Morrisons invests in its staff – but in the right way?

Savvy retailers will already know just how important its staff are to their success. As the faces to their name, it’s essential that the happiness of the workforce is prioritised.

Morrisons is certainly attempting to do this with its latest move, which will see the supermarket chain invest a huge £30 million into facilities for its staff. Not only will this include a décor revamp, but employees will be treated to perks like subsidised coffee.

However, the change that is likely to result in the most enthusiasm from its workers is to wages. Employee benefits and pay is a hot topic right now, as retailers prepare the implement the new National Living Wage in April. And Morrisons is staying ahead of the curve on this one, promising its 90,000 staff a 20% pay rise to £8.20 an hour, more than the expected £7.20.

This is sure to boost staff morale– much needed considering Morrisons has been suffering falling sales for quite some time now. But are the changes actually going to help staff do their jobs any better?

Being the ones who work in the stores every day, store associates are the only ones who can really know what needs improving. Yet, they’re often the ones who retailers listen to the least. For example, new research from Miura Systems claims that UK retail businesses are losing millions of pounds in sales by not listening to staff who’ve spotted a vital need to improve store technology.

Today’s shopper is tech-reliant, so it’s no surprise that this is a major factor in how they rate a store experience. Whether it be a speedy checkout service, or the ability to browse the web as they navigate the shop, consumers expect technology to run seamlessly – and it’s often the staff they’ll blame if it doesn’t.

So, even with a free cup of coffee in hand, it’s unlikely that Morrisons staff will feel very motivated if shop floor processes aren’t optimised.

Miura also revealed that 72% of retail employees think customers are more demanding than ever before, even asking them questions when they’re serving others. With this mind, retailers should be doing all they can to help employees in high-pressure situations. Arming them with tablets so they can check product information and stock availability quickly, perhaps, or placing interactive kiosks in-store to allow shoppers to serve themselves easily when a staff member is unavailable.

A further 80% of retail staff said shoppers put pressure on them to hurry when there is a queue. In busy trading periods this can’t always be avoided, but it can certainly be improved. A speedy payment process is absolutely essential here; as the final stage in their journey, this is the memory most shoppers will take away when they leave. Therefore, retailers must in the most cutting-edge payments technology to keep queues flowing – such as contactless and mobile.

Of course, this is no discredit to what businesses like Morrisons are doing. Rewarding staff with treats is a great way to show appreciation for all their hard work, and happy store associates tend to be more productive. However, this work will do little good to the performance of their business if they’re not armed with the right tools to keep customers happy too.

Inside the mind of the modern consumer

Understanding customers is no easy job for retailers today. What consumers want is changing all the time, as is the technology that they rely on as part of their shopping trip. It’s no wonder that many businesses are struggling to keep up!

It doesn’t help that retailers are inundated with headlines that profess the latest insights into consumer habits; which ones can they actually trust? Here, we’ve detailed the most recent retail research that retailers – online and off – should factor into their customer experience strategy.

“They are impatient” – Vodat International

5 minutes; that’s how long a customer will wait for their query to be answered in-store. That doesn’t leave much time for a staff member to gather the information they’re unsure of, before that shopper abandons their journey completely.

How to respond

Ensure that your workforce receives regular training regarding your product offering – especially if new items are added. For an extra helping hand, why not implement tablets in stores so that answers are always at staff’s fingertips?

“They expect personalisation” – iVend Retail

A third of shoppers think they get personalised offers online, but not in-store. Perhaps this is one of the key reasons why ecommerce seems to gaining its sales share of channel.

How to respond

Yes, online has automated capabilities that allow loyal customers to receive information that is specific to them – but there is something the store can do better.  The ability to see, touch and try products cannot be replicated online, and even better, the presence of staff means that shoppers can get even more insight into the products they’re interested in. There’s nothing more personable than face-to-face interaction, so encourage conversation to give staff the opportunity to upsell products that might compliment a customer’s purchase.

