Discussions

Here at A1 Retail we will be updating this page with different industry professionals’ comments and viewpoints on the latest news and changes in the retail industry. Watch this space! 

April 2018

Topic: Click, Try and Buy – Will It Fly?

Tom Downes, CEO, Quail Digital:

“The recent announcement from Debenhams unveiling its ‘click, try and buy’ service in its new store in Stevenage, shows how quickly fashion retailers are advancing from the traditional in-store model. With 33% of consumers using click and collect more for fashion products now than in 2016, this development has stemmed from the growing consumer demand. This new service gives Debenhams customers the opportunity to either book a changing room to try on their online purchase at the time of pick-up, or book an appointment with a personal shopper when they pick up their item, but in order for services like this to run efficiently Store Associates need to be armed with the right tools. 

Stores implementing revolutionary new services such as this need to ensure that Store Associates are connected to one another in order to manage the new demands. By linking the team through a single channel headset system staff will be able to work more fluidly, ensuring each team member is in the right place at the right time. Through this method store associates can let customers into the changing rooms, manage refunds on any return items and personal shoppers can be ready for their scheduled appointments.

This redesign strategy is an exciting step for Debenhams and the retail sector. Click and Collect across the retail environment clearly shows no sign of slowing down and it is those retailers that embrace it, invest in its potential and deliver a service that rivals its competitors that will thrive well into the future.”

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March 2018

Topic: PSD2 and its impact on alternative payment methods in the UK 

Ralf Ohlhausen, Business Development Director PPRO group:

“The second Payments Service Directive came into play at the beginning of this year. However, many consumers are yet to understand the true impact and benefits they are likely to see. Here in the UK, our preferred methods of payments are credit and debit cards be it via traditional chip and pin, contactless or even via mobile wallets and PayPal. Many alternative payment methods aren’t regularly used in the UK because we, as consumers, rely so heavily on credit and debit card payments online. In Germany for example, SEPA credit transfers and direct debits are the norm, which are relatively unconventional methods in the UK.

“PSD2 has placed a ban on retailers passing surcharges for debit and credit card transactions on to the consumer, which is a good thing for consumers, but not for the retailer. As a result, this decision is likely to drive them away from card payment methods in the UK and see an influx in alternative,  local payment methods in the UK. 

“PPRO predicts that real-time bank transfer payment methods, like Pay-by-bank-app and new Open Banking/PSD2-based payment initiation methods will grow significantly in the UK over the course of the next two years. Watch out for names like Pay now, Trustly and InstantTransfer”.

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February 2018 

Topic: Amazon offering Prime Now delivery for Whole Foods

Rupal Karia, Managing Director – Commercial Sector at Fujitsu comments:

“For many years, Amazon has sought to provide the best in consumer convenience, with its ever-faster delivery service and wide product offering. Now, the company is looking to set new standards in grocery delivery. Amazon’s Whole Foods acquisition married the company’s online expertise with the grocer’s physical presence, and now Amazon is bringing the best of its fast-track delivery service to the grocery sector, by delivering products within one to two hours. This provides consumers with what they value above everything else – freedom to choose the channel that most suits their needs, be that physical or online.

“This is something that other retailers must seek to mirror. Our recent study highlighted that that 8-in-10 consumerswould spend more with retailers that have a better technology offering. With many consumers prioritising flexibility even over cost, grocery retailers have a great opportunity to capture consumer loyalty and increase their revenues – but only if they can offer the up to date technology experience that customers want.”

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Hugh Fletcher, Global Head of Consultancy and Innovation, Salmon comments:

“Ever since Amazon introduced Amazon Fresh, it has had its sights firmly set on the grocery market. This makes a lot of sense when you think that Amazon accounts for 37% of all online retail sales in the UK, and 57% in America. Today’s announcement shouldn’t come as a surprise, as it’s the most logical step following the company’s acquisition of Whole Foods and the next step in connecting its grocery offering. Utilising Prime to push this super-quick delivery service further underlines the benefits of its CRM programme, bringing the customers closer to Amazon, and making them more accustomed to locked in subscription models – further reducing the need and inclination to shop elsewhere. Prime now provides an almost unparalleled service that digitally-native customers expect, driven by convenience, flexibility and, most importantly, immediacy. As consumers, we are all becoming familiar with and expectant of a world where we do not have to wait for our favourite products and Amazon continues to consistently meet these traits.

“Amazon’s intention when it acquired Whole Foods was quite clear – to secure a larger foothold in the grocery market, and of course to test its metal in the delivery of a truly joined up, omni-channel shopping experience. There is no hiding that Amazon is striving to own the entire retail sector, and revolutionising it through its ‘cross-channel data driven retailing’ strategy. It’s evident that a robust omnichannel strategy is essential for the future, for both pure-play and traditional retailers. Looking into the future, the grocery market will be transformed – physical interactions will change (such as Amazon Go), online ordering will be streamlined through voice assistants (Echo, Look & Spot), data will be passed seamlessly between channels and customer data will glue the whole experience together, following the customer whenever, wherever and through whatever interface they choose. Although omni-channel has long been around as a concept, we are finally starting to see the dawn of true omni-channel shopping, and it’s a dawn that’s being seen in by Amazon.”

