2018 Commerce and Payments Outlook - Reliant Solutions€¦ · 2018 Commerce and Payments Outlook...
Transcript of 2018 Commerce and Payments Outlook - Reliant Solutions€¦ · 2018 Commerce and Payments Outlook...
2018 Commerce and Payments Outlook
First Data Information and
Analytics Solutions
This document is a collection of opinions that are offered solely as a courtesy, and they do not represent
business or legal advice. The research is gathered from a wide range of industry publications, analyst reports,
white papers, websites, and interviews. The statements in this document related to future business or financial
performance may constitute forward-looking statements and actual results or performance may vary.
We understand Big Data
Our capabilities position us to provide more robust analytics than our competitors
3,000 transactions per second,
24/7/365
Acquiring Merchants
More Transactions
Data spans the most networks and
product sets
Broadest Coverage
Ability to source data directly, and efficiently,
from our own environment
Seamless Integration
Based on 45 years of operating
excellence
Trusted Expertise
leading share in:
#1Banks
6 Million+ 600+
20%+
Business locations Merchant categories
U.S. consumer volume
50%U.S. retail volume
$2.4 TrillionCard volume processed
93 BillionTransactions
Our capabilities position us to provide an end-to-end analytic solution set
Networks
Payment and Card Types
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2018 Payment industry outlook
Top trends
Retailer and
Technology
Partnerships
Augmented Reality
and Virtual Reality
Delivery Changing
Physical Retail
ArtificialIntelligence
Banking
Environment
On-Demand Services
in Physical Retail
Retailers TryingSmaller Stores
Mobile Only
Bank Accounts
RetailDigital Deals
Rental &
Subscription
Services
PSD2
Alipay & WeChat pay
Chinese Mobile Wallets
IoTCollaboration
P2P 2.0
FinTechs Eye
Bank Status
Blockchain
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All trademarks and trade names referenced in this material are the property of their respective owners.
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Retailers – smaller is better?
Retailers testing smaller physical stores Why small-stores?
▪ Response to shifting consumer demands, growing
populations in metro areas, and increased online shopping
▪ Scaled-back spaces can be more profitable
per square foot
▪ Forces retailers to be smarter about inventory and can
serve as a location for online pick up/returns
▪ Allows retailers to tailor product offerings to the local
area, making the experience feel more personal
▪ Overall, retailers are aiming to become a more desirable
place to shop
Sources: Company websites; “How Department Stores Will Re-Invent Themselves in 2018,” CNBC,
December 2017.
In the rise of online shopping, big-box retailers are experimenting with smaller brick-and-mortar stores
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All trademarks and trade names referenced in this material are the property of their respective owners.
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Delivery changing physical retailing
Retailers with Same Day Delivery
16%
51%
Selected Retailers
2016 2017
Changing the Retail Experience
▪ Consumers expect convenience both online and offline
▪ Retailers leverage their local, physical footprint
▪ Developing new services for in-store pick up and fulfillment, delivery
logistics, and real-time inventory management
▪ Pay-off is significant: slows the march of competitors and allows for more
advanced pricing, margin management, and incremental service fees
Delivery Partner Services
of Retailers Offer
3rd Party Delivery
Services
32%+
Acquired by a RetailerSources: “Digital Commerce Survey 2017,” BRP Consulting, 2017; Company websites;
press releases.
Same day delivery is the latest battleground for physical retailers
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All trademarks and trade names referenced in this material are the property of their respective owners.
…to offer home improvement
professionals and advice to customers.
…a marketplace of service providers
where customers can shop for
professional service help.
…to create an omnichannel tech
services platform to provide IT support
services to business customers.
…to strengthen its digital customer
service capabilities and expand its
home goods and installation offerings.
acquires… acquires…
offers… partners with…
On-demand services meets physical retailing
The “gig” economy
(on-demand services)
coming to more stores
near you
6 © 2018 First Data Corporation. All Rights Reserved.
All trademarks and trade names referenced in this material are the property of their respective owners.
Sources: Company websites.
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The rise of rental and subscription retail
The concept gained prominence with startups… …and is now spreading to larger retailers
+
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All trademarks and trade names referenced in this material are the property of their respective owners.
Consumers want value, flexibility, and personalized discovery
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Retail deals for digital
Add digital capabilitiesStrengthen eCommerce reach Connecting with customers
Online shopping
Product selection
Logistics
Mobile
Chat / messaging
Personalization
AR / VR / 3D
Big data
Robotics / automation
© 2018 First Data Corporation. All Rights Reserved.
All trademarks and trade names referenced in this material are the property of their respective owners.
Sources: “The state of the deal: M&A trends 2018,” Deloitte, November 15, 2017.
Increasingly retail and digital/technology are converging
Traditional retailers are turning to startup M&A to catch up on the retail transformation
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Retailer and technology partnerships
Why partner? – If you can’t beat them, join them.
▪ Increase customer traffic and expand online presence
▪ Ensure a position on the next generation of platforms (i.e. voice-ordering, smart home products)
▪ Partnerships highlight retailers’ willingness to increase dependence on shopping and payments technology
Notable new partnerships made between retailers and tech giants:
© 2018 First Data Corporation. All Rights Reserved.
All trademarks and trade names referenced in this material are the property of their respective owners.
Sources: Company websites.
Unexpected partnerships are formed as competition increases, particularly in rise of voice-ordering
© 2018 First Data Corporation. All Rights Reserved.
All trademarks and trade names referenced in this material are the property of their respective owners.
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All aboard for IoT collaboration
Industries working
together through
connected commerce to
reach more households.