“They tap-to-pay” – Visa

The number of contactless transactions made in the UK last year increased by 250%, according to the payments specialist. It’s suggested that this is largely due to the spending limit rise in September, which saw consumers able to pay for goods of up to £30, as opposed to just £20.

How to respond

The speed of the payment method fits the profile of today’s busy, impatient shopper. Therefore, now is definitely the time to ensure that your store not only accepts contactless, but encourages its usage.

You’ll also find that the same NFC technology in contactless terminals works with some mobile payments services, e.g. Apple Pay. As availability widens, consumers will come to expect all retailers to offer the method to them in-store. Those that don’t are likely to be viewed as outdated pretty soon, while those that do will see queue times accelerate and customer satisfaction soar.

Of course, if you’re planning on implementing such technology, you’ll want to make sure that your card payment network security is up-to-scratch. You can find out how to ensure this here.

“They go mobile” – Episerver

Mobile shopping is already playing a huge part in how people are shopping this year; 59% of Brits used their device to purchase items in the January sales.

How to respond

Shopping on a mobile device is meant to provide the ultimate convenience for consumers, allowing them to browse retailers wherever they go. With this in mind, it’s essential that you make your own mobile experience easy – ensure that you’re website is properly optimised, and that the payment process is neither lengthy nor fiddly.

“They click-and-collect” – Atomik

Shoppers might love mobile, but not quite as much as click-and-collect. A recent survey saw it beat mobile as the method that impacted their 2015 shopping experience the most.

How to respond

The role of the store has evolved from being just a sales channel, it now has to deal with a constant flow of click-and-collect orders. As most retailers now offer the service, they need to make sure that it’s the best it can be to stand out from so many others that offer the same. Training staff, implementing dedicated click-and-collect personnel, or adding an interactive kiosk are all ways to better optimise the store for click-and-collect. Of course, with all this extra technology, retailers must invest in a network that’s robust enough to support it.

Have you seen any recent retail statistics that you think offer real value to retailers? Then share them with us on Twitter via @Vodat_Int.

 

6 stories that redefined retail in the first 6 months of 2015

It’s hard to believe we’re already in July; where has the first 6 months of the year disappeared to?!

As we pass the halfway point of 2015, let’s look at some of the retail stories we could not have predicted on New Year’s Day, and the trends that are likely to shape the months ahead.

  1. The demise and (sort of) rise of Tesco

2014 wasn’t a great year for Tesco – and 2015 didn’t start well either, with the company announcing the biggest ever loss in its 96-year history in April. However, once incoming CEO Dave Lewis got his feet settled under the table, things started to improve for the supermarket chain, which defied analyst predictions to post lower-than-expected sales falls in June.

  1. Cheaper by the dozen

There’s just no stopping shoppers’ appetite for low-budget bargains; in May, the Local Data Company announced that Aldi and Lidl are now opening at least 5 UK stores each week – growing at twice the rate of the Big Four supermarkets – while Iceland and Farmfoods are also rapidly increasing their retail footprint.

Poundland is proving another unstoppable force, entering into talks with regulators to acquire fellow discount brand, 99p Stores.

  1. Apple Pay hits the UK

July is an important month for the UK payments industry, as Apple Pay hits shop floors and restaurant tables for the first time. Though consumer awareness of mobile wallets remains conservative, the fact that major corporations such as Boots, Costa, New Look and Nando’s have signed up to the service, indicates that the industry expects great things in the long run.

Read our blog: there’s a lot more retail & hospitality needs to get right before taking a bite out of Apple Pay.

  1. The £1 takeover

A pound can’t get you much these days: 1.3 Mars Bars, half a bottle of shampoo… an entire retail chain?!

That’s exactly what private consortium Retail Acquisitions paid for BHS in March, as Sir Phillip Green offloaded the struggling retail chain from his Arcadia Group.

Despite its name, Retail Acquisitions has a lack of experience in the sector, and its early plans include heavy-handed measures such as the potential closure of BHS’ flagship store on London’s Oxford Street. Watch this space.