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Topic: Sainsbury’s purchases Nectar

Chris McCullough, CEO and co-founder at Rotageek comments:

“Sainsbury’s move to take Nectar in-house shows the increasing value retailers are placing on data to stay competitive.  Outstanding brands rely on outstanding operations and key to that is unlocking insight into consumer habits. The next step will be using that data in the most effective way. This could mean improving the customer experience through offering personalised shopping experiences, like this Nectar purchase, or ensuring staff are available in the right place at the right time to meet customer demand. Other retailers will certainly be taking note. Done right, data can add value in delivering unbeatable customer service.”

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Rob Meakin, Managing Director at Loyalty Pro comments:

“Sainsbury’s move to buy Nectar is part of a growing trend of retailers, supermarkets and independent stores acknowledging the importance of loyalty in a modern-day consumer market. This acquisition – which will allow Sainsbury’s to understand its customers “better than anyone else” – could be make or break for many big supermarkets who are struggling to compete with customers’ loyalty following the rise of cut-price outlets such as Aldi and Lidl, and the disillusionment of many Tesco shoppers following the Clubcard debacle only two weeks ago.”

“What consumers want in this day and age isn’t rocket science: it’s simple, relevant and timely loyalty rewards. And it’s not just bigger retailers that are owning this. Many smaller, local and more independent retailers are taking advantage of less complex loyalty schemes that deliver personalised and highly-targeted deals that matter most to the consumer. Loyalty is a currency but consumers don’t just want to necessarily spend their rewards or vouchers on themselves. We’re increasingly seeing, for example, a market shift towards spending loyalty points on charities, albeit chiefly offered by local stores – it’s only a matter of time before bigger retailers do the same. Those who put loyalty (and most important, the customer) first, will be the ones that reap the rewards of an increasingly disloyal consumer base.”

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January 2018 

Topic: Amazon Go

Hugh Fletcher, Global Head of Consultancy and Innovation, Salmon:

“Technology continues to change the face of retail, and Amazon as a company is a driving force for this change. Although what Amazon does so well is harness what customers want (and don’t want) and harness technology to address these friction points. Its dedication to service has revolutionised the digitally-driven services landscape in retail. The launch of Amazon Go, the futuristic convenience store, caters to shoppers’ craving for a friction-free, convenient and seamless experience, and officially takes the once online-only platform further into the high-street. It’s an interesting concept, and many have argued that Amazon is looking to partially reverse the increasing consumer trend to shop online.

“However, the real aim is to use its customer-centric learnings from its online platform to improve physical shopping. Online shopping was first to disrupt the retail model as customers were given the option to purchase goods from the ease of their home. And Amazon Go may well be the next step in this experience. As to whether it’s good for retail, it might shake up the already declining influence of bricks-and-mortar stores and prompt them into rethinking ways to innovate their store to suit the convenience of the customer. Conversely, this could spell further trouble for the big supermarkets whose shares had already slipped following Amazon’s purchase of Whole Foods last year.

“Amazon’s Go shop, and the most recently popular digital assistants such as Google Home and Amazon Echo, is designed with one thing in mind – to purposely navigate shoppers through certain platforms, cornering the market away from competitors. For example, Amazon’s Echo device directly connects shoppers at home to their vast online marketplace. These new channels will become less intrusive and present an enormous opportunity for retailers to build a long-standing relationship with the customer. There is clearly an appetite to embrace these sorts of technologies, and only time will tell if Amazon has developed another market-changing concept.”

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Topic: Drop in retail footfall over December

Gill Holloway, Sales Director at Insight UK:

“The latest figures from the BRC and retail analysts Springboard confirm one thing: December was a tougher month than normal for our British retailers. As we continue to navigate through unchartered waters, with UK businesses operating in an incredibly competitive – and often volatile environment – this comes as no surprise. To ensure they’re not getting left behind, retailers should be using this as the perfect excuse to reinvent themselves. How? By embracing digital technology.

“In an increasingly digitalised world there are more opportunities to take advantage of the technologies that we, as consumers, have come to depend on in recent years. In fact, it was our latest research of senior business leaders which found 9-in-10 (86%) agree that digital has enabled the evolution of the organisation and creation of new services.

“But in any attempt to keep people physically on the high street with new technologies, retailers need to consider the impact that introducing digital experiences in-store will have on its business. The overriding desire to touch and feel products before purchase cannot – as yet – be addressed properly by the online experience. Indeed, neither can the instant gratification of taking purchases home in a bag on the day. However, the way in which we achieve this is changing.

“Whilst marrying the world of online with brick-and-mortar has its perks, it is also clear there is still a lot of work to do. As digital transformation is a journey it’s important to remember that retailers are not going to get there overnight. And with the retail industry continuing to evolve, brands should invest in IT solutions that will help them better manage existing consumer demands and transform for future business goals.”

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Rupal Karia, Head of Commercial Sector at Fujitsu:

“Retailers are navigating rocky territory at the moment, and this was reflected in a mixed set of Christmas results and declining footfall. Economic uncertainty and inflation are inhibiting consumer spending while the convenience of ecommerce is eroding the appeal of high street browsing. Retailers can’t solely rely on aggressive pricing strategies to pick up the slack.

