Author Archives: Jennifer Bosavage

by Jennifer Bosavage

Retailers to Customers: Be Our Valentines

Sales personalization is the hot topic for retailers this year. It’s all about making the customer feel special, catered to and favored. The strategy: Offer a Valentine to customers that will last far longer than Feb. 14. But with so many customers, and so much data, figuring out what each one wants from a retail shopping experience seems like a tremendous burden. If so, perhaps you’re not aiming properly.

When developing customer loyalty programs, retailers know they can't take a one-size-fits-all approach to initiatives.

When developing customer loyalty programs, retailers know they can’t take a one-size-fits-all approach to initiatives.

First, identify your Valentine. He or she should be a high-value shopper, someone who comes in semi-regularly but purchases more than just the clearance items. They are customers who you’d like to return more often, but don’t. But they would, if you made them an offer they couldn’t refuse. So analyze your customer data to identify that type of customer, and then ask if they’d like to opt-in to get special offers. Second, don’t ignore the customer who is loyal and has a substantial track record at your business. These are frequently people who spread the word about their favorite spots, and nothing beats word-of mouth advertising. These valuable shoppers are already loyal — shouldn’t they be rewarded for that? Again, your data knows who these satisfied customers are, and you can delight them even more by showing some appreciation. So, ask this group also to opt in Third, give your Valentine what they really want. Oh, but they just won’t come out and tell you? Beacon technology can help with that.  Beacon technology provider Swirl Networks recently released results from beacon marketing campaigns running in retail stores across North America. Swirl analyzed in-store campaign performance data from tens of thousands of shopper interactions and surveyed shoppers who received beacon-triggered messages during a three-month period. The survey found:

  • 60 percent of shoppers open and engage with beacon-triggered content
  • 30 percent of shoppers redeem beacon-triggered offers at the point of purchase
  • 73 percent of shoppers surveyed said that beacon-triggered content and offers increased their likelihood to purchase during their store visit

Beacons offer retailers a way for retailers to understand and quantify what their customers want, and take the guesswork out. And, by asking customers to opt-in, they will feel like part of an exclusive offering, rather than the victim of an unscrupulous marketer. It’s up to the retailers to live up to their end of the bargain: In exchange for consumers’ personal data, businesses must provide valuable information at each touchpoint along the customer journey.

by Jennifer Bosavage

Mobile Payment Fraud Grows, Vexing Retailers

Payment fraud is on the rise, as mobile commerce continues to grow in popularity. According to LexisNexis Risk Solutions’ annual True Cost of Fraud mobile study, m-commerce retailers lost 70 percent more sales to fraud in 2014 than they did in 2013. As the number of smartphone users steadily increases — statista.com estimates that there will be more than 196 million smartphone users in the U.S. by 2016 — fraud will continue to threaten merchants.

Consumers also have privacy concerns about m-commerce.

Consumers also have privacy concerns about m-commerce.

The recent figures equate to m-commerce merchants losing 1.36 percent of revenue overall to fraud, which is a significantly higher percentage than the total retail segment, which lost 0.68 percent of sales to fraud. For the 15% of merchants accepting mCommerce payments in 2014, mobile transactions accounted for just 14% of the total transaction volume — and also for 21% of the volume of fraudulent transactions. Further the costs associated with mobile channel fraud are more than three times the initial losses. So, why are m-commerce seemingly more prone to such misfortune?

One reason is that m-commerce merchants offer more ways to pay. The average mobile commerce merchant has an average of 4.5 payment options for consumers, many more than the average 2.6 provided by all retailers. Mobile merchants, therefore, have more fraud exposure.

The burden is especially heavy because mobile fraud tracking is the responsibility of merchants, and currently it is tracked together with online fraud. Presently, there is no distinction between those two channels. The LexisNexis report suggests, however, that the two be tracked separately: “As the percentage of fraudulent mobile transactions among all fraud is disproportionate to the percentage of all mobile transactions, it is clear that mCommerce comes with additional risk compared to other payment channels. Only when a merchant is able to disaggregate data by fraud channel will it be able to know where fraud is moving and whether or not solutions are working.”

The report also suggests types of solutions that can be implemented to help mitigate the impact of fraud on m-commerce merchants, such as device identification and geolocation. Currently, use rates are low for such online and mobile-oriented fraud prevention solutions. In addition, many retailers can identify the type of fraud they’ve experienced as well as strong potential solutions, but fail to act appropriately on that knowledge: “mCommerce merchants consistently display a disconnect between the fraud they encounter and their awareness and use of solutions. In addition to the specific challenges of mobile transactions, mCommerce merchants experience a high proportion of international fraud, yet they are not likely to use the solutions they believe are most effective for preventing fraudulent internationally-originating transactions.”