  1. Retail delivery take-Uber

Uber takes the title of 2015’s most controversial company to date, with disgruntled taxi drivers in France and the USA protesting against the service within the last few days. However, it’s not just the travel sector that Uber wants to change; it has reportedly joined forces with the likes of Tiffany and Hugo Boss to pilot a luxury goods home delivery service for designer shoppers.

Over time, Uber’s aim is to combine retail fulfilment and passenger services, to bring down the cost of transporting goods – definitely one story to keep an eye on.

  1. Honey, I shrunk the high street

They say size doesn’t matter, but everything seems to be getting smaller in 2015. Supermarket chains have turned their attention to the c-store market, while another traditional big box retailer – Ikea – has announced its first UK foray into small format stores.

Even larger retail space is being divided and conquered; Asda has teamed up with Decathlon to launch a ‘store within a store’, while Argos will be rolling out a number of collection points within larger Sainsbury’s supermarkets.

Which stories have defined your retail year to date? Tweet us @Vodat_Int with your views.

 

Apple Pay: there’s a lot more retail and hospitality needs to get right before taking a bite

Like most technology vendors, we’ve been eagerly awaiting the formalisation of Apple Pay’s launch in the UK – and paid particular interest to which retailers and hospitality vendors will be first to launch the service.

Boots, Dune, JD Sports and New Look are early retail adopters, while Costa, KFC, Pret A Manger, Nando’s and Wagamama are all flagship Apple Pay candidates on the hospitality side.

Of course, whilst this has novelty value at the moment, there is still a consumer adoption mountain for Apple Pay’s advocates to climb. For starters, the function is only available to Apple Watch, iPhone 6 and iPhone 6 Plus users – those devices equipped with NFC technology – so it will take time for earlier technology users to make an upgrade.

Also, the concept of mobile payments is still very young. Don’t forget, it’s only in the last 18-24 months that we’ve seen contactless take off as a convenient transaction method; and that’s using debit cards, a familiar means of paying for goods.

Speaking of contactless, this brings me to another point. The purpose of these emerging payment technologies is to make life quicker and more convenient for the consumer. Giving them the chance to use a niche payment service like Apple Pay is fair enough, but many retailers and hospitality vendors still haven’t perfected their current transactional offering.

In today’s customer-centric society, getting the basics right cannot be underestimated. Adding new payment channels puts greater strain on stores and hospitality venues – devices, data, networks, staff knowledge, customer service etc. Without a solid foundation to build on, businesses risk adding to a house of cards that could collapse at any second.

One thing we do know is that mobile commerce has increased significantly in importance over the past 12 months, so it’s likely that mobile payments will follow suit. While consumers are coming to terms with using their smartphones as a payment device, retailers and hospitality companies have a prime opportunity to refine their existing transactional technology, ahead of Apple Pay’s widespread launch further down the line.

For more payments insights visit our sister site, The Payments Network.

What’s in store for stores in 2015? 3 retail game changers

Retail never stays still – if anything, it’s moving faster than ever. This year alone, we’ve seen growing adoption of click and collect and contactless payments, to name two examples. But what will be the major influences changing retailer/consumer relationships in 2015?

In our final blog of 2014, we’re looking towards the year ahead – and predicting what’s in store for retail stores next year. Here are our top 3 most influential trends:

  1. There will be more devices in the store

From mPOS tablets being operated by sales associates, to mobiles being utilised by consumers to showroom, digital touch points will become an even greater part of the store experience. This will place additional strain on retailers’ data networks.

Those who triumph will offer reliable connections for staff and robust complimentary WiFi connections for the customer.

  1. Technology will personalise store shopping

We touched on the store becoming a theatre of dreams in a blog post earlier this year, and this trend will most certainly continue into 2015.

Technology such as near field communication (NFC) and Bluetooth beacons, are already being piloted by major retailers like John Lewis and House of Fraser; this points towards in-store interactivity dominating next year’s marketing and customer service agenda.

  1. Reputations will thrive or dive on payment security

With more consumers than ever using credit and debit cards to pay for goods, data breaches could prove devastating to retailers’ reputations. From June 30th 2015, businesses accepting card payments will need to meet PCI DSS v3 standards.

