Connected payment flows, the transformation of Big Data into Smart Data and a consistent customer-centric approach – e-commerce has been doing all that for quite some time already. The moment has come for brick-and-mortar retailers to catch up and keep pace with the competition.
It is reminiscent of the early days of electricity: A period when society doubted certain technology before it recognized its benefits for the entire population. We can observe a similar situation happening with digitization nowadays. Some might view it as a threat or a new kind of competition that is forcing industries to review their foundations – but in my point of view, digitization presents a massive opportunity for all industries, strongly outweighing the potential risks.
What does this mean for the brick-and-mortar retail world?
Online giants such as Amazon or Alibaba set a tone for retailers to strategically implement efficient digital solutions. Physical retailers must start the integration of essential success elements used by e-commerce companies to understand their customers better and be able to accompany them individually on a digital journey. Only in this way a systematic customer-centric approach can be implemented effectively.
Why digitization won’t wait.
Retailers waste a massive potential when they rely entirely on a payment structure centered on the Point of Sale. For a vast majority of businesses, this is still the status quo. Purchases made in-store, and those that are done through online or mobile are often processed separately from each other. This leaves shop-assistants uninformed about the purchase readiness of their customers and does not allow the creation of a truly personalized marketing.
Collecting and processing data from all payment streams plays the dominant role. At the moment, retailers can – at the very most – learn from their existing backend systems how many purchases have been made, where, when and via which payment method (such as debit, credit cards or alternative payment methods such as PayPal or Alipay). What is still lacking is the ‘operating system’ for retail that seamlessly integrates the purchase channels, payments and customer engagement. This operating system will not be a single piece of software, but a network of applications that run on a cross-connected, intelligent platform.
In the near future, customers will be able to directly find the desired product via their smartphones, scan the price tag and pay on the way out of the store. This solution will not only render the checkout as we know it to disappear; rather, it will also enable other options such as personalized pricing points.
How does this work?
Retailers will need to build a central, digital platform where all data across all sales channel is uploaded – online, mobile and in store. We call this “Connected Commerce” at the electronic Point of Sale (ePOS) that enables merchants to provide customers with tailored digital offers, personalized discounts, remind to pick up a complementary product (i.e offer to buy milk after placing muesli into the shopping cart), and, finally, ask the customer whether they prefer to take everything with them or if they wish a home delivery to be arranged. This does become a reality when companies decide to cooperate with the partner that provides the digital financial technology with acquiring and issuing services from a single source, i.e. acceptance and issuance of payment methods in addition to secure, rapid payment flow management. In one of the latest retail collaborations with Breuninger, Wirecard started the omnichannel strategy implementation by enhancing Alipay and Wechat Pay in the existing PoS infrastructure. Moreover, Wirecard has designed a high-performance, customer-orientated app solution to transform Big Data into Smart Data – thereby allowing any retailer to take exactly the right steps in real time to consistently pursue a customer-centric approach.
In the very near future, it will be possible for physical retailers to use the wealth of incredibly insightful data extracted from each cashless transaction, not only to catch up with the online retail but also to far better understand and retain existing customers as well as gaining new ones.
