Payment is in a state of change. Retailers are weighing a number of things, including the looming EMV deadline, mobile wallets and mPOS.
But what key trends are industry thought leaders seeing?
In the below Q&A, Leslie McNamara, Managing Director and EVP of Citi Retail Services, discusses new payment trends, and how Citi Retail Services is providing the industry with comprehensive payment solutions.
Retail TouchPoints (RTP): What are the key trends you’re seeing in the retail payment industry?
McNamara: Our relationships with a wide range of top national retailers gives us a good view into the trends most impacting retailers today. The most significant trend merchants are dealing with is the continued proliferation of new payment methods and providers. New platforms, currencies, mobile wallets and other technologies are constantly entering the space, and our retail partners are engaging with these new providers and working to determine what will work best for their customers.
Retailers need stable, easily integrated payment options that provide them with tools to increase sales and customer loyalty. To date, most retailers are finding that private label programs continue to provide the best value in terms encouraging focused spend and providing integrated analytics.
As it relates to the newer payment providers, no clear winners have emerged in the space, and we expect to see continued innovation and disruption over the next year or more.
RTP: What solutions/guidance does Citi Retail Services provide to retailers?
McNamara: Citi Retail Services is the division of Citi’s Global Consumer Banking business that provides consumer and commercial credit card products, services and integrated retail solutions to national and regional retailers across the U.S. The business services 90 million accounts for a number of iconic brands, including Best Buy, ExxonMobile, Macy’s, Sears, Shell, The Home Depot and others.
Citi Retail Services is a full-service retail partner providing credit products and services as well as loyalty solutions, data and analytics, marketing services and a highly sophisticated field service organization that can work with retailers on a national, regional or store by store level. Our dedicated field teams work side-by-side with retailers to help them better understand their customers, provide the best retail experience possible and increase profitability.
In addition, we provide best-in-class digital capabilities, risk management expertise and have a number of assets we use to maintain a pulse on the latest retail data and shopper trends to keep our partners informed. Our partners also rely on our expertise to integrate with their existing strategies and goals and keep up with today’s consumers.
RTP: What benefits do retailers have in creating their own private-label cards both from a sales and customer loyalty perspective?
McNamara: Private label credit cards provide a number of benefits to retailers and consumers including:
By Ross A. Haskell, Director, BoldChat Products, LogMeIn
LogMeIn recently released new research based on the survey responses of nearly 6,000 mobile users who, at one time or another, had used their device to contact a company. The report is hefty — as are the conclusions it draws — so we wanted to craft an executive summary with a solid, though not exhaustive, overview of the report.
It’s worth noting that prior to the study’s commencement, we found notebooks full of mobile research (literally, we printed them out and put them in notebooks), yet we found very little on the topic most pertinent to us: Mobile engagement. One of the most salient points in the Effective Mobile Engagement report is the defining — or redefining — of what exactly mobile engagement is — and isn’t.
What Is Mobile Engagement?
Mobile engagement is not advertising. Mobile engagement is about communication or the facilitation of conversations between a business and a customer. One of the hopes of the research effort, over time, is to empower businesses to better understand mobile engagement so that they might embrace it, optimize it, and build competitive advantage from its superlative execution.
Today’s definition is decidedly reactive from a business perspective: “Mobile engagement is when a customer chooses to connect with a business and that business does their best to respond as quickly as they can. The business may or may not even know they are engaged with someone using a mobile device.”
The definition we hope that businesses will adopt sounds more like this: “Mobile engagement is an operational practice that includes an organized and intentioned set of actions, processes, people, and technology aimed at being ready to efficiently and superlatively handle customers who engage from mobile devices.”
In order to achieve the second definition, companies must understand why mobile engagement happens, with whom, what drives engagement satisfaction, and when to engage proactively. The Effective Mobile Engagement research was specifically conceived to address these questions.
Nearly 6,000 respondents across 10 countries were surveyed and the results allowed us to draw five important conclusions for businesses wanting to build a mobile engagement competence.
The respondents were mobile device users who had, at one time or another used the device to engage with a company for support, e-Commerce, or both. The percentage of those qualifying for the survey was very high — more than 80%. The conclusions — each and every one of them — have the potential to challenge existing customer engagement paradigms.