“The only unmitigated success was a company that is barely a decade old – online fashion retailer, Boohoo, who saw revenue double, with decent margins. Its success in the kind of discretionary spending that has evaded most of the grand old retailers is instructive: the rise of digital has upended the retail game, putting a premium on convenience and experience. Consumers will open their wallets for retailers who make it easy and/or enjoyable for them to do so.

 “This idea of a seamless and immersive retail experience is not restricted to web surfing, and boosting the appeal of the bricks-and-mortar experience will require creativity and investment. Indeed, Fujitsu’s recent Forgotten Shop Floor study found that 8-in-10 consumers said that they would spend more with retailers that have a better technology offering. At a time of economic uncertainty, consumers need the seductive nudge of a seamless experience, whether in-store or online, to spend more on discretionary items. Retailers must be visionary in their use of tech and give shoppers what they want, before they know they want it, if they are to stand out in a tough climate.”

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Topic: Retail Christmas Sales

Rob Meakin, Managing Director, Loyalty Pro:

“Retailers’ Christmas results paint a mixed picture as the likes of Tesco, John Lewis and supermarket chain Waitrose all vied for the customer’s interest during a busy period. The influence of peak retail periods such as Black Friday shouldn’t go unnoticed, however, with retailers fighting against the customer’s reluctance to spend, especially as budgets tightened and prices continued to rise. Regular Christmas deals are no longer enough to thrive in the competitive market but the ‘membership economy’, where customers feel part of an exclusive club through personalised deals, can help drive footfall and sales. Securing the customer’s loyalty is the biggest challenge facing retailers in 2018 and a personalised strategy will trump all other approaches.”

“A personalised approach can add instant value to each shopping experience, while loyalty schemes can extend the entire journey and help build a long-standing relationship with the customer that encourages growth during all periods in the calendar. It’s also likely the reason why Tesco and John Lewis enjoyed strong festive sales; Tesco’s Clubcard & John Lewis’ membership card enables both to build a long-standing relationship with customers, where they can send them tailor-made deals based on purchasing history over the year. But smaller and more local retailers can also compete by offering their own loyalty schemes that use the latest in customer data analytics and personalised bargains.”

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Hugh Fletcher, Global Head of Consultancy and Innovation at ecommerce consultancy Salmon:

“The Christmas sales figures from retailers this week paints a varied picture of their success, with mixed sales performance across the industry. The retailers who have spent time investing and learning about omni-channel strategies are those that are starting to pull away from the less digitally literate ones, with the likes of Boohoo and Ted Baker revealing strong online sales for the Christmas period, with the latter reporting a huge 35% rise in online sales. The hard work of years of investment and organisational change is now visible, and with these stats there’s no hiding for the digital laggards.”

“Retailers should look to those who have had strong online sales as examples, investing time in their online channels both front- and back-end to create a more engaging and seamless experience for customers. We are already seeing some retailers begin to think about what is next for retail and establish partnerships with voice-controlled devices so as to roll out new services such as voice ordering. It will be these forward-thinking retailers who are ready to provide customers with the services that they desire, and will see success this year as online channels become an even more prominent player in the retail landscape.”

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Global payments innovator Verifone has compiled predictions for the year ahead in the retail industry.

June Felix, President of Verifone Europe:

Alternative payment methods will continue to shake the retail industry

The introduction of new payment methods is constant and customers have high expectations. Retailers must stay nimble to accommodate new technologies as they emerge.

2018 will continue to see mobile payment applications and their use grow exponentially. Apple Pay is already reporting more than one million new users each week. Popular cloud based wallets such as WeChat Pay and Alipay will also break down borders and disrupt the payments ecosystem. 

As is often the case, the Nordics may offer some strong indication as to where we are headed. Banks there have collaborated to establish mobile payments schemes, which are remarkably successful. MobilePay, which launched in Denmark in 2013 has grown to more than ‌‌3.6 million users (about half the population) in three years. Norway’s VIPPS and Sweden’s Swish are two other very strong models. These schemes support bank account to bank account transfers – a different model to the now-familiar use of a smartphone to initiate a card transaction.

 

Kevin Freeguard, Managing Director Fintech Payments Commerce:

The rise of futuristic, innovative technology will continue
Consumers expect in-store shopping to offer the same convenience as the online experience and it’s up to retailers to deliver. For example, more and more consumers depend on smartphones to do everything and younger generations are already being trained to do away with their physical credit cards and move towards contactless payment methods. Retailers ignore this trend at their peril.

One thing that we’ve learned from this decade’s digital revolution is that the future of payments is all about connectivity.  Connecting terminals, connecting services, connecting channels, and connecting commerce. Consumers will start to see more seamless experiences at the least inch of checkout.  

Larger retail businesses will start to create bespoke experiences. Take the clothing boutique experience as an example, it’s very interactive and 1 on 1 compared to larger retailers like Selfridges and John Lewis. Retailers will leverage more in-store technologies such as beacons and Omni channel solutions to engage the connected consumer as they look to personalized services and to meet consumers where they are. 

Retailers will start to capitalise in creative ways through social commerce, as consumers become familiar with buying directly on channels like Facebook and Instagram.