As a result, the race will be on to upgrade current payment solutions and reduce scope for PCI compliance before legislation comes into force.

For further information about payments security in 2015, visit the Payments Network, our online community for retailers and hospitality vendors.

What are the big payments issues we’ll be talking about in 2015?

It seems only yesterday we were welcoming in the start of 2014, wondering which payment talking points would dominate the agenda during the months ahead. Yet now we’re starting to form our next batch of New Year’s resolutions – and putting a new set of payment predictions together – for 2015.

There are of course still two months remaining this year, and things can change quickly in the world of payments. However, we’ll be given an insight into some of 2015’s hot topics at the upcoming Cartes Secure Connexions event in France, which takes place between 4-6th November.

Digital dominates the programme at Cartes this year, which is no surprise considering the exponential rise of mobile usage within retail. Much of the discussions will be surrounding location technologies such as iBeacons and NFC; it will be interesting to hear the industry’s thoughts not just on how geo-based connectivity will transform consumer relationships, but how it will impact shoppers’ payment preferences.

The future of currency will also be under debate, focusing on cryptocurrencies and mobile wallets. Bitcoin is sure to provoke strong reactions – PayPal founder Peter Thiel recently proclaimed his scepticism towards it – while Apple’s announcement of its first mobile wallet has reignited concerns surrounding ‘tap to pay’ security.

On the subject of protecting customers’ payment information, recent breaches for major US retailers such as Home Depot and Kmart have put the issue of data security as a whole under the spotlight. It’s interesting, though, to note that most of the Cartes sessions focus on rebuilding and maintaining customer relationships, rather than how to minimise the risk of information compromise. This is a subject we have discussed at length in our online community, The Payments Network.

Though we’ll have to wait a few more weeks to see exactly what unfolds for the industry in 2015, the Cartes programme has highlighted one interesting issue regarding the future of payments: we might be reaching new levels of sophistication and digital interactivity, but at the same time we’re still trying to address age-old concerns.

How long will it be before cash becomes obsolete?

It seems wild to imagine a world without cash – up there with teleporting to work or going for a week’s trip to the moon. But paying for goods with coins and notes could soon become a thing of the past, if consumers’ appetite for card transactions continues to progress at its current rate.

According to the latest World Payments Report from Capgemini and Royal Bank of Scotland (RBS), card payments are expected to rise by another 10% this year, reaching 366 billion transactions worldwide. This won’t surprise the developed world, but much of the gains being made currently are in underdeveloped non-cash markets such as China.

The convergence of technology is also supporting plastic’s progress; Capgemini predicts mobile payments will grow by 60.8% in 2015, taking over online transactions as the most popular transaction format. New entries into the m-payment market such as Apple Pay and the enhancement of more established services such as Google Wallet will only accelerate this change, provided they offer a secure, user-friendly experience.

And herein lies the crux of this payment shift: as customers move from cash to card, the responsibility for safeguarding their details moves to the retailer. If shoppers are pickpocketed, they only have the perpetrator to blame; if their card details are breached, the retailer’s payments processing software comes under fire.

Naturally, industry bodies such as the PCI Security Standards Council are introducing new security standards to protect consumer data – just look at Target and Home Depot in the US to see the potential scale of payment information breaches – but in many cases, this has led to payments providers developing convoluted solutions that are beyond the comprehension of many businesses.

What retailers need right now is to find the most robust and straightforward way to encrypt and protect customer information. Whilst meeting the highest security standards before they are mandated might not be top on the list of priorities, card payments are an unstoppable force – and could quickly stop working in retailers’ favour should their systems be hacked.

As the saying goes, it’s better to be safe than sorry.

Are current networks up to managing the customer journey in store?

News that Boots is to give customers personalised offers through its new app, in conjunction with its Advantage Card, shows that retailers are upping the ante on loyalty. But the reasons seem to be more to do with gaining greater insight into customer shopping habits than just winning more business.