A variety of analyst groups and solution providers have been touting the term the Internet of Things for a few years now.
But until recently, very few people really knew what the term meant and how it would impact our lives.
In the below Editor Q&A, RTP team members share their thoughts on the Internet of Things and how it will shape our future:
Debbie Hauss, Editor-in-Chief: The Internet of Things (TIot or just IoT) is still a cutting-edge concept for the most part, but it will surely saturate the retail marketplace, as it moves into more consumers’ everyday lives. Defined by Gartner, IoT is “the network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment.” Gartner also estimates that IoT product and service suppliers will generate incremental revenue exceeding $300 billion by 2020. As this technology develops, we will connect to and control more things in our lives, such as medical devices and exercise equipment. It will be exciting to see how IoT changes our lives moving forward.
Alicia Fiorletta, Senior Editor: You know that ride at Disney World called The Carousel Of Progress? It’s an educational ride that shows a family venturing through several decades, discussing how technology has changed their way of life. At the end, they’re in the 20th Century (ha!), and have connected devices that respond to the sound of the family members’ voices. I wonder how far off that will be, because ABI Research predicts that more than 30 billion devices will be wirelessly connected to the Internet of Things by 2020. I can’t wait to see how the Internet of Things will continue to evolve, and how it will impact technology. At this year’s NRF Big Show, I saw a lot of fun examples of connected devices. For example, mobile devices that connect to TVs, so consumers can purchase products in a scene of a primetime show. Talk about compelling television!
Kim Zimmermann, Managing Editor: With so much information available about us through the Internet of Things there is a lot of potential yet to be tapped. I was at the Salesforce conference last year listening to an executive talk about how he ordered a bathroom scale online and when he stepped on it for the first time it calculated his BMI. He thought that was strange, as he hadn’t entered his height, which is needed to calculate BMI. Then he remembered he has purchased another item from the company earlier that year, and had entered his height. If an executive at a tech company is marveling at the IoT, we are in for a wild ride.
Glenn Taylor, Associate Editor: I’ve heard this phrase floating around the web over the past year or so, and to my understanding, the Internet of Things is highly data driven in its function. The concept removes the human element from any form of data communication, as the wireless flow of information between devices deems human input unnecessary. Retailers have the opportunity to leverage the “things” that comprise the IoT, especially RFID technology with sensors, which is already being used to track inventory throughout the supply chain all the way into the retail store. GPS (for delivery purposes) and predictive analytics (for promotional purposes) are other functions that are certainly keeping retailers interested in the IoT, as they require less and less manpower to operate.
Brian Anderson, Associate Editor: The Internet of Things…the word “things” is too broad for my liking. Whether it’s social data or contact information collected off a digital landing page, these “things” can range widely in size, volume and — most importantly — value. I was reading an IDC study that stated that the world population will be using more than 5,000 gigabytes of data for every man, woman and child by 2020. That’s A LOT of data. Retailers need to be prepared for this influx of information by having the right technology in place to leverage the right types of information from the right audience in order to boost overall performance.
You’ve probably been hearing about beacons a lot lately. Even Retail TouchPoints has covered the beacon space through a series of articles and trend pieces, outlining the potential for retailers that use the technology.
But those just dipping their toe into the beacon pond may still be a bit unfamiliar with the technology, how it works and why it’s so powerful.
To help address a few key unanswered questions, we called on Tim Perfitt, CEO of Twocanoes Software.
Prior to founding Twocanoes, which provides a short-range Bluetooth device that alerts customer-aware systems of nearby mobile devices, Perfitt spent a decade as an Apple employee, working on OS X certification training. In his past position, Perfitt helped market Apple products to higher education and large-scale corporate environments.
Below, Perfitt outlines a few things retailers need to know about beacon technology:
1. It’s a more granular alternative to geofencing: Beacons are the “sweet spot for micro-location,” Perfitt explained. For a while, many businesses tapped geofencing to engage consumers on a more intimate level. But the technology only gives a general understanding of location. Beacon technology, however, enables closer proximity marketing, allowing retailers to understand where consumers are, down to the aisle.