 

Raja Ray, Director, Products and Solutions, Verifone:

Retailers will continue to make instore shopping easy, faster and more convenient
New advancements in portable and mobile point-of-sale technology will being to signal the end of the traditional retail check-out line. Many retailers are already ‘queue busting’ by adopting mobile payment devices and contactless payments as they make it possible for customers to pay in the ‘aisles’, when the customer is ready and most eager to pay. Mobile and portable payment devices will help till points flow faster which is ideal for boosting acceptance during peak times such as January sales, when throughput is particularly high.

Click and collect programmes will increase in popularity and utility as more and more consumers reap the benefits of faster and more streamlined shopping experiences that encourage online ordering and instore pickup. 

As retailers leverage their online and in-store identities they will see the benefit of omni-channel behaviors such as saving the sale by ordering merchandise for a customer from another location or online when the store is out of stock.

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Jenny Jones at Connexica tells us about their 2018 Technology Predictions:

1. Chatbots

Most of us are now familiar with websites offering a ‘livechat’ feature where you can ask questions and seek advice in real time from a human. Unfortunately, these chat facilities are generally 9/5 Monday and Friday and don’t offer 24/7 coverage.

This is where the Chatbot fits in! Chatbots can act and behave as a human would interact with customers/website visitors to provide an out of hours service, basic introductory, filtering service to determine if they should speak with an agent or book an appointment etc.

Chatbots will become widely used throughout 2018 helping organisations to streamline processes and improve customer service.

2.Voice First Interaction

First generation voice interaction devices are everywhere and for most people Siri, Cortana and Alexa are familiar words within their house. They are great at what they do, answering questions, calling contacts for us, telling us jokes, helping us to cook, but it’s all very one sided.

We predict that in 2018 and beyond we will see second generation platforms conversing with humans, asking questions, prompting thoughts plus much more. Currently, Alexa and Siri etc can only understand and respond to one question at a time but going forward we predict humans will be able to ask multiple questions. Voice first devices currently reply with very formal scripted replies, look out for devices designed to build relationships and emulate their owner in responses.

3. AR E-Commerce

Think Pokémon go for retail!

2015 saw augmented reality (AR) take over lunch breaks, spare time and daily commutes as the world went crazy for Pokémon hunting. For most this was the first taste of AR where augmented reality is overlaid on to the physical world. The first signs of retailers dipping their toes into this world have started with Amazon and Gap via mobile devices with the Tango camera, currently limited to Lenovo and later in the year Asus phones. Shoppers can now move furniture around their house, place TV’s on walls, try clothes on manikins and zoom in/out depending on what level of detail they require, all within the setting of their room, office etc.

Watch out for more devices with this camera capability, more retailers offering this services and more customisable details such as personalised manikins – truly try before you buy.

4. IoT, Big Data and AI

In our other prediction blog this year we talk about IoT and how 2018 is going to see more devices, more smart homes and devices streamlining home life. In this post we focus on the data and what’s going to happen? With more devices, comes more sensors and more data, this is where big data thinking will come into play combining these vast datasets to create meaningful insight.

Watch out for AI and machine learning in 2018 stepping in and using the data from IoT devices as we start to receive high volumes of more precise data. The use of this data is endless from improving device performance, enhancing day to day activities to targeted marketing and truly understanding our customers. There will be a case of create and collect in 2018 as the tsunami of data hit’s us and organisations aren’t sure what to do with this abundance of data.

 

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“Get smart signage or get left behind”. Harry Horn, general manager of EMEA at Scala, shares his predictions for the retail sector in 2018.

It is no secret that UK retail sales growth has been down this year, with the aftermath of Brexit and high inflation affecting customers’ spending power. As we move into 2018, we will continue to see uncertainty in the market, so it will become increasingly critical that retailers do their utmost to encourage customers in-store.

Based on our experience working with retailers all year round, we predict continued use of digital signage technologies in 2018 to create personalised experiences that drive sales and maintain loyal customers.

1/ One provider from start to finish

There is an increasing demand in the market for digital signage from a full solution provider – a one-stop-shop approach that can supply project management, software, hardware and content distribution. Combining these areas helps retailers who use digital signage to eliminate the complexity of managing a digital signage network, whilst being able to expand it with new features and capabilities over the year.

2/ Intelligent shopping

Retailers are looking for support in creating an optimised customer journey. Customers are increasingly demanding, expecting greater choice and immediate availability.

Using geolocation tracking, retailers can encourage customers into a store by pushing personalised promotions to their smartphone when they are nearby. In addition, using intelligent in-store shopper location technology makes it possible to detect fact-based consumer profiles, derived from information held in the customer database by the store. This allows retailers to provide a highly personalised customer experience as soon as a customer walks through the door, just as they have become accustomed to online. Highlighting products that match previous preferences, in the right size and preferred colour is more likely to build loyalty and encourage a purchase.

The full path from ‘attract’ to ‘purchase’ should be managed and optimised using the best-in-class technology and data mining tools with the goal to guide customers to the product/service that meets their needs perfectly. The retailers that meet their expectations are the ones that will succeed.

3/ Digital dynamics driving demand

From a market development perspective, we see larger retail chains, especially those operating internationally, acknowledging the need for dynamic digital communication within their stores.

When used in this innovative way, digital signage becomes a bridge that delivers personalised communication. Consumers, have become more used to the style of marketing integrated within online shopping environments, where the shops have instant access to customer information through account log in which can provide tailored suggestions and discounts. Through advancements in signage innovation, it is now possible to use the information from a customer’s phone or loyalty card to detect their presence in store. This omni-channel approach is becoming increasingly important for retailers.

