Category Archives: Internet Retail

Why retail needs to be prepared for digital transformation

Digital transformation is disrupting industries whether we like it or not. But is the retail sector as prepared for this as it needs to be?

ClickZ Intelligence’s most recently published report, ‘The Pulse of Digital Transformation’, suggests not. It found that in a survey of more than 400 US readers, just 26% of retail and e-commerce specialists had a formal plan in place for digital transformation.

Financial service providers fared comparatively better, with 56% reporting that they had a formal digital transformation plan in position. But ClickZ’s ‘Innovation in Retail Banking’ report illustrates just how much the digital disruptions taking place in the financial sector will affect retail and ecommerce as well.

The report looks at several major innovations in banking and payments, including contactless payments and the Internet of Things, which are the face of digital disruption in the banking sector. Here’s why these technologies are equally big news for retail, and why it unquestionably needs a formal digital transformation plan in place in order to deal with them.

The contactless revolution

The contactless payment revolution is transforming retail already at a rapid rate. According to a study by the UK Cards Association, contactless spending in the UK rose from £287 million ($ 414 million) in January 2015 to £567 million ($ 818 million) in June, an increase of 97.5% over the course of just five months.

The study further put the value of contactless spending in 2015 at £7.8 billion ($ 11.2 billion), up from £2.3 billion ($ 3.3 billion) the previous year. Kevin Jenkins, managing director UK & Ireland at Visa Europe, calls contactless payment the “new normal” in the report, saying that Visa has “seen unprecedented growth in this area, with the number of Visa contactless transactions more than trebling in the past year in the UK.”

This trend goes far beyond the UK: Mastercard recently reported 150% year-on-year growth for Mastercard and Maestro contactless transactions across  Europe. And in Australia, a survey of more than 1,000 people aged 18 to 65 found that for 66% of them, contactless was the preferred method of payment, with 64% preferring it to cash.

A picture of a hand bringing a mobile phone close to a white Square reader to pay for a cup of coffee on the counter.Paying for coffee with Square’s Apple Pay reader: just one of a proliferation of new contactless technologies making their way into banking and retail.
(Photo by Mybloodytypeiscoffee, available via CC BY 4.0)

While this might not seem like such a big deal for retailers, considering that most have embraced contactless card payments already, contactless payment isn’t just about cards. Despite its slow rate of adoption, the launch of Apple Pay has paved the way for many similar contactless technologies, and banks are innovating with gusto.

In 2014, Heritage Bank in Australia designed the ‘power suit’, a fine merino wool suit with a Near Field Communication chip embedded into the sleeve that allows consumers to pay with a swipe of their arm. (Talk about taking ‘wearable technology’ to the next level). On a slightly less drastic level, CaixaBank’s Visa contactless bracelet, which similarly allows users to pay by bringing their wrist close to the retailer’s PoS, was the largest such programme in Europe when it was launched in 2014.

Visa’s cloud-based mobile contactless payments have seen large-scale adoption by Polish banks such as ING Bank Śląski. And even more futuristic forms of payment are being pioneered that could have a huge impact on how customers pay for goods in retail and ecommerce in the near future.

A photo of a finger pressing down on a red-lighted square to be scanned.Photo by Rachmaninoff, made available via CC BY-SA 3.0

CIBC, for example, has been experimenting with voice authentication technology that would allow customers to use their voice not only to access their accounts, but pay bills and transfer money. It isn’t hard to imagine the same technology being used to authorise ecommerce payments.

Other forms of biometric authorisation, including fingerprint access and facial recognition, have been implemented by banks like HSBC, and it’s easy to see the possibilities for retail as well. Amazon is already reported to have filed a patent application that would allow customers to ‘pay with a selfie’ (that is to say, using facial recognition).

The banking sector is right to be upping its game and experimenting with the latest technologies in a bid to make payments more secure. But the retail sector should be prepared for what it means for them, as well.

Banking of Things

Another big innovation in banking which has implications for the retail space is the Internet of Things, whose application in the banking sector has been dubbed ‘Banking of Things’ (BoT). According to a November 2015 survey report by Efma and Infosys Finacle, 47% of respondents believe the technological disruption by BoT will have the maximum impact on the banking industry. And its disruptive potential for other industries also shouldn’t be underestimated.

ClickZ’s ‘Innovation in Retail Banking’ report cites Turkish bank Garanti’s app iGaranti as an example of how BoT is revolutionising banking. iGaranti’s functions include a mobile wallet, peer-to-peer lending via social networks and hands-free voice control for money transfers. A collaboration between Fidelity National Information Services and software company SAP may also give consumers the ability to pay their petrol bill from their car using their smartphone.

