-and-mortar into a state of obsolescence. This is, of course, not the case. Retail is instead in a renaissance — changing for the better to adapt to and live alongside the convenience of e-commerce shopping.
There are plenty of advantages of e-commerce shopping in the eyes of the consumer — from easy access to product information and a variety of product choices to pricing and checkout experience advantages. That being said, there are aspects of the in-store experience that cannot be replicated online — like sales associate personality, immediate satisfaction from getting the item, the ability to feel a product in your hands prior to purchase, and more.
There are advantages to both, and these experiences should not live separately, but instead should complement one another. Retailers can invest in technology such as mobile shopping apps, bringing in-store deals and access to physical retail locations through third-party apps. They can also implement curbside pickup capabilities, allowing those who already know what they want to purchase to do so without the hassle of waiting in-line, but also driving traffic in-store to expose them to other deals and products that they may be interested in.
Retailers need to think about themselves as individuals and make the technological investments that meet their individual needs, in addition to the needs of their customer base. Amazon can be an intimidating beast — in its prowess as both a brick-and-mortar and e-commerce powerhouse. By thinking strategically and addressing specific aspects of the payment experience, retailers can optimize their valuable resources to deliver the best customer experiences without breaking the bank.