As changes in consumer behavior are reshaping the retail environment, brands and retailers are making investments in technology to help improve the overall consumer shopping experience. This includes machine learning, artificial intelligence, mobile commerce and digital marketing — all of which are evolving as these solutions are deployed “in the field.”

At the point of sale, payment technologies are also evolving as the demands of consumers shift. Here, Joe Mach, president of North America at Verifone, discusses the role of personalization and customer engagement in today’s retail market and offers insights into POS payment trends.

WWD: What role does personalization play in replicating the e-commerce experience inside a physical store?

Joe Mach: Industry data states that 41 percent of consumers expect offers that are personalized and relevant when they walk into a store. With regulatory advancements, technological growth and generational forces constantly changing the landscape, it is important for merchants to turn these challenges into opportunities and cater to the evolving needs of the connected consumer. Retailers are struggling to compete with the growing popularity of e-commerce because consumers have grown accustomed to the convenience, simplicity and security of the online shopping experience — they want the same features in-store. To accommodate consumers’ changing preferences, tactics must change.

Joe Mach

Joe Mach  VeriFone

WWD: And that requires higher levels of engagement via personalization?

J.M.: Merchants can effectively engage with their customers if they know them better and offer each one a unique and personalized shopping experience. Personalization can create a strong one-to-one relationship between the retailer and the shopper, keeping the shoppers coming back to their favorite store each time, owing to familiarity of needs and wants. Also, as opposed to personalizing based on prior behaviors and expected shopping habits, targeted campaigns can be based on external factors. Timely events and seasonal conditions in specific geographies can provide fuel for personalized campaigns and messages.

With new technology, retailers can provide personalized recommendations to online shoppers based on their past purchase history, through targeted offers and discounts and via one-to-one e-mail marketing. This offering enables retailers to guide the shoppers down a path to not only give them exactly what they’re looking for, but also expose them to new options that they didn’t realize were available to them.

Per a report by the Seurat Group, more and more Millennials are entering the workforce every year, and by 2020, they’ll represent more than 40 percent of consumers in the U.S. Thus, their buying power is increasing. Industry research also shows that, rather than trips to just make purchases, shoppers are drawn to in-store experiences that are digitally connected. For younger generations, the purchasing experience tends to supersede the purchase itself.

Enabling merchants to create an in-store experience to write home about (or post on social media, rather) is an excellent way to help them stay relevant while attracting and retaining more customers. For example, merchants can engage consumers with fun and interesting digital ads (“pop-ups”) right at the point of sale, at the table or on a customer’s mobile device, using beacon technology.

WWD: What’s driving pure-play e-tailers into building brick-and-mortar stores? Why is it important for their brand?

J.M.: PwC expects a 25 percent increase in digital sales and mobile shopping; the physical store remains king of retail. Despite predictions of brick-and-mortar’s decline, almost 90 percent of retail sales in the U.S. are represented by brick-and-mortar locations. So it’s clear that the reign of the physical retail environment is far from over – it’s just a matter of making the experience in-store similar to the one online.

While there is news of some retailers closing stores around the U.S., there are announcement by online brands about taking the next step in their growth journey and opening physical stores. This is because apart from enjoying the ease, simplicity and convenience of online shopping, consumers enjoy the ability to see, touch, feel, try on products, and take them home immediately. Easy returns is another reason for shopping in stores versus online. Keeping some of these factors in mind, many retailers are now offering the click-and-collect option, enabling customers with the ease of shopping online and the immediate gratification of picking it up at their earliest convenience at the nearest store.

The future of retail needs a truly blended approach between online and in-store. Customers are shopping online [including on their phones] more than ever, but people still crave in-person experiences and interactions.

WWD: As the convergence of online and in-store continues to evolve, how will the traditional payment ecosystem change? What do retailers need to do to stay in step with these changes? What investments are needed?

J.M.: The introduction of new consumer-facing technology is constant, and as new apps and digital payment methods come about, consumers will demand the option to use them in the physical store. It is important for merchants to tear down the silos between their online and physical storefronts. Connecting both channels can provide them with access to the advanced consumer data and analytics needed for better targeting, consumer insights and personalization across all customer touch-points.

Payment device cloud connectivity can expedite the merchant’s ability to access popular business and consumer apps at the POS. By leveraging app marketplaces and developer toolkits, proprietary and third-party apps can be developed, tested and ultimately accessed from smart payment devices. Benefits range from improved customer loyalty via points programs or geo-targeted offers inside the store to tailored incentives based on online purchases at the POS and improved inventory management via e-commerce and legacy system integration.

Bluetooth Low Energy, 3G/4G and Wi-Fi connectivity combined with mobile or portable POS devices allow merchants to extend the POS beyond the counter and throughout the store. These technologies help reduce the time customers spend in checkout lines while creating a more one-on-one, transformed shopping experience. Additionally, restaurants can offer diners “pay at the table,” which is a more secure and convenient way to pay their bill right at the table. Merchants want to be empowered to try out new technologies as they emerge so they can securely experiment to find new value and revenue opportunities.

WWD: But with these opportunities come challenges, correct?

J.M.: Integrating online and physical storefronts in a way that is consistent and seamless from the consumer’s point of view is easier said than done, considering the complexity and ever-changing nature of technology, apps and regulation – not to mention the limited bandwidth of IT resources. Fortunately, payment technology offers a solution for merchants to overcome these obstacles. Recent innovations in this space have catapulted POS technology far beyond merely “payment acceptance.”

For example, one of the country’s top 10 quick-service and fast-casual restaurants wanted to further expedite the ordering process for customers. They have successfully implemented a system that integrates online and in-store experiences by designing an easy and convenient way for their customers to order online and pick up at the store. They also added self-serve kiosks at their restaurants to allow guests to conveniently customize and order their meals. With the capability to engage with consumers and enable payments through kiosks, mobile and web, they are on track to surpass one billion transactions by the end of 2017.

The Keg Steakhouse + Bar is an example of a full-service restaurant chain offering pay-at-the-table service to enhance their guests’ experience. Servers are able to close the bill transaction right at the table so guests experience secure, efficient payment and convenient service.

These are just some examples of the extent to which payment technologies have evolved. Payment devices no longer just accept payments; they are now powerful business solution tools that enable merchants to create innovative and future-ready shopping experiences for the connected consumer of today.

For more WWD business news, see:

When a Seam Is Missed, Darn It Steps In

Amazon, Wal-Mart and Apple Top List of Biggest E-commerce Retailers

M Gemi Builds Business on Consumer and Supply Chain Fit

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