RetailersTech
Banks
Auto
Third Party
Developers
Devices &
Appliances
Travel &
Entertainment
Grocery &
Restaurant
Insurance
Content
CONNECTIVITY
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Augmented reality and virtual reality in retail
Augmented Reality: It’s Real
But Virtual
Reality…?
Sources: Warby Parker app; Amazon app; The Verge 10/25/17; “Lowe’s Introduces In-Store Navigation Using Augmented Reality,” Lowe’s
press release, 3/23/17; Dailymail; “VR: The Brands that are imagining a new commerce reality,” Forbes, March 7, 2017.
Two powerful technologies could reshape commerce, but we believe
AR may be the winner
© 2018 First Data Corporation. All Rights Reserved.
All trademarks and trade names referenced in this material are the property of their respective owners.
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Artificial intelligence boosts retail and banking
Trading
Process
Automation
Chat
Bots
Contact
Centers
Fraud
Detection
Loan
Underwriting
Identity
Verification
Personal
Financial Mgmt.
uses AI to target ads to individuals based on what
they are talking about on social platforms.
uses AI-based machine learning to offer consumers
a personalized clothing subscription service.
uses AI-based voice technology in its call centers
to route customer complaints to the appropriate experts.
uses AI to enhance real-time fraud detection and to
increase the accuracy of transaction approvals.
Sample Uses Cases
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All trademarks and trade names referenced in this material are the property of their respective owners.
Sources: Company websites.
Utilizing machine learning and AI to strengthen products and services and streamline operations
Fashion &
Beauty
Recommendations
Chat
Bots
Local
Experiences
Voice-activated
Assistants
Sales
forecasting
Targeted/
Personalized
ads
Promotion
Management
Merchants Banks
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Alipay and WeChat pay
MOBILE WALLET USERS
Undisputed Mobile Wallet Leaders WeChat Diving into MicroPayments Alipay Expanding Throughout Asia
© 2018 First Data Corporation. All Rights Reserved.
All trademarks and trade names referenced in this material are the property of their respective owners.
Sources: Press releases; web sites; China Academy of Information and Communications Technology.
Chinese mobile wallets are forging into new frontiers
600M
529M
210M
87M
60M
WeChat Pay
Alipay
PayPal
ApplePay
Klarna
Tips often range from as little as
$0.15 to $1.50
+10%Of WeChat users have
micro tipped
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Blockchain’s great uphill climb
Enterprises Moving out of the
Research Lab
Technical
AdvancementBlockchain’s Challenges
Blockchain’s Hope
Too often blockchain experiments
are tech solutions in search of a
business problem
Massive speculation in
cryptocurrencies creates noise and
negative connotations
Solving for the fiat currency
on/off ramp
✓ Advancements in speed
(Layer 2)
✓ Development of so-called
“interledgers” to connect disparate
ledgers (bitcoin, XRP)
✓ Flood of capital into cryptocurrency
markets could drive accelerated
innovation
Sources: Forrester: Predictions 2018.
Corporates on the
Hype Machine
80% of Blockchain projects
fail to meet expectations
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All trademarks and trade names referenced in this material are the property of their respective owners.
Distributed ledger gains are being overshadowed by the cryptocurrency hype cycle
P2P Payments to
Exceed $120B this YearZelle Makes
it Debut
Big Banks Show
Major P2P Growth Venmo Now Accepted
at 2M MerchantsUS Bank Announces
Disbursements via Zelle
PYPL Buys Tio
Networks for $223M
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P2P 2.0: In pursuit of financial relevance
P2P 1.0 – Consumer Only, Limited Revenues P2P 2.0 – New Ways to Pay
Businesses Consumer
P2P Apps
Merchants
Billers
© 2018 First Data Corporation. All Rights Reserved.
All trademarks and trade names referenced in this material are the property of their respective owners.
Sources: Press releases
Venmo, Zelle, et al pivot towards merchant and biller payments
First Data® Enterprise Analytics
Campaign Effectiveness
In-store Purchases
Household-level Analysis
Card-based Transactions
Advertising effectiveness
First Data® measures the impact of your ad campaigns using actual payment data
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Measurement process
Household-Level Analysis
Ad Agency
Experian®
First Data® Match
Exposed Devices and
Million Impressions
Matched
Experian IDs
(cardholders)
Cardholders/
Households
Agency to fill #
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Measurement in action: Use case
Control Group
(76,723
households)
Exposed List
(76,724
households)
Households 6,522 (8.5%) 6,105 (7.8%)
New
Customers
(Households)
2,288 (35%) 2,308 (38%)
Transactions 34,367 41,393
Transactions
per Household
5.3 (7.0 for returning
households)
6.8 (9.6 for returning
households)
Total Spend
at Store
$1,812,543
($278 per customer);
$28.9 per exposed
household
$2,218,405
($363 per customer);
$23.62 per exposed
household
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Marketing to look-alikes
Client needed
profiles of their
best customers
in order to acquire
more customers
like them
How can we
acquire more
customers?
Insights
The client’s best customers
were suburban women, 40-50
years old, living within 15 miles
of the a client location, owning
luxury vehicles and having an
interest in international travel
Action
1) Tailored messaging to best
customer audience
2) Purchased lists from local
luxury car dealers to target
their customers
3) Placed social media
messaging to target
international travelers
ResultNew customer visits increased
17%
Potential Opportunity Areas
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Benefits of First Data’s Ad effectiveness service
52%, only 4% are newly-issued cards (that had no transactions in Q4, 2017)
Visibility down to MSA level; share of wallet
calculations; market growth calculations;
new/returning customer spending patterns
Improved ROI
Calculations
Control groups developed based on spending
patterns, geography, and other demographic attributes
More Accurate
Measurement
Independent and aligned with your best interests;
multiple options for delivery timing
Trustworthy,
Timely Results
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