Is Retail Ready for a Cashless Society?
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Evaluating retail's top 5 mobile and digital trends.
Transcript of Is Retail Ready for a Cashless Society?
- IS RETAIL READY FOR A CASHLESS SOCIETY? Evaluating Retails Top 5 Mobile & Digital Trends Sponsored by White Paper Sponsored by
- VendHQ / WHITE PAPER IS RETAIL READY FOR A CASHLESS SOCIETY? CONTENTS Executive Summary.................................3 1. The Omnichannel Imperative...................3 2. Mobile Payment/Mobile POS...................6 3. Digital Wallets...........................................9 4. Digital Currency......................................12 5. Social Commerce...................................14 Conclusion..............................................16 About VendHQ........................................18 About PayPal...........................................18 About Retail TouchPoints......................18 2
- VendHQ / WHITE PAPER IS RETAIL READY FOR A CASHLESS SOCIETY? It costs U.S. households $43 billion a year to handle cash, between fees, time, and theft. The tally is even higher for businesses: $55 billion, accrued through administrative costs, and most especially, retail theft. Government is on the hook for $101 billion. Altogether, cash costs the U.S. $200 billion a year, according to September 2013, research by Tufts University, The Cost of Cash in the United States. Online shopping and mobile technology are driving the retail industry toward a potentially cashless business model. A report by Javelin Strategy & Research found that in 2011, just 27% of all point-of-sale purchases were made with cash, and that is expected to drop to 23% by 2017. Just 40% of consumers currently carry $20 or less in cash, according to the 2014 Future of Retail Study, from Walker Sands, and 40% shop online at least once per month. What does this mean for the future of retail? Is the retail industry ready for a cashless reality? To be sure, cash has its value and its fans. But significant trends underway in retail are largely incompatible with cash transactions, together suggesting that in our increasingly digital, mobile world, cash may be on its way out. This white paper outlines the 5 key trends moving todays retail industry and includes a call-to-action for each: 1. The Omnichannel Imperative 2. Mobile Payment/Mobile POS 3. Digital Wallets 4. Digital Currency 5. Social Commerce Cash costs the U.S. $200 billion a year. Tufts University TWEET THIS 3
- VendHQ / WHITE PAPER IS RETAIL READY FOR A CASHLESS SOCIETY? 1. THE OMNICHANNEL IMPERATIVE Shoppers want a consistent brand experience from the couch to the checkout. In response, retailers are working to sync information across all channels to provide personalized offers and flexible order/deliver options. That means the call center, the retail store as well as online and mobile apps are seeing and working off the same centralized data and applications to get a 360-degree view of the customer. According to Corporate Attitudes and Adoption Trends of Multi-Channel and Omni-Channel Marketing, by Platt Retail Institute, Firms that fail to adopt an omnichannel marketing (OCM) strategy risk losing their customer relationships. However, viewing this as a strategic opportunity can lead to competitive advantage for skilled marketers by ensuring that all consumer touch points have seamless interoperability to deliver a consistent brand and shopping experience. 41% of consumers said quick and easy payments influenced their purchases when shopping online and mobile. Accenture TWEET THIS Meeting consumers needs seamlessly across channels is key. Look for solutions that provide: The ability to easily transition from online to mobile to the retail POS; A full array of payment choices, including credit, debit, gift card, check scanning, and PayPals fast processing speed; and A 360-degree view of customer data across all channels, easily accessible to all employees, from HQ to store managers. 4
- VendHQ / WHITE PAPER IS RETAIL READY FOR A CASHLESS SOCIETY? A significant part of this effort is creating frictionless payment. Retailers want customers focused on the thrill of the purchase, not the mechanics of the payment process. For many, that means moving to omnichannel payment: Making the experience identical across channels. To attain this, retailers need POS systems that offer the same customer interface and options and the same steps to pay no matter the channel. Research by Accenture found 41% of consumers said quick and easy payments influenced their purchases when shopping online and mobile. PayPal is leading the pack when it comes to helping retailers accommodate the changes in how consumers shop. Today, consumers can access their PayPal accounts online, via mobile technology and use their PayPal account to pay at the POS in the retail store. Businesses can accept a PayPal mobile payment or swipe a U.S. credit card or debit card for a 2.7% transaction fee. PayPal also supports merchants different needs from multi-location solutions to inventory management and is collaborating with top POS providers to bring innovative payment solutions to businesses. 5