Above all, if retailers want to make the most out of digital signage in 2018, they should keep the below checklist in mind:

  • Tailor communications to the customer for maximum impact; if it doesn’t feel unique and personalised it won’t be effective
  • Manage content centrally and update locally to allow for real-time message refinement and personalisation
  • Make sure bricks-and-mortar stores are part of the omni-channel strategy right from the outset

For further information, please visit www.scala.com.

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Andy McDonald, Vice President Merchant Payments, ACI Worldwide, discusses his five payments buzzwords for 2018.

Mobile

There is no way around it: the mobile story will just get bigger and bigger.  As mobile wallet adoption continues to rise globally, the message for merchants is a simple one: get your mobile strategy right or get left behind.  In many Asian and Latin American countries, mobile wallets are now the dominant payment platform. In China consumers, have adopted mobile almost exclusively as their payment channel of choice. Consumers want to buy products and services when they want and wherever they are. Mobile is central to a new consumer behaviour emerging around the globe. Offering the right payments experience and a seamless mobile checkout solution will be crucial to commercial success in 2018.

The Alipay and WeChat phenomenon

Consumers do not only want to pay wherever they are, they also want to use the payment methods they know and like. Nothing underlines that fact better than the Alipay and WeChat ‘invasion’ of Europe. In just a little over five years, these two digital platforms have changed the nature of Chinese retail payments, and helped hundreds of millions of Chinese consumers move from cash to electronic payments.

In the last few years we have seen a flurry of European retailers adopting Alipay and WeChatPay, from Selfridges and Harrods in the UK, French retailer Galleries Lafayette to market traders in Camden town. The logic is quite simple: over five million tourists travelled to Europe in 2017. Figures show that Chinese travellers spend more than any other nation when travelling abroad. Retailers in Europe are missing a big trick and a huge opportunity if they don’t develop strategies to integrate new forms of alternative payments and cater to this huge consumer group. We expect this trend to continue and at ACI, we are helping our clients to accept more and more payments from Chinese consumers.

The Telco Opportunity

With many consumers now spending more time and money on their mobile devices than on their desktops and in stores, telcos – the facilitators of this movement – are at the moment on average only billing 3 percent of consumer spend! Add to this the increasing number of new market entrants, in particular OTT (“over the top”) players, who are threatening the traditional bread and butter revenue streams of telco companies, and it is clear that MNOs and MVNOs need to consider how to carve out a profitable, sustainable path in a digitally-connected future.

According to an  analysis by ACI Worldwide and Red Dawn Consulting , the mobile payments market is set to double over the next five years, and telcos have a towering opportunity to increase their mobile payments revenue at least fourfold by 2022.

However, this €13 billion opportunity can only be realized by those telcos who are willing to think ‘outside the box’ – or rather ‘inside the handset’ – by examining how they can deliver against consumer demand for speed, convenience and security. And by those that make their businesses a mobile-enabled hub for the digital marketplace.

Fraud 

Although this is only number four on my list of things to watch out for, it goes without saying that fraud needs to be on top of the agenda for retailers and merchants wherever they are.  As the industry continues to add more channels – opening and expanding the capabilities with the target of real-time, borderless, any-to-any payments – fraudsters will attempt to attack the ‘weakest links.’ ACI’s most recent analysis for this shows that fraud attempts are expected to rise 30 percent during this year’s holiday season. Identity theft (via data breaches), account takeover (including phishing attacks) and friendly fraud (chargebacks) continue to be the biggest challenges for consumers and merchants and it goes without saying that sophisticated fraud monitoring and prevention capabilities will be more crucial than ever before.

PSD2 and authentication

A few weeks ago, the European Commission announced the final regulatory technical standards (RTS) for the revised Payments Service Directive (PSD2) which will take effect in 2018. One of the most contentious recommendations is a new requirement for PSPs to increase the strength of customer authentication needed to complete a transaction.

In the new PSD2 world, regulators want us to authenticate every transaction via at least two steps. It looks like ‘friction free’ will remain a fantasy in the PSD2 world. PSPs may be exempted if they have developed ways of assessing the risks of certain transactions and can identify fraudulent ones. Exemptions also exist for contactless payments and transactions for smaller amounts.

Expect a big debate in 2018 and beyond, about the need for strong authentication and whether these measures are too ‘heavyweight.’

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Rupal Karia, Managing Director of the Commercial Sector, UK and Ireland at Fujitsu, shares his nine noteworthy trends for retail in 2018:

1. Collaboration:We have already seen a lot of collaboration in 2017, and we expect to see even more next year. Most recently Tesco has announced its new partnership with NEXT, and over the next year, more supermarkets will likely follow suit looking to recreate the store-within-a-store model. As well as collaboration we will also see more consolidation of companies in the form of mergers and acquisitions.

2. Mobile:Mobile will continue to be a key driver of traffic, sales and engagement for retailers next year. We saw that this year the majority of hits on Black Friday were coming from mobile, and this is only going to become more widespread. With the latest phones getting bigger and better screens, mobile will become the one route to market.