A photograph of a shiny chrome coffee machine pouring coffee into a small white cup.The Internet of Things could soon enable consumers to make purchases via everyday appliances like fridges and coffee makers. | Photo by Romi, CC0 public domain image

The report goes on to add,

“One of the main applications of BoT is expected to be in payments as is evident from the previously mentioned partnership between FIS and SAP. It has the potential to drive a radical shift away from cash and card payments to payments made from unlikely objects such as a fridge or a coffee maker.”

These ‘unlikely’ payments could be just as significant for the retail sector, as the Internet of Things and the rise of ‘smart objects’ allow consumers to do things like pay for their groceries using their fridge, or reorder filters and coffee grounds using their coffee maker.

Retailers will need to make sure that they have the infrastructure set up to deal with these incoming new technologies, the different opportunities they present for sales and marketing, and the way they will change buying behaviours.

Social payments and social shopping

Finally, we have the disruption that social media is bringing to the banking and retail industries by transforming the way that we pay for things online. A number of social networks and social apps are integrating payment features into their services as a way to attract businesses and brands to invest in them, while also providing a useful extra functionality for consumers.

In China, as our Asia Editor Sophie Loras reported, 31% of WeChat users are making ecommerce purchases using the app. This figure is already twice that of last year, when 15% of users were found to be using WeChat for ecommerce – and we’re only in June. Snapchat is another social app that recently made the move to ecommerce, presenting users in late April with ‘shoppable’ ads that allowed them to swipe down to make a purchase.

A series of smartphone screens next to each other showing colourful Snapchat adverts for the cosmetics company Lancome. The Snapchat ad for Lancôme (source: Snapchat)

As the ‘Innovation in Retail Banking’ report writes,

“One of the primary drivers of this trend is the robust growth in mobile commerce which is outpacing desktop usage in some countries, including China. As the world of mobile payments integrates with social media, the line between social networking and payments is starting to blur.”

The same could easily be said for ecommerce: that as the world of mobile payments integrates with social media, the line between social networking and retail is starting to blur. Social shopping is already a rising trend in ecommerce, with social networks integrating ‘buy’ buttons into their platforms and businesses making use of shoppable video and galleries to smooth the purchasing process.

It can be difficult to know what to do about digital disruption, or even to be aware that it’s happening until it’s right on top of you. One respondent to ClickZ’s ‘Pulse of Digital Transformation’ report said that, “It is so difficult to ‘see’ what the disruptions might be when we are busy doing work every day. [We] need leadership in this area.” And it can be a further challenge trying to get company leaders to see the need for digital leadership and transformation.

But as the examples above illustrate, the technology that will disrupt the retail industry is fast approaching, and in many cases is already here. Retail and ecommerce specialists with a formal plan in place for dealing with digital transformation will have the best chance of surviving and thriving.

To read more about digital disruption in the retail banking industry including 50 of the most amazing recent innovations in retail banking, get the full Innovation in Retail Banking report. Or download your complimentary copy of our most recent report, The Pulse of Digital Transformation!

If you want to learn more about tackling digital disruption head-on, don’t miss Shift San Francisco this August 30th-31st at Park Central Hotel. Register here!

Retail – ClickZ

A Customer Service Exchange That Went Viral

Customer Service

Remember that just one good deed for a customer can win her over for life.

This Surprising Customer Service Exchange Has Gone Viral

Customer complaints are the norm on social media, but a recent Facebook post shows positive interactions can easily go viral. Kelly Blue Kinkel bought a winter coat from online retailer Zulily before Christmas. When she decided not to keep the purchase, she contacted the company to see how to return it. That’s when, she says, the representative she spoke with gave a shocking response. She posted about the exchange on Facebook: “I spoke with a sweet young man named Patrick, and he…
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Cyber Monday Sales Top $3 Billion

Cyber Monday Results

More retail sales are moving online, and buying on mobile devices continues to rise. Here are the results of the biggest ever online shopping day in the US.

UPDATE 1-Cyber Monday sales top $3 bln as discounts spur buyers

Dec 1 (Reuters) – Shopping through mobile devices soared on Cyber Monday, accounting for more than a quarter of the $3 billion in sales, but many online retailers struggled to get visitors using smartphones and tablets to shop as much as those using desktops. Bigger-than-expected discounts and strong demand for electronics and toys made Cyber Monday the biggest ever day for online sales in the United States, according to the Adobe Digit
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FedEx Expects 12 Percent Increase in 2015 Holiday Shipments


If FedEx is correct, this holiday shopping season will be another boon for Internet retailers.