2. It won’t compromise customer data: “People think beacons are similar to something like Wi-Fi; that there’s a pipe that goes back to the Internet or the cloud,” Perfitt said. “ But in reality, they’re just identifiers. There’s nothing privacy concerning because beacons don’t collect information. If someone stole a beacon they wouldn’t have access to all your customers’ information.”
3. It doesn’t invade privacy: If a consumer walks past a beacon, they won’t be instantly bombarded with marketing messages and offers. An opt in is required before a consumer can receive the marketing messages, and the retailer can start understanding in-store buying behaviors. “When you install an app that uses beacons, it will ask for permission to use location services, and the user has to opt in,” Perfitt noted. “If the consumer says no, the beacons won’t work, but the app will continue to work.”
4. It doesn’t track consumers: A big misconception about beacon technology is that if an app is beacon enabled, a customer is always being tracked. However, beacons are not constantly looking for consumers to track. “The app itself goes to sleep and only gets ‘woken up’ when in proximity to a beacon,” Perfitt said. An app is only woken up when it’s in proximity to a beacon from that specific organization.
5. Beacons can tie online to offline: “We’ve been talking to a coffee wholesaler that has some retail stores,” Perfitt said. “Some people buy the coffee online, but they want to see if they can use beacons to track how offers are performing and how they can bring people from the web to the brick-and-mortar store.”
6. It’s up to retailers to optimize the relationship: Once consumers opt in to location services, it’s up to retailers to not overstep their boundaries. Beacons, at the end of the day, are “an agreement between the retailer and consumer,” Perfitt said. “It’s an agreement that the retailer isn’t going to market to consumers in inappropriate ways, and that the consumer, in turn, won’t uninstall the app. If you think about it, it actually gives consumers a bit more control.”
What do you think is the biggest misconception about beacon technology? Do you think more retailers will implement it in 2014?
By Chris Souza, Marketing Manager, IZ-ON Media
"Don’t think about an elephant." And now you’re thinking about a massive gray animal.
You could probably replace the word “elephant” with any other similarly evocative noun, and it will have the same effect. This simple phrase is indicative of the power and influence advertising campaigns and other marketing strategies can have on consumers almost without their conscious control. This outcome isn’t limited to just written words; it also applies to various colors, images and displays that have a profound impact on shoppers’ behavior.
We’re not talking simply about impulse shopping, but looking at the ways in-store marketing influences behavior on a level that often goes unnoticed by the majority of shoppers. Delivering an effective strategy is largely based on research and data analysis, which brands can use to create dynamic and targeted experiences.
Influential In-Store Displays
From one perspective, brands have used end caps and floor stands to increase shopper awareness of specific products. Using traditional methods to gain consumers insights, brands have been able to get a better idea of ad recall and influence. According to Shopper Marketing magazine, the neuroscience behind in-store purchasing decisions demonstrates that various point-of-purchase displays play different roles in attracting consumers.
For example, eye-tracking technology and equipment that records neurological responses to visual stimulation confirm that end caps are effective at drawing shoppers into a specific product section. From here, consumers are better able to find items in stores. Yet, floor stands are somewhat disruptive on shoppers’ path to purchase. Instead of guiding them to products they had already considered purchasing, they tend to spur unplanned consideration of a brand or merchandise.
Point-of-Purchase Advertising International conducted a study that used the electrical signals generated by the brain to get a clearer idea of how shoppers respond emotionally to in-store displays. From its study, POPAI found 76% of shoppers were making purchasing decisions in retail locations, responding to brand advertising and in-store displays. The research also found consumers use displays as a point of reference for a product as they navigate supermarket aisles or a similar location. End caps tend to be the most effective in influencing shoppers to select an item, accounting for 44% of customers’ decisions to pick up the item from the shelf after looking at the display. Meanwhile, floor stands account for 37% of this behavior.
Video integrated with the static in-store resources that brands use can increase the effectiveness of their campaigns. One of our clients - a prominent candy brand - integrated a 15-second advertisement through our HDTV Network, which resulted in 33% ad recall and a 32% increase in customer intent to purchase.