Still, the future is not entirely bleak. The researchers found that nearly half of this surveyed (48%) believe that adopting mobile payments is necessary to stay competitive, more than 1 in 3 (36%) plan on investing in this technology to increase efficiency and savings, and more than 1 in 4 (26%) plan on training employees on mobile payment technology.

by Jennifer Bosavage

Anonymized Data Is Not All That Anonymous

Remember “anonymized” data? The kind retail customers felt OK about sharing, because it couldn’t be tracked back to a specific individual? Turns out, according to the very bright folks at MIT, that anonymized is quite different from anonymous.

Current guidelines aren't strong enough to help companies keep credit card data secure.

Current guidelines aren’t strong enough to help companies keep credit card data secure.

Researchers at MIT studied three months of credit card records for 1.1 million people, and the results were published today in the journal Science. For 40% of people, it took only two data points, without price information, to identify a customer. Five data points was enough to ID virtually everyone.

The ability to preserve anonymity in large data sets is important, because aggregated digital data can be a rich source of customer insights. Retailers analyzing anonymized credit-card histories could learn about customer tastes, trend information, seasonal variations and even weekly shopping rhythms. But re-identification is dangerous, and it will make customers less willing to give up any personal information and more likely to pay with cash.

What about coarsening the data, making it intentionally vague? The MIT researchers examined the effects of attempting to maintain privacy while still obtaining some useful analysis. The results were not encouraging. According to MIT News: “Even if the data set characterized each purchase as having taken place sometime in the span of a week at one of 150 stores in the same general areas, four purchases (with 50 percent uncertainty about price) would still be enough to identify more than 70 percent of users.” Therefore, a data set’s lack of names, home addresses, phone numbers or other obvious identifiers does not make it safe to release publicly.

Credit card data has great potential for retailers and should be gathered, but care must be taken to avoid re-identification. But the study does highlight the standard methods many companies use to anonymize their records. And it will certainly add fuel to the fire of those concerned about the consumer-tracking processes employed by advertising software and analytics companies.

by Jennifer Bosavage

Online Still Wooing Customers from Brick and Mortars

Omnichannel retailers will have their work cut out for them in 2015, as they attempt to entice shoppers with both their web and brick and mortar presence in order to compete effectively against online-only stores.ecommerce

A recent study by Wipro found that when consumers browse online and in a store, many opt to ultimately make the purchase online: 34% of U.K. consumers and 33% of U.S. consumers reported purchasing in that manner.

‘There is no doubt consumers are interacting with brands across both the online and in-store channels,” said Avinash Rao, Global Head, Wipro Digital. “But omnichannel retailers are missing a big opportunity to capture the 1/3 of consumers who say they are researching in store but leave to buy online.”

Indeed, online shopping this past holiday season continued to grow in popularity and accessibility, with 71% of surveyed consumers in U.K., and 61% in U.S., reported they did more than half their 2014 holiday shopping online. That is a major uptick from 2013, when just 45% in U.K. and 36% in U.S. reported doing the majority of their shopping online.

The online shopping trend is being driven by three factors: greater convenience, better prices and ease of use. Online pure play retailers are the big winners of this shift: 44% of U.K.  and 47% of U.S. shoppers report doing more than half their online shopping on such sites. What should concern brick and mortar retailers is the finding that a quarter of the shoppers are not even considering bricks and mortar retailers’ websites.

Sounds like retailers need to leverage the one thing they have that those pure play online stores do not: location, location, location.

“Omnichannel retailers need to invest more in understanding and improving the customer experience journey to entice shoppers to spend more with them in-store,” said Rao. “Customer journey engineering as an approach to understanding, designing and delivering relevant and differentiated customer experiences across all channels and touch points will help retailers reverse the trend and avoid a future when consumers are no longer visiting their stores.”

Competitive pressures can be a motivating force to drive retailers to provide a differentiated shopping experience. Ecommerce retailers understand how customers want to shop online and deliver that experience well; brick and mortars need to learn what drives customers to buy from them, and capitalize on those strengths. Further, if retailers can determine the source of dissatisfaction and not just fix it, but turn it around into an enjoyable experience, that can turn consumer indifference into delight.

 

by Jennifer Bosavage

With EMV Coming, Payment Security Becomes Job 1

Payment security is top of mind for retailers this year, according to a study released this week  from Boston Retail Partners (BRP). And, based on the numbers, it seems as though many retailers haven’t paid payment security much attention in recent years: 63% of respondents said this type of security was among their top three concerns, the highest number in the history of the 16-year-old survey.