Retailers have for a while been struggling to solve the problem of being able to identify customers in store in the same way as they can on line; most consumers remain invisible to retailers in store until they come to actually buy something, before which they may have left the store for all sorts of unrecorded reasons.

No wonder Boots has made this latest move and why most retailers are either implementing WiFi or plan to; the theory goes, if I can give customers a reason or inventive to identify themselves in store, then I can meet their needs much more personally and fix any problems as they arise.

Ruth Spencer, director of loyalty and multichannel at Boots UK, said: “We know that our customers love to receive personalised offers on the products they use the most and 87% of our customers use the coupons they receive in their quarterly mailings.”

The next challenge in store will be to join the dots – link people counting, WiFi, geo-location, the point of sale and kiosks together in order to track the customer journey in store.

The technology that drives this network will have to be robust, always-on and responsive to traffic flows. Many current network architectures, hardware and telecoms are simply not up to the task. Worse, many retailers tack on new network technology as they go, so not only is the network not inter-connected, it may be costing far more than it need to because of multiple suppliers and service agreements.

What’s the real reason card payment usage in the UK continues to grow?

The UK Cards Association has this week announced that consumer card spending surpassed £0.5 trillion for the first time in 2013. According to the report, nearly 75% of all retail spending is now through credit and debit cards in the UK, a big increase in comparison to ten years ago, when it lingered below the 50% mark. This has left us questioning, why?

Electronic payment methods have been around long enough now, that people of all demographics have felt comfortable using them for some while – so this is a doubtful cause for the constant increase, although it may be a contributing factor.

Some may blame consumers’ growing reliance on credit cards, however there has actually been a 16% fall in outstanding borrowing on credit cards since its peak in 2005, as the economy finally seems to have made a turn in the right direction. If anything, this would impact negatively on card payment figures.

In-store payment innovations such as contactless and MPoS give consumers a more exciting format to use and they may be encouraged to pay this way than through traditional methods. The ease of both payment types offer customers more convenience and speed – two things that consumers are increasingly craving.

Hand-in-hand with an increase in card payments is the growth of e-commerce – if you want to shop online, you simply have to pay electronically or you can’t make an order. With the growing spectrum of delivery and collection options being made available, paying online is sometimes the best option for time-pressed consumers.

The world is becoming ever more electronic in all aspects of life and consumers want the convenience and ease of paying by card. For large establishments, this can sometimes pose a problems with updating systems and connectivity on a large scale, but ensuring all parts of a business are networked in together streamlines the process and will inevitably impact on a company’s bottom line.

Have contactless payments finally reached a tipping point?

The concept of contactless payment was met with mixed reactions when it first launched in the UK in 2008, and it has taken a while for Britons to warm to the payment method but it seems the tipping point has finally emerged.

According to The UK Cards Association, contactless payments broke the £100million barrier for the first time in March 2014, with final figures reaching £109.2million – three times the total expenditure for the same month last year. One in three consumers now owns a contactless card, which can be used to make transactions up to £20 when touched on a reader.

So why has contactless suddenly become an accepted mainstream payment method? Card providers offering this option have worked hard over the last 12-18 months in particular, to ease any concerns consumers have regarding their security, and to also educate them on how contactless works – highlighting potential issues such as card clash.

Equally, retailers have embraced its convenience and installed contactless payment systems so that customers can pay for small value items on the hop. EAT became the first UK restaurant chain to offer the service in 2008, but consumers can now make touch transactions at most retail outlets including McDonald’s, Boots, Pret a Manger and Starbucks.

One major factor has been the adoption of contactless technology by the transport industry. Selected bus and train services already offer ‘touch in’ services and the London Underground is trialling the use of contactless debit card payments in place of its current Oyster Card system, with a view to rolling out the facility across the entire network in the near future.

With major travel operators and leading international brands giving consumers confidence in contactless, now is the time for retailers to join the pin-free revolution and install contactless readers alongside their existing payment solutions. Before long, contactless will evolve from a novelty to a must have, and those not offering it will be left behind.