The world of payments has become both an exciting and chaotic place to be. After the change from cash to card, the industry slowed down and got comfortable. Now though, things have been shaken up thanks to the smartphone and alternative payment methods – but what does this really mean for retailers? And how can they make the most of this new world of payments and ensuring that they're catering for what their customers want?
At Europe's Customer Festival, the ever entertaining and enlightening Dave Birch from Consult Hyperion sat down and spoke to Alex Murray, manager of web & multichannel development at Waitrose, to talk about what Waitrose is doing to ensure customers are getting the payment experience they want.
First and foremost, this wasn't your average debate. Dave was really playing the devil's advocate, making sure that Alex had to account for everything he claimed. While it was made clear that Dave wasn't going to turn the screws too much – after all, he uses Waitrose as his local shop and has a My Waitrose loyalty card and genuinely enjoys the shopping experience – he certainly gave Alex a hard ride.
And it's because of this that the first point came out rather clearly. Waitrose believe that above all else, consumers want security from their payments system. It doesn't matter if you're offering them a million and one ways to pay, if for one second they feel that it's not secure enough, they won't use it.
Naturally Dave disagrees with this. Not only does he generally believe that people don't have their card information taken very often, he holds an impromptu – and highly unscientific – poll in the room. A few hands go up, but not many. Instead, he sees Credit Cards as the answer. You have that information taken; it's not really your problem – just cancel the card and the bank/card issuer has to deal with the rest. Although, this is a little different with a debit card, but Dave doesn't see why people would opt to use one of those over a credit card.
Of course, debit cards are the retailer's dream – an instant injection of money, none of this waiting around malarkey for a credit payment to clear.
But is this what customers want? After all, that's really all the different payment services should concern themselves about. Why would anybody use a system that didn't work for them?
Perhaps, but what really matters is giving people access to payment methods and letting them discover why they're so handy.
Having been asked what his favourite payment experience was – Waitrose aside – Alex answered Marks & Spencer for their train station M&S Food stores and the use of NFC. He never really saw the attraction to NFC until then. Running for a train, yet needing to grab food, NFC payment meant he had paid in less than 20 seconds and was off to the platform in time. Dave's came in the form of the KFC app, which allowed him to order, pay and then collect in store painlessly.
It's interesting that both of these payment âhighlights' do away with the feeling of making a payment at all. It's utterly masked by the seamless nature of play.
Could this be the direction in which we're going? And what is Waitrose doing with this technology?
Well, while Alex admits that Waitrose hasn't gone for the full-scale NFC roll out despite his love of the model, he points out that they have tested it in some Little Waitrose convenience stores. It's here that they perform best as the busy younger shopper wants to get in and out quickly. In some of the larger stores, it'd be pointless to have them due to many people having bigger, longer shopping experiences.
As Alex went on to point out, larger stores tend to be visited by an older demographic. Some elderly customers use it as their excuse for a day out – so why would they be in any hurry to pay with NFC? Sometimes the cost of implementation isn't worth the money made from it.
Which raises another really good point: why bother implementing these methods in stores when nobody really knows what the next big thing will be?
This raises somewhat of a Catch 22 moment. Do you adopt early and lose out when things change, or adopt late and lose out on customers wanting this new technology?
And what about mobile payments and MPOS?
In the words of Google's Eric Schmit, "If you don't have a mobile strategy, you don't have a future strategy."
Well, that's hard to say as Waitrose seems to be keen on letting the customer dictate how they want to pay. Alex isn't going to stand there telling people how it is – instead, it's down to him to ensure that every way to pay that's possible is made completely effortless. One day, mobile payment services could well make their way into stores – it's almost a given really
The chat continued on to hit upon issues of perhaps offering loyal customers better payment options, or perhaps lower prices when a certain method is used. It was also agreed that companies prefer people to use their own branded store credit cards so they can gain data on what they're buying from the competition and in general.
Many questions were also raised, questions that we'll touch upon over the coming weeks.
Until then, here's the tl;dr version for you:
- There needs to be some form of standardisation in the mobile wallets/mPOS industry before retailers will really begin to adopt the technology fully.
- If methods multiply, it'll only slow down the process
- Mobile payments will eventually become the de facto payment method, it won't be a quick change on the retail front though – it'll be based on consumer demand
- It's about using the payment methods that make the most sense for your customers, especially in this transitive phase
- Above all, don't dictate what the customer uses, just ensure that you provide the best payment experience on every channel they choose to use
NFCBrief, Anna BC – Flickr]