3. Supply chains:The supply chain will be affected by many factors next year. To begin with, driverless and robotics will dramatically change the retail supply chain. We will see more pilot schemes where retailers and manufacturers use driverless and robotic technologies which will alter the delivery process for components and products, which will as a result effect and (hopefully) speed up retailers’ routes to market.

4. From the manufacturing side of the supply chain, we expect it to become a lot more technologically advanced and smart. In farming for instance, farmers can use IoT devices and analytics to identify when is the best time to use pesticides and harvest their crops, or when is the opportune time to breed their livestock. This will allow farmers to harness data and use analytics to more intelligently farm, saving them time and money, which in turn can improve the whole supply chain.

5. AI: Artificial Intelligence (or AI as it is most commonly known) has been the ultimate buzzword of 2017 and it is clearly here to stay. Outside of retail, we are already seeing that half of people are comfortable being diagnosed by an AI doctor for instance, and in retail it is already happening without consumers even realising. Webchats for instance with a brand or retailer use AI to respond to questions. At times you cannot tell if they’re a robot or not. As AI becomes more advanced, these webchats will only become more sophisticated, and we expect it to enter the hospitality industry as well, providing customers with their own 24-hour personal concierge.

6. Security: Security has never been more important than it is today. Attacks as we have seen can, at their worst, destroy a brand and we have seen that they can have significant financial and reputational impacts. Attacks can stop trading, which for a retailer can be disastrous. In the coming year retailers will need to ensure that their cyber security defences are a top priority in order to both prevent an attack, or mitigate and reduce the damage should one befoul them. Consumers do not take kindly to security breaches or attacks and they will instantly be concerned with whether it will affect them. If they are prevented from making a purchase due to systems being shut down, they will shop elsewhere and the retailer will lose the customer as a result.

7. Payments: Payments will be a hot topic for retailers next year, as we have seen contactless truly take off this year and we will continue to see it evolve. It will be interesting to see what payment innovations retailers adopt over the coming months as they look to make the retail experience a more seamless journey, which payments plays a significant role in.

8. Personalisation: Personalisation and customer centricity is going to be increasingly more important next year as the landscape becomes ever more competitive. Thanks to the advancement of AI and CRM systems (customer relationship management), it is now the easiest it has ever been for retailers to know their customers from the moment they walk through the door, click online or swipe with their mobile. Over the next year we expect to see retailers finally using these tools to better their customers experience as they will now have the insight into their shoppers that they were previously missing.

9. Voice ordering: Undeniably voice has made a lot of chatter amongst UK retailers this year and this is only the beginning. Culturally, Amazon and Apple have changed the way we interact with our devices through Alexa and Siri, and as we move into self-learning voice assistants we anticipate that this medium will truly take off and become a part of our everyday lives. We have already seen a few retailers this year take steps towards voice ordering, Tesco for instance teaming up with Google Home was one of the first, and over the year, we expect more retailers and brands teaming up with voice assistants so as to offer customers a new and interactive way of shopping.

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December 2017

Topic: The Force is hitting the High Street as Star Wars fans stock up

Data from retail software company Vend shows a major increase in sales related to Star Wars merchandise in the lead up to ‘Star Wars: The Last Jedi’ this week. And it’s beaten last year’s film by miles. There has been a 192% increase in sales for products related to ‘Star Wars’ in the past three months compared to the same period last year, when leading up to the 2016 movie release.

It also seems that Star Wars buying is reaching peak levels right now. Vend’s data shows that sales in the first 10 days of December were 22% higher than the same period in either October or November.

Retailers have also been preparing for the rush with an 86% increase in ‘Star Wars’ products stocked compared to the same period last year.

Vaughan Rowsell, Founder of Vend says: “You don’t have to be the brightest lightsaber in the galaxy to know that this latest film is a big deal for Star Wars fans. But clearly it’s also big for retailers – especially those who have heavily stocked up on merchandise to capitalise on the hype. It’s great to see our High Street stores getting an added bump in sales just before Christmas. Though retailers will be hoping The Last Jedi isn’t the last they see of The Force boosting their bottom lines.”

About the data – Vend transactional data from over 100 independent retail stores

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October 2017 

Topic: Halloween

“Although it may still be seen as an American celebration, Halloween has become much more established in the retail calendar in the UK, and retailers cannot afford to ignore what is quickly becoming a landmark event. According to figures, retail sales hit £310m during Halloween last year, a 35% growth over four years and are expected to rise again to £320m in 2017. There is no doubt that customers will want to go in-store to buy their favourite sweets, try on different costumes and ultimately, purchase products. What is clear is that the in-store experience must now be a seamless, convenient and reliable experience. Yes, these traits are all commonly associated with online, but there’s no reason brick and mortar stores can’t achieve the same level of experience, especially during proactive peaks.

“The key to success is in offering an engaging and seamless customer experience across all channels. eCommerce is a great avenue to reach the customer, but the physical store remains a fantastic revenue driver, particularly when retail peaks are taking place. Retailers must take what customers crave online and implement it in-store. Promotional activity offers an initial draw, but by using apps, inventory systems and similar in-store technology, sales assistants can show shoppers what’s on offer and right for their taste. Along with Black Friday, Christmas and Valentine’s Day, Halloween is a welcome opportunity to traditional retailers, and clearly those that choose to embrace it by providing the best service will not only see huge financial benefits but will secure the customer’s long-term attention.”

