We have been looking at how the evolving world of retail is characterised by new formats and models (both in-store and online),as well as the needs and wants of the consumer through local market events across Europe. In this series of #ShoppingFutures articles we explore retail innovation and what this means for payments.
Recently, my colleague Ulrich Keppler and I hosted an event for retailers in Amsterdam. We wanted to hear their vision on the future of payments. A very relevant topic in a retail landscape that is changing rapidly. In the Netherlands, as well as in other parts of Europe, newspapers report almost on a weekly basis about retailers going bankrupt and about the vacancy of retail space, even in big cities. Explanations for this are complicated and diverse, but often have to do with not adjusting quickly enough to changing times and demands of consumers. The other side of the coin is that several newcomers – online as well as offline – are growing like never before.
What is the role of payments in this very dynamic market? How can you serve your customers best with payments, and raise your sales? And how far should we go in making payments as frictionless, as seamless as possible? These are the kind of questions we discussed during a fruitful, lively event in Amsterdam.
We kicked off by drawing on our own experience and research. Some of the developments we (fore)see and observations we shared:
- Seamlessness is key. This is illustrated by the spectacular growth of contactless, which makes payments quicker and easier.
- At the same time, the degree of ease and speed the client wants, highly depends on the circumstances. When buying an expensive jewel, for example, consumers often prefer a certain degree of friction, as they spend a serious amount of money.
- It is all about omni-channel and being technology agnostic. There is not one channel or payment method that will win. More and more channels will be used. And in the end, it is the consumer who decides which channels will become mainstream.
- In this restless environment, where innovations are coming up at a higher pace than ever before, it is our job to facilitate reliable, secure payments across channels, around the world. Our scale and reliability make us a unique and sought-for partner.
- Meanwhile, we are also facilitating innovations. For example in our Collabs, where we nurture and support fintech startups.
- To end, we should not underestimate the role of social media in the buying process, especially for Generation Y. These youngsters use social media in the orientation process, the buying process as well as after the purchase.
A lively discussion followed. One particular guest boosted the discussion: a representative of the Dutch Railways. He told us how he rolled out contactless in the Netherlands’ railway stations’ retail. There, payment is all about speed. The only way to serve the – often hurried – traveller the best, is to be quick. Extremely quick, all the time. This also increases sales. A noteworthy observation was that, following from this, the aim is to help the consumer to get out of the shop as soon as possible. How different from a traditional shop, where the retailer wants to keep the customer inside as long as possible, to increase sales.
We also touched upon the theme of big data, data analytics and personalised offerings. As well as with regard to payment methods, we saw that the use of these new possibilities differed highly between the various kinds of retailers. Some of them mentioned that they would like to know as much as possible about their clients in order to make them useful offers. At the same time, they were pretty cautious about the legal limitations. Besides that, an attendee from the gas stations business foresaw a bright future in big data, especially related to connected cars. The connected car can pave the way to the integration of, among others, payment, loyalty, navigation, and personalised offers. This can happen quite soon: we are talking about a horizon of years here, not decades.
To end, a few remarks about loyalty. Again – it seems like we are starting to repeat ourselves – this theme affirmed our belief that there is a large variety of demands across businesses. For example, a representative of a big ecommerce party told us that he is not that much into loyalty. His clients want speed, good products, and an extremely high service level. They do like suggestions based on their personal shopping behaviour, but that is enough. In the gas stations business, and even more in airlines, on the other hand, loyalty is a factor that can make or break your business. Therefore, it was not surprising that these parties were highly interested in ways to integrate loyalty and payments.
We appreciated the time spent with these retailers. It is something we want to do more often. And it fits the 21st century way of doing business. The time of thinking about the demands of clients and partners, spending an awful lot of time to create new products and services for them, and then spend an awful lot of money to market those, lies behind us. Instead of that, we co-create. We listen to relevant stakeholders, identify joint challenges and look for quick ways to face them. Lean and mean, together.