Part of that commitment to secure transactions has to do with the rollout of EMV, also known as chip cards or chip and pin cards. While widespread in Europe, EMV is just rolling out in the United States. All retailers will be required to have EMV readers available by October 2015, or they face being liable for charges incurred by bogus cards. It is therefore not surprising that retailers are set to jump on solutions securing payment transactions; what is unusual is that the number of retailers planning to support EMV is expected to increase by 650%.

Last year’s seeming epidemic of breaches at several top retailers, in addition to high profile hacking on top of the approaching October 2015 EMV deadline, is giving security this sudden sense of urgency. But chip and pin aren’t the only weapons in the arsenal.

Survey respondents report implementing end-to-end encryption: 35% have already put solutions in place and another 45% plan to implement it by October. Overall, BRP projects a 151% increase in encryption within two years.

Finally, tokenization use will see a hike of 146% during the next five years. Tokenization lets retailers remove sensitive data in flight and at rest from their networks. One-third of the respondents have implemented tokenization for payment processing and another 40% plan to implement it before October 2015. One-third of the respondents have implemented tokenization for payment processing and another 40% plan to implement it before October 2015.

Increasingly, retailers are looking toward modern payment security solutions to protect sensitive customer and organization data. By moving to EMV and encryption in conjunction with tokenization, 2015 may be the beginning of a more secure retail environment.

by Jennifer Bosavage

Location-Based Mobile Marketing Gives Customers What They Want

Customer engagement and retail’s push to “delight” the customer has lead to a re-evaluation of product marketing. Some refer to that by the cringe-worthy term, “marketeering,” but really it’s old-fashioned clienteling: The act of knowing the customer well enough to promote relevant products or services.

Internet of Things may shape future of ecommerce

Using geo-location, retailers push promotions to shoppers based on proximity.

Although clienteling has been practiced since the dawn of retail, today’s technology offers an abundance of riches in terms of relating to customers. Retailers have been collecting data for years, but only recently have tools emerged that lets them make sense of it. By analyzing that information, retailers can effectively take control of their revenue streams. For example, retailers can take specific information about their shoppers and provide targeted, intelligent offers, as well as time-sensitive notifications, to attract customers. Using that in combination with GPS and iBeacon geolocation technology, is the next step, and it’s coming.

Virtually every retail customer walking down the street or in a mall has a mobile device, but few retailers are taking advantage of that ready-made platform. Solutions such as those from Mowingo and iSign use geo-location to identify the proximity of shoppers before pushing out a notification. In conjunction with that, they create unique customer profiles that aim to send appropriate content.

Context is critical, which is why geo-location and profiling go hand in hand. It reduces the likelihood, for example, of a man getting a text informing him of a flash sale on stockings when he is in the ladies shoe department — following his wife.

These solutions tend to boost loyalty for retailers too, because customers feel like a valued part of the retailer’s community. To compete with Amazon, retailers need to leverage their community location, and providing special, personalized promotions is one way of achieving that goal. Those promotions might include coupons, or VIP events.Going back two or three years, retailers discounted how much customers enjoy coupons; to many shoppers, coupons can be perceived as a sort of validation that they are special, valued, etc., a type of “insider” reward. Once customers feel that they are part of an exclusive club, they are more willing to provide personal information because the value proposition is attractive.

For retailers considering incorporating location services, a best practice is to explain to customers what’s in it for them: “By using your location, we will provide a better service, and reward you for your loyalty.” For some, discounts will be the driving factor to get them into a store. For others, it’s about the sense of community. Reminding customers about options (communication) and offering them specials (discounts) are both effective. Over time, you will  learn which customer needs what amount of encouragement to win their business.

 

by Jennifer Bosavage

Mobility, NFC, Boost POS Market

Last week’s National Retail Federation’s Big Show showcased many advances in point-of-sale terminals. Transaction speed, efficiency and accuracy are offered in different shapes and sizes destined to meet the needs of every retailer. Propelling that market’s growth is the desire of retailers to upgrade equipment to enable adoption of near-field communication technology for payments, according to a new study by Grand View Research. The dramatic popularity and subsequent growth of the NFC-based smartphone category, in addition to increasingly affordable wireless communication technologies, will continue to influence the mobile POS terminal market.  According to the report’s authors:

Mobile POS (mPOS) systems give customers convenient options for checking out in the store and can provide employees with additional information to assist shoppers.

Mobile POS (mPOS) systems give customers convenient options for checking out in the store and can provide employees with additional information to assist shoppers.

