Forrester talks success with customers in a digital world:
‘Digital predator’ or ‘digital prey’ – which will you become in 2017?
The age of the consumer is upon us, and retailers will either succeed or fail, based upon their ability to adapt to new technologies and customer expectations. This was the topic of a recent webinar co-hosted by Brendan Miller, principle analyst at Forrester Research, and Sayid Shabeer, vice president of merchant product at Vantiv.
“At Forrester, we refer to companies that succeed at digital transformation as ‘digital predators,’ while those who fail, as ‘digital prey,’” explained Miller. “More web retailers are struggling to find growth, consumers are spending less, and there is anxiety we are headed for another recession.”
To address these issues, Miller said retailers need “a strategy in a digital world, not a digital strategy.” Before delving into the specifics, Miller noted that retailers must first establish a foundation of security– and many are doing just that. A survey of retail CIOs revealed that 77 percent are currently prioritizing security by strengthening monitoring and security capabilities to protect customer credit card and personal data.
With security as a foundation, Miller said retailers can then focus on four ways to make payments a key component to their digital strategy. Let’s take a look.
From the introduction of self-checkout in the early 2000s, to the new mobile apps that facilitate order ahead and pay at table capabilities, mobile has become a major player in changing consumers’ payment expectations. Forrester Research forecasts the size of the mobile payments market to more than triple in the next five years. But instead of focusing on apps, retailers now need to shift their attention to mobile browsers.
“Mobile represents the best opportunity to reach customers in that moment of need,” said Miller, who pointed out that while many merchants do not have apps, they do have a web presence.
With consumer preference split between the app and the mobile web, retailers need to deliver an improved mobile web checkout experience and make it more app-like. They can accomplish this by implementing wallet options on the product page, easy login options on the cart page, autofill capabilities for address and card number, and scan card options.
“Look at what companies like Walgreens are doing,” said Miller. “Retailers need to borrow these ‘mobile moments’ (like geolocation) to drive consumer engagement.”
The number of consumers engaging in omnichannel experiences has increased. In 2016, 49 percent of sales paid for in a store were influenced online, according to Forrester Research. But what’s the key for retailers to capture these sales?
“Great payment experiences require excellence in execution,” said Miller. “And omnichannel means getting returns right.”
Consider the retailer who accepted a return in-store for an item bought online, only to inform the customer that credit would be issued by the central warehouse which requires 1-2 billing cycles to post. Retailers need to address this type of consumer pain point.
“Omnichannel is not only about selling across channels, but also servicing those channels,” noted Miller, who added that the transaction needs to be frictionless, any way it’s conducted.
What can retailers do? Retailers must have the payments technology in place that allows their POS to work across the entire customer experience of shopping/buying/returning. Retailers must meet consumer expectation of speedy delivery, and make returns customer friendly across all channels.
eCommerce is growing globally – Forrester Research points to 9.4 percent growth in the U.S., 8.3 percent in Latin America, 11.2 percent in Western Europe, and 14.3 percent in the Asia Pacific region. eCommerce companies that offer localized payments across a region are the most successful, and the key to converting buyers in other countries is to accept an array of payment types.
To counter the scope that can accompany a global expansion effort, Miller said retailers should take a phased approach. The first phase is to assess the opportunity (i.e. ship globally from a domestic site); second is to establish marketplace storefronts in the desired region; third is to establish a regionalized site with local distribution; and fourth is to focus on localization through language, currency and payment methods.
Sayid Shabeer pointed out that payment providers like Vantiv can help with this phased approach to globalization.
“One size does not fit all, and we see this in our merchant base,” said Shabeer. “We meet merchants where they are and help them grow to where they need to be in order to reap the rewards of their globalization investments.”
Analytics and insights
When Forrester asked what solutions their payment provider(s) can improve upon, retailers noted their top areas of concern were more customer insights and business intelligence (60 percent), and improved authorization rates and reduced declines (40 percent).
“Analytics present an area of great opportunity for retailers and transactional data needs to be part of retailers’ customer insights programs,” noted Miller. But merchants are challenged by concerns about security and compliance, the technology required to capture the data, and the impression that they are already capturing all the information they need through their loyalty program.
This is where a trusted payments partner can be most beneficial.
“Vantiv has invested in insights, and there is a renewed focus on investing in data products as well as increasing approval rates,” said Shabeer, adding that these capabilities will help merchants deliver the experience their customers expect.
In closing, Miller and Shabeer noted five tangible things retailers can do to succeed in the age of the digital consumer:
- Build on a foundation of risk reduction
- Focus on streamlined and frictionless mobile user experience
- Embrace new partners and technology that can accelerate global sales
- Adopt omnichannel practices by integrating payment processing systems across the enterprise
- Lean on your payment processor as a source for analytics and customer insights