Olga Kotsur, CEO & Co-founder, Mercaux

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Topic: Sainsbury’s 

Heather Barson, Director of Retail and Hospitality, Fujitsu UK:

“This latest move by Sainsbury’s to offer shoppers a chance to buy suits alongside their weekly shop is just the latest in supermarkets’ ongoing diversification and push into expanding their offerings in-store. With competition rife, retailers are increasingly looking to move into new sectors in a bid to diversify their offerings, helping reach a whole pool of consumers they wouldn’t otherwise. And with £1 of every £10 spent on clothing in the UK now going to supermarkets, it’d be a lie to say it isn’t working. 

“The simple truth is that the relationship between consumer and brand has changed irrevocably. With so much change taking place, it’s now all about the customer experience. Whilst the idea of ‘loyalty’ was once a focus for brands, we’re now in an era where, instead of shopping on a brand’s likability, consumers are asking questions around whether a brand offers a product at their price point, convenience and to meet their expectations. With this significant shift taking place, it’s all about finding that point of differentiation. Take ‘opening hours’ as a prime example of this. With most supermarkets, on average, open later than the high street retailer, supermarkets have the upper hand – giving time-strapped consumers the opportunity to buy more in one ago, and during a time that suits them best. 

“With consumer confidence plunging, competition is fierce and both customer loyalty and shopping experience are weighing in. Put simply – if the experience is good and what a consumer expects and needs from their brand, they will go back.”

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Topic: Are you ready for Black Friday? 

Tom Downes, CEO at Quail Digital comments: 

Connecting Staff for the Black Friday Onslaught

“While retailers welcome the uplift in revenue that comes with Black Friday, for staff – especially in-store staff – the experience is often far less welcome. Prioritising activity can be tough for store associates during a normal sales day, but juggling product questions, click and collect fulfilment and store deliveries is a walk in the park compared to the potential bedlam that can occur on Black Friday. 

“The challenge for retailers is not just managing the sheer volume of customers and the high levels of sales transactions but ensuring the right staff are in the right place at the right time. Tom Downes, CEO, Quail Digital, explains the importance of excellent in-store communication to maximise sales and minimise stress on Black Friday.”

Black Dread

“Vast numbers of hyped-up customers; long check-out queues; shelves requiring constant tidying and restocking; plus, the ever-present risk of theft and damage – Black Friday is hardly a store associate’s dream day. And yet this is a key day in the retail year – one on which a retailer can massively boost revenue if the customer experience is right.

“For the customer, Black Friday is all about speed. It is about finding the right products at the right price, making the purchase and moving on to the next store. And that creates a challenge for store staff – is the priority minimising the check-out queues or restocking shelves? Managing security or ensuring experts are on hand to answer customer questions?

“While staff can clearly handle many aspects of the day to day activity, when it gets tough – and it doesn’t get much tougher than Black Friday – prioritisation must be the role of the store manager. This is not a day for the store manager to be locked away in a back office. A store manager needs to be on hand, actively checking check-out queues, spotting problems with bag handling and or issues with security tags. Managers need to be on the shop floor – and they need to be in constant communication with staff.”

Connected Store

“Achieving that communication, however, is not straightforward. A dated tannoy system is certainly not a solution – in the Black Friday frenzy, this is just one more source of noise and annoyance for customers and staff alike. Similarly, telephones or walkie talkies which demand staff actually interrupt current activity to answer are hardly a viable solution! The alternative is an integrated wireless headset system which uses a single channel to ensure all members of staff are in permanent communication, allowing the manager to direct operations and taking the prioritisation burden away from staff. 

“In addition to enabling the store manager to be on the shop floor continuously, the single channel also means all staff are permanently tuned in – but in the background, minimising impact on current tasks but enabling immediate response as and when required by the manager or colleagues. Should a problem arise in the Black Friday scrum – from attempted theft to customers fighting over the last heavily reduced TV – staff are able to respond immediately. 

“Critically, on this most challenging of in-store days, continuous but unobtrusive communication enables store managers to optimise staff resources in real time, from anywhere in the store. Reallocating staff on the fly in response to the actual in-store situation takes the pressure off staff, improves efficiency and delivers a better customer experience – all of which will be key to maximising the Black Friday sales opportunity.”

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Duncan Keene, UK Managing Director at ContentSquare comments:

Are Your Insights Falling Into The Black Friday Black Hole?

“With upwards of one hundred times the traffic of a standard day, Black Friday should have provided online retailers with an amazing depth of insight over the past few years – but the reality has been very different. Not only are retailers failing to mine the volume of data generated during usual trading volumes but Black Friday is hardly an a-typical day. So does data analytics offer any value at all on the busiest shopping day of the year? Most definitely, if you want to deliver the fastest, slickest and most effective shopping experience, insists Duncan Keene, UK Managing Director, ContentSquare.

“Consumers shop very differently on Black Friday; it is all about speed – finding products fast, ensuring delivery options fit and checking out smoothly. There is no tolerance for confusing offers, for convoluted delivery messaging or check-out processes slowed down by add-on offers, or options to sign up for loyalty schemes. That is a different message for a different day. To make the most of Black Friday retailers need to get the fundamentals of the experience as slick as possible – and nothing more.