FedEx predicts 12 percent increase in holiday shipments

With online shopping growing, FedEx is bracing for a record volumes this holiday season. The delivery company predicted Monday that shipments from Black Friday through Christmas Eve will rise 12.4 percent over last year to 317 million pieces. The company said that to handle the crush, it is hiring more than 55,000 seasonal workers and investing in automation and expansion. Rival United Parcel Service Inc. will release its holiday forecast on Tuesday, said spokesman Steve Gaut. He said that the
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Walmart to Take on Amazon with Delivery Drones


CC BY by JeepersMedia

First Amazon made headlines with its plans to use drones for delivery. Now Walmart is following suit. Will other retailers join the fray? It’s inevitable.

Wal-Mart wants to take on Amazon with its own delivery drones

CHICAGO (By Nathan Layne) — Wal-Mart Stores Inc applied Monday to U.S. regulators for permission to test drones for home delivery, curbside pickup and checking warehouse inventories, a sign it plans to go head-to-head with Amazon in using drones to fill and deliver online orders. The world’s largest retailer by revenue has for several months been conducting indoor tests of small unmanned aircraft systems — the term regulators use for drones — and is now seeking for the f
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Amazon Sues to Stop Phony Reviews

Ratings and Reviews

Do you rely on online product reviews? Don’t believe everything you read.

Crackdown: Amazon sues to stop phony product reviews

NEW YORK (AP) — Internet users increasingly rely on online customer reviews when making spending decisions, whether they’re buying an iPhone case on Amazon or hiring an Uber ride in their hometown. But just how much can you trust those reviews? A new lawsuit in which Amazon accuses more than 1,000 people of offering to post bogus glowing write-ups for as little as $5 apiece might give you pause. The case, filed in Washington state court Friday by the nation’s biggest online retailer, casts li
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How Big Online Retailers Are Speeding Up Deliveries

Online Shopping

As ecommerce continues to grow, online shopper expectations keep getting higher. Consumers want their orders to be delivered fast and free. The big online retailers have been working hard in the background to make this holiday shopping season meet these increasing consumer expectations.

Big retailers go to extremes to speed up deliveries

Christmas won’t come early this year, but the gifts might. Just in time for the winter holiday shopping season, Amazon, Wal-Mart, Macy’s and other retailers are working behind the scenes to make sure they can deliver online orders to shoppers faster. Retailers are building bigger warehouses — some the size of 20 football fields — to handle shipments. They’re also sending orders to shoppers directly from their stores and using sophisticated software that tells them the quickest, cheapest way
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Why Retail Merchants Should be Using Beacons

Beacon Technology

Beacon technology is relatively new, but it has many uses for brick and mortar retailers. You might think the only thing they are for is collecting payments. But you may be surprised…

Beacons: Local Retail Game-changing Technology?

Beacons, a new technology designed to drive customer loyalty and in-store sales, is growing in popularity among larger retailers. But is it something smaller retailers can use? This article addresses that question, provides details about beacons, and lists five possible reasons local businesses may want to employ the technology. Beacons are small, Bluetooth-enabled devices that attach to a wall or countertop inside a store. Beacons are proximity-based, meaning they send Bluetooth signals to a
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Amazon’s Prime Expected for Continued Growth

Amazon is the leader in Internet Retail. Smaller companies can learn from their success. Their successful Prime business is one area to watch.

This will keep Amazon revenue growing: Analyst can grow revenue more than the market expects thanks to its ballooning Prime membership, RBC Capital Markets analyst Mark Mahaney said Friday. RBC increased its price target on Amazon to $705 from $650 based on momentum in its Amazon’s Prime business. It was trading at more than $524 a share on Friday. The firm’s third annual Amazon consumer survey suggested U.S. Prime adoption has risen from 25 percent of customers in 2013 to 40 percent today. Mark Mahaney, RBC Capital Markets lead
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Twitter Launches Buy Now Buttons

Buy Now

Here’s another way Internet retailers can sell through social media. Twitter is now making it easier for merchants to sell directly from their tweets with their Buy Now button.

Twitter launches ‘buy now’ buttons for retailers

Twitter is finally making it easy for millions of merchants to sell products through a tweet with its “Buy Now” button. It’s been about a year since Twitter launched tests of e-commerce, and now it’s rolling out a “buy now” button system wide—so any U.S. retailer big or small can sell physical products, digital goods or services all within a tweet. Twitter says this puts it on its way being the world’s biggest social
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