“mPOS terminals are expected to replace the current transaction and payment techniques owing to their improved features such as mobility and better user experience. They allow sales and service industries to conduct financial transactions remotely for improving customer experience. Mobile POS terminals have low initial cost as compared to their traditional counterparts leading to increasing demand from SMBs. Retail and hospitality sector have experienced significant growth in demand for mPOS solutions, driven by increased need for customer analytics features and high ROI.”

The researchers also found that the ease of use and improved return on investment offered by those newer systems has favorably impacted the market. Increased demand for mobile POS terminals such as smart card EFT (Electronic Funds Transfer) is also estimated to stimulate the market. Advanced POS systems are more durable and reliable than their ancestors (aka, cash registers), resulting in significant reduction in total cost of ownership (TCO), making them a hot ticket for small and midsize businesses, which are always trying to maximize cost efficiencies.) Further, the introduction of chip-embedded payment cards and personal identification numbers have minimized security concerns pertaining to sensitive data theft, which is also expected to augment POS terminals market growth. The global POS terminals market was valued at more than $30 billion  US in 2012; the POS software segment is expected to surge in the near future due to increased demand from retail businesses, in large part. In fact, the study found that retail is expected to remain the major market segment during the next six years.

by Jennifer Bosavage

NRF Retailers: Could Brick Be the New Black?

Is brick really the new black? At the NRF2015 Big Show this week, it seemed that way. JDA Software was one of several vendors that focused presentations on how retailers can reposition brick-and-mortar stores as the center of the new customer experience.

To remain competitive with online merchants, brick-and-mortar stores are adjusting their practices to create memorable customer experiences.

To remain competitive with online merchants, brick-and-mortar stores are adjusting their practices to create memorable customer experiences.

Today’s customers, particularly Millennials, are always “on,” and that has caused retailers to react accordingly. Connectivity between online and brick and mortar outlets, for example, is quickly becoming a “must-have.” Although e-commerce use is commonplace, brick and mortars also have a spot in the retail ecosphere. An NRF panel entitled, “Brick Is the New Black,”  Chairman and CEO of JDA Software Bal Dail, President of Levi’s Brand James Curleigh, former CEO of Walmart U.S. Bill Simon, senior partner at brand agency Lippincott James Wright, discussed strategies to meet the wants and needs of tech-savvy customers. The panel’s conclusion? Retailers can leverage brick and mortar environments to thrive in today’s dynamic retail landscape despite the rise of online shopping and omni-channel. Partly this is being accomplished by creating more interesting in-store experiences, and partly by encouraging customers to use online technology to facilitate in-store pickup.

“The death knell for brick-and-mortar was premature. Physical stores remain at the emotional and financial core of today’s retail model and can be leveraged to engage and delight the new boss and deliver real profit and brand equity,” said Wayne Usie, senior vice president of retail industry strategy at JDA Software. “However, retailers need to act now to evolve their processes and capabilities to capture the potential that the new boss holds, or risk losing this fickle customer to a competitor.”

Melding the online and physical worlds with strategies such as “BOPIS” (buy online, pick up in store), also referred to as “click and collect,” help brick and mortars attract customers who are comfortable with e-commerce, particularly the Millennial set. Such customers can browse and comparison shop quickly and efficiently online, and then go to the physical store location for the “look and feel” experience, and, finally, to take delivery of the product. Of course, to be successful, inventories need to be in perfect sync to avoid customer frustration and disappointment.

Sometimes, however, a little pocketbook persuasion is necessary to rout them from behind their screens: A recent study by Parago said that 80% of shoppers would BOPIS for a $10 rebate on a $50 purchase. That’s a hefty 20% discount. However, if a brick and mortar store can entice a customer to buy more merchandise when he or she comes to retrieve the original order, it may be well worth offering the incentive.

Have you implemented click and collect? If so, let us know in the comments how it’s going, and whether customer’s shopping baskets increase once they are in the physical store. If you haven’t yet implemented click and collect, let us know why not.

 

by Jennifer Bosavage

3 Ways To Drive an Extraordinary Customer Experience #NRF

What will retailers focus on in 2015? That’s the big question at the National Retail Federation’s Big Show, taking place this week at the Javitz Center in New York City. For many, the driving force this year will be to provide an extraordinary customer experience, and that means investing in technology. From electronic shelf labels, to fitting rooms to electronic shelf labels, technology will power the evolution in how retailers approach and interact with their customers.

Retail industry leaders are driving changes to enhance the customer experience across their channels.

Retail industry leaders are driving changes to enhance the customer experience across their channels.