“It sounds so straightforward – yet in a market where UX teams have little insight into problems due to the sheer volume of data and test based on best practice and intuition at best, ensuring the fundamentals are working perfectly is difficult. How well prepared, for example, is the mobile site? During the holiday season, the conversion rate more than doubles on mobile, signalling that more users buy this way when they have a feeling of urgency – and it doesn’t get much more urgent than Black Friday.

“What is required therefore is a way to gain rapid insight from the existing data resources. And that is where AI and machine learning are set to play a vital role in transforming the day to day activity of eCommerce teams. 

“In contrast to manual data mining techniques that can barely scratch the surface of eCommerce data, AI can transform speed to insight. Whether through mining the entire checkout process and then surfacing immediately both a problem and its location; or looking at different areas of the page to identify those that don’t get clicked on very often but convert well when they do; AI can provide rapid insight into the priority areas that need to be tested. Essentially, AI can find the issues quickly – enabling organisations to focus on delivering the right Black Friday experience, from reducing journey length to improving signposting and ensuring the guest check out is easy to find and use.

“And with Black Friday in the UK fast evolving from a day to a period – extending in 2016 from Monday 21st November to Friday 25th November – according to IMRG, it is becoming increasingly important to understand different trends in behaviour across the longer time frame and ensure the experience matches up.”

Capturing Attention

“With good processes in place, retailers can turn their attention to the best ways of capturing shoppers’ interest. Shoppers are ready to buy – with conversion rates rising by 89% between the first three weeks of November and Black Friday events, retailers have a short opportunity to attract a huge audience. 

“While Black Friday is not a day to attempt to boost the loyalty programme, with vast numbers of individuals arriving on a site for the first time – often from Google Shopping – how can a retailer make it compelling and reduce bounce rates?

“This is where analysis of this year’s Black Friday activity will provide invaluable insight not only for next year but any other peak trading time, including Christmas. Understanding what worked, what didn’t and being able to monetise content is incredibly valuable – especially from a merchandising point of view.  Which of the many offers on the homepage generated the most revenue? Where was it located? Did the less prominent offer outperform one located higher up the page, despite not being seen by the majority of shoppers too impatient to scroll down? Of those that did click on the offer, how many went on to make a purchase? 

“Instead of ditching all this insight into the Black Friday Black Hole, understanding the way content performs, the segments of traffic new to the site and their journey, will deliver retailers invaluable insight to ensure they are ready to make the most of the next big trading day.” 

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Topic: Ikea to sell online on third-party sites

Hugh Fletcher, Global Head of Consultancy and Innovation at Salmon comments:

“Ikea’s ‘test’ to sell flat-pack furniture through third-party providers is unsurprising given how digitally-inherent customers now expect convenience in their daily shopping experience. The rise of digital services has disrupted the sector entirely, and is encouraging more and more brands to take on an omni-channel strategy that realises partnerships of this ilk. Ikea’s potential alignment with Amazon makes sense given that the Seattle giant continues to show that immediacy is king in the retail world; Prime completely changed retail and showed customers that they can have what they want with little waiting time.

“Whoever Ikea aligns itself with, it will be a coup. Why? Because it is evidence that even some of the biggest global brands are using the interfaces and infrastructure of big market-place providers to develop their omni-channel strategy. This type of partnership may open the floodgates for other brands and service providers to jump in too. But jump in with caution they must. Whilst a partnership with a market-place gives access to customers, experiences and logistics, it removes a direct relationship with the brand. With this is mind, Ikea will have to work even harder to re-retain customer loyalty.

“There is no doubt that the supply-chain logistics and overall operations will be complex, albeit simplified by a partnership with an existing ecommerce powerhouse. Developing a complete ecommerce offering will allow Ikea to reach into a previously untapped market. Looking beyond online, innovation will play its part in separating the very best from the rest. It has never been so crucial for retailers to evolve their business. Online has rapidly become the platform of choice but entirely new services such as Programmatic Commerce and Zero-UI connected devices like Google Home will soon become the norm. Retailers that embrace this kind of innovation will ultimately be the ones that succeed.”

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Gill Holloway, Sales Director at Insight UK comments:

“In a bid to become more accessible to its shoppers, Ikea’s move to start selling its products through third-party websites makes one thing clear – with consumer demand and expectations ever accelerating, it’s positive to see retailers speed up adoption of new offerings and services in light of these changing shopping habits.

“In an increasingly digitalised world, there have never been more opportunities for retailers to take advantage of the functionality that we, as consumers, have come to depend on in recent years. Further reinforced by the fact that a growing proportion of consumers were born into a world where mobile devices, social media and the internet are day-to-day companions, many consumers bring with them different expectations of how they want to engage with organisations.

“With a multitude of retail options, from online and social to mobile and in-store, consumers increasingly look towards retailers with a broad online presence and strong omni-channel strategies in place. After all, those who have seamlessly integrated channels that flow from shop floor, to the back-end systems through to the online store will be the ones best positioned to capitalise on the new, digitally driven path to purchase.

“As digital transformation is a journey it’s important to remember that retailers are not going to get there overnight. And as the retail industry evolves, more brands should be taking a leaf out of Ikea’s book by exploring how they can better manage existing consumer demands and transform for future business goals.”

    2018 A1 Buyers Guide
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