Fri Jul 07 2017
Shoppers are in control, there’s no use denying it. What they want, they get. Or they go elsewhere to find it. The question is, are you moving your brand forward at the same pace as they’re changing their shopping and spending habits?
Two things are in play here. One, consumers don’t just want to buy stuff anymore, they want life-shaping experiences; experiences to tell their friends about. Two, the world of payments faces an unprecedented shift in pursuit of enabling these experiences quickly and conveniently, regardless of device, location and time of day. In short, experience is where the money’s at.
Ruth Marshall-Johnson, Foresight Director at The Future Laboratory, says that retailers are trying to get even closer to their customers to create better connections with them. Speaking at a Barclaycard conference on the future of payments, she described the shift for retailers as making the gap between the person and the purchase as small as possible.
Whether that’s retailers selling products directly through social platforms – something Ruth says will be the strongest driver of purchasing power over the next 10 years – or recommending products based on how the customer feels at the time, the idea is to engage in a more human and more emotional way in order to sell more.
“That is not contradictory, it’s better selling,” Ruth says. “It creates a sense of what we call total retail.”
Customers are also looking for instant gratification – and retailers will need to think about how they can deliver it.
Ruth says that 63% of shoppers are interested in software that anticipates and sends orders automatically*, and that feeds into one of the key trends for future payments – effortless purchasing experiences. And since 2007, those effortless experiences have been made possible and widespread thanks to contactless technology.
But alongside this ease of purchasing, there’s likely to be a greater demand to provide transparency for consumers over their spending, says Nick Kerigan, Managing Director, Future Payments at Barclaycard.
That’s because the more invisible the payments are, the easier it is to lose track of them. Consumers could well favour those retailers and service providers who help them stay on top of things.
“Delivering the best service for the customer means making sure they know where they are with their finances at any given point and that they’re in control of their spending,” he says.
Virtual reality is the hot new topic as the drive for experiential retail surges ahead.
There are already strong examples. Car retailers enabling customers to test drive cars without hitting the road is one, while one big department store allows its customers to explore the world of its Christmas advert with in-store VR technology.
And it’s not just technology for technology’s sake. There’s a business case for it too. Retailers have found in-store VR experiences can boost sales, says Christian Burne, Business Director of VR studio, Visualise.
For example, a popular holiday company has been allowing customers to explore destinations in a ‘try before you fly’ VR experience. Trips to New York registered a 180% increase in conversions at the point of sale**, Christian says.
Other retailers are using VR to drive footfall into stores, helping to boost sales by providing better, more compelling customer experiences that differentiate them from the competition.
“You can immerse consumers in a brand story in previously unimaginable ways,” says Nick Kerigan. “Creating desire and driving greater confidence in the purchase – helping those retailers sell more.”
There are other ways retailers can use VR to ease consumer pain points. Incorporating it into the product research stage by creating enticing VR experiences on mobile could be one – there are many cheap, accessible VR headsets for consumers that work with a mobile phone.
But what’s next? The technology to make payments in VR will be available in the next 6-8 months, predicts Christian, and a virtual high street – where consumers choose what brands and experiences are present – might not be far behind.
But as technology becomes more advanced, so do the criminals that attempt to exploit it. Cybercrime is a massive threat to an increasingly digital retail experience and it can feel like companies just don’t get a break.
Instead it’s assumed that they are being careless. But ex-hacker Cal Leeming says that while the technology is becoming more complex, hacking is becoming easier. And it’s not just the security of the payment itself that’s important. Personally identifiable data is valuable to criminals as well and losing that can result in punishing fines.
Paul tells business owners that at the top of their list of concerns should be a large-scale theft of customer credentials. After that, data destruction, which prevents the business from operating, should be another concern, as should criminals stealing large amounts of funds.
So what can you do? Paul says that there are three main steps that any company should follow. Firstly, have cyber security monitoring teams that can catch any irregularities. Secondly, have teams that can respond to those irregularities, and thirdly they should buy-in the best intelligence in the sector that they can.
And one lesson from Cal. Don’t have all your devices – tills, CCTV, staff tablets etc – running on one network. Some are likely to be less secure than others, but once a hacker is in they can wreak havoc.
“There was a similar situation to this at a large organisation several years ago”, he says. “A hacker was able to penetrate their corporate network by compromising a deli meat scale. Many firms across the world, in particular large department stores, are susceptible to these attacks.”
*Source from the Seamless Retail Survey 2016, survey conducted by Accenture Consulting
**Source from Visualise based on work it conducted with Thomas Cook Holidays in 2016