Take electronic shelf labels. LG Innotek, introduced customized ESL solutions for various retail outlets at NRF 2015.  Electronic Shelf Labels are just a small part of the burgeoning Internet of Things (IoT) solutions market; LCDs and electronic paper provide shoppers information on product price, sales promotions, etc. The integration of ESL lets retailers manage the price of all the products in a store, and helps in real-time tracking inventory status. Customers can check on product information and easily find the product as the ESL communicates with their smartphones. ESL can also process the order, payment, and delivery on site.

Once a customer has made a selection, the next stop is often the dressing room. MemoMi’s MemoryMirror is a digital mirror that rolls video, 360-degree viewing and social networking into one high-end retail package. The product itself debuted at last year’s Big Show, but it’s here at the 2015 show again, promoting its alliance with Neiman Marcus and its roll out at the luxury store’s Walnut Creek, Calif., outlet. The MemoryMirror is designed for in-store clothes shopping, capturing stills and video of everything the customer tries on. It’s not in the dressing room — that was deemed too creepy — but is located right outside, in a common area. Using simple body gestures, or via a companion mobile app, the mirror can be controlled to see 360-degree back and side views, observe outfits side by side, and change the color of the clothing. For retailers, the MemoryMirror can gather shopper data by measuring and analyzing in-store behavior.

Finally, after the customer has gathered and tried on his or her items, it’s time to check out. Increasingly, retailers are employing new POS systems to ease that friction point. Whether it’s checking out via an app, through an associate with at tablet, their own smartphone or a traditional POS, consumers today are demanding a seamless, easy payment experience.

At NRF 2015, Retail Pro is demonstrating its comprehensive and flexible software that is aimed at helping retailers evolve their omni-channel strategies. Mid-market and global brands alike can create consistent, impactful customer experiences at every touch point with brand-conscious POS and web-based applications accessible across devices: Ease of use combines with insightful data analysis.

Retail Pro International will be showcasing its retail management software at NRF 2015 through January 13, in booth #1503.

 

by Jennifer Bosavage

Mobile Payment Hits the Big Time

Mobile payment is quite likely to be one of “the” big topics at the NRF Big Show, which starts  Sunday in New York City. Just as “omnichannel” and “customer-centric” were the focus of previous years, it’s a safe bet that mobile payment solutions will be a dominant player at the Javitz center next week.

Retailers need to embrace mobile payments.

Retailers need to embrace mobile payments.

A recent study conducted by Wakefield Research during the holiday shopping season found that most of the respondents were interested in paying for purchases at physical store locations with their smartphones. Fifty-three percent responded that it was important for more stores to install devices that let consumers pay with their devices, which seems to suggest that there is a willingness to pay via this method but the option is not always available. Age also seems to be a factor; 64 percent of respondents who were younger than 40 seemed most eager to pay using a mobile phone.

A few large retailers have implemented the technology needed to make mobile payments a reality for these shoppers, or they have announced plans to get on the bandwagon. That kind of publicity will further help speed user adoption. BI intelligence forecasts that US mobile payment volume will grow at a five-year compound annual growth rate of 172%. Apple Pay has seemingly lit a fuse: In just the month after it debuted, payments made through the feature comprised between 0.1% and 1.6% of transactions at five top retailers, according to BI Intelligence, which characterized that rate as “exceptional momentum.”

For mobile payments to become a viable option for consumers, not only must retailers invest in new hardware and software, but consumers must also be educated in what benefits the technology offers, as well as how information is protected. More than half of the Wakefield respondents (56 percent) said they would continue shopping at a store that had suffered a credit card information breach; however, the number of consumers who were less likely to continue shopping at such a store was still a significant 44 percent.

Retailers ought not miss the opportunity to educate customers on mobile payments — it could afford them the opportunity to continue to build a trusted relationship with the consumer, and there are substantial benefits for both parties using mobile payment technology. Among the top advantages to using smartphones instead of traditional payment methods cited in the Wakefield research:

#1 – Speed of use (34 percent)

#2 – Freedom from carrying a wallet (29 percent)

#3 – Access to mobile deals (24 percent)

#4 – Ease in tracking spending (23 percent)

#5 – Safety of personal data (18 percent)

The last is a critical point. Eighteen months ago, a Federal Reserve study noted that 42 percent of consumers were concerned about data security, and that concern was the most cited reason regarding why consumers have not used mobile payments. While consumers may have been skeptical about the security surrounding mobile payments, many (particularly Millennials) are concluding that with today’s technology, mobile payments might, in fact, be more secure than credit cards — even those with chip-and-pin technology. Ironically, secure mobile payments may, in fact, take off because of the recent spate of credit card hacks.

Certainly, there will be plenty of mobile technology to check out at the Big Show. See you there.