- VendHQ / WHITE PAPER IS RETAIL READY FOR A CASHLESS SOCIETY? 2. MOBILE PAYMENT/ MOBILE POS A significant step in making payment frictionless is to bring it to the customer, rather than forcing the customer to the payment device. This can involve equipping associates with mobile devices as well as enabling customers own mobile devices to transact a payment. IHL Group estimates that approximately 45% of retailers are adopting mobile devices in stores. There is a widespread sense among retailers that mobile payment is essential to the seismic changes underway in retailing. In Boston Retail Partners 2013 Retail Technology Study, 45% of retailers called providing customers with mobile and checkout important or very important. A separate study by Walker Sands found that 59% of consumers would be more likely to shop at a store offering the ability to self- checkout on a mobile device. Mobile payment is quickly emerging as a must to satisfy increasingly demanding consumers accustomed to the ease of doing business online and expecting an equal experience in stores. Its also a great option for retailers looking to rapidly deploy pop-up stores. Cash management is always an issue, particularly at theme parks, where you have to store it, get it to the bank and deal with loss prevention, said Steve Taitoko, COO of Magic Memories, a souvenir photo concession operator. The sooner we can move to cashless the better. Approximately 45% of retailers are adopting mobile devices in stores. IHL Group TWEET THIS 6
- VendHQ / WHITE PAPER IS RETAIL READY FOR A CASHLESS SOCIETY? RSR Researchs The Impact of Mobile in Retail: Benchmark Report, December 2012, put it this way: Now is the time to be experimenting, even if only in small- format pilot programs to unearth new ways to delight the mobile consumer. A number of solutions have emerged to execute mobile payment, such as using barcode scanning, near field communications, and cloud. PayPal, for example, leverages the cloud, and is collaborating with a number of leading POS providers to integrate its mobile solution. PayPal also has unveiled its own consumer mobile app designed to make transactions simpler and a lot more fun for consumers, like receiving special retail promotions, paying by photo check in via the mobile app, order ahead, and ordering and paying right at the table. The combination of a mobile platform and a flexible payment partner, such as PayPal, enables retailers to get POS solutions that are tailored specifically to their needs. Convenient, mobile payment is critical for Magic Memories, which operates a souvenir photo concession at more than 100 global attractions. Associates have approximately 90 seconds to present photos to guests and complete the sale. A tablet solution that offers a fast, integrated payment solution is a must, said Steve Taitoko, COO of the New Zealand-based retailer, which chose POS software from Vend to meet these requirements While Magic Memories will accept it, Cash management is always an issue, particularly at theme parks, where you have to store it, get it to the bank and deal with loss prevention. The sooner we can move to cashless the better. When selecting a mobile payment solution, look for: Tight integration between the POS and payment processing software; its important that both are part of a full payment ecosystem; Fast processing speed; Solutions that protect retailers by complying with PCI; Solutions built on knowledge of payment requirements in all countries where you will sell; Robust wireless connectivity; A solution partner offering a wide array of mobile options that can be tailored to specific business needs; Click here to access a free trial of Vend. A payment brand partner such as PayPal that your customers already trust. 7
- VendHQ / WHITE PAPER IS RETAIL READY FOR A CASHLESS SOCIETY? A mobile device is a great tool, but it takes a full solution including software, payment and the right vendor to really make it work for a business. Thats the lesson Boating in Boston learned over the past six years as it tried different POS systems at its 12 locations. The company operates boating concessions in public parks, far from any wired connection, so wireless connectivity and an easy-to-learn interface are key. To help the companys part-time seasonal workforce succeed during the May to October season, Boating in Boston sought a vendor that could tailor the software to its needs. We like Vends cloud model