Is retail ready for the mobile-obsessed shopper’s rise to power?

123: that’s the number of times the average 17-25 year-old checks their iPhone every single day. To put this into context, that’s 30 times more than 26-35 year-olds, and a whopping 86 times more than those aged 55+, according to the latest Kantar data.

This information is not surprising – we all know the younger generations are glued to their phones most of the time – but it does beg the question as to whether retailers are listening to such statistics?

Right now, it doesn’t matter too much on the whole, because older shoppers are those with the greatest disposable income. Last year, the average 30-49 year-old could enjoy up to £1,400 to spend on goods and services each month, compared to around £100 for the 18-30s.

However, today’s tech-obsessed shoppers are tomorrow’s young professionals, and today’s young professionals are tomorrow’s high flyers. And when their disposable income starts to grow, they’re going to be just as (if not even more) affiliated to their mobile device.

To capture this audience when they reach their most profitable, retailers need to be creating a mobile-first strategy today, which puts in place the foundations for effectively reaching customers via this ever-growing channel.

Some companies already are; Walmart recently announced the launch of an SMS service, which sends shoppers verbal directions through their smartphone to the item they’re trying to find. They can then text the word ‘chat’ to receive one-to-one customer service.

Others are beginning to incorporate mobile into their outbound marketing strategy. Just this week, Pizza Hut launched a number of ‘smart restaurants’ in mainland China, which uses iBeacon technology to beam coupons, special offers and competitions to patrons’ devices.

But there is one absolutely fundamental component to any mobile-based retail and hospitality strategy, and that’s the network. To connect with customers, customers first must be able to connect – and this means having a robust, secure public Wi-Fi connection.

Free Wi-Fi is still not a universal concept in UK retail, so a huge step forward must be taken by the industry if we want to truly engage with shoppers across the devices that have come to dominate their lives.

Until consumers are able to get online in-store in a frictionless manner, retailers are missing an opportunity to build and strengthen relationships with them. This needs to be addressed as a priority, before Millennials grow up to become the country’s biggest spending group, or the chance to drive mobile revenue could slip through companies’ fingers.

Everything is connected

How many times have you wanted to plug in a new device at home and had to go searching for a spare plug point, forcing you to search for an adaptor or an extension lead? By the time you find one, you just want to get connected – concerns about cheap extension leads or incorrect fuse ratings leading to current spikes, go out of the window.

While most domestic networks can cope with device after device being bolted on, the store network has to deal with a host of device, signal, security and availability issues, as retailers add more and more innovations in a bid to improve the customer experience.

The problem is, the network is often the last thing to be considered, on the assumption that it can cope.

It can’t.

In a recent survey we conducted for Vodat International’s report – why retailers and customers are becoming disconnected by the store network – and how to fix it – 1 in 10 customers complained about both the lack of WiFi connection, and the number of sales associates not equipped with the right technology to answer their questions on the shop floor.

In addition, clearly, not all WiFi is the same, as some networks simply do not perform to the same standards as consumers take for granted in their own homes. And for the store, when the network is unavailable, trading can grind to a halt with money lost until it is restored; on a recent visit to a well-known health foods chain store, one of the tills had been down for more than 24 hours – apparently due to a simple network issue.

Smart retailers will create networks on a sliding scale: flagships get the most robust and layered network, while smaller, satellite stores will get a more basic service.

However, more and more retailers are now upgrading all their networks simply to reflect the fact that they are adding mobile payment devices, doing more online business in the store, and trying to give both customers and staff a better digital experience.

These are taking the form of either dual ADSL or 3G/4G for customers who want more bandwidth.  Those wanting business class connections with SLAs are moving to EFM and Ethernet connections.

Ultimately – particularly in an omnichannel world, where the store is the gateway not just to itself, but the retailer’s entire inventory – the network is the store, and as such deserves broad, capable and reliable connectivity.

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.

3 sectors that can’t survive without contactless

Contactless has become the unstoppable force of the payments industry. From a relatively niche transaction method less than two years ago, its popularity has soared among consumers, with contactless spending increasing by 330% during 2014.

Although this change in consumer behaviour impacts businesses across the board, there are certain industries where contactless payments are proving critical to success. Here, we outline the opportunities in three of those sectors – and why it’s paramount that companies in these areas embrace the latest payments technology.

  1. Retail

It’s official: contactless is the new cash – it’s even driving down ATM traffic. ‘Touch and go’ style card transactions are the fastest growing payment method. According to recent Halifax statistics, contactless now accounts for £15 of every £100 spent, and have contributed to a 16.6% fall in cash withdrawals.

What does this mean for retailers? Put simply, today’s shoppers want to use their card for both low and high value purchases. With companies including Boots, Marks & Spencer, Sainsbury’s and WH Smith already proactively using contactless payments services, the technology is quickly moving from a differentiator to a necessity.

The need to offer contactless payments will increase over the next few months as well; from January 2016 all new POS terminals that accept MasterCard will be required to have contactless capabilities.

  1. Travel

Of all the sectors, travel has been most progressive in its use of contactless payments. Almost half of contactless payments take place within the M25, predominantly due to its adoption across the London transport network.

Since switching from Oyster to contactless, Transport for London has reached more than one million taps a day, becoming the fastest growing contactless merchant in Europe.

With one of the country’s largest transport networks leading the way, it is only a matter of time before customers demand to use contactless payments whenever they commute. This will, however, enable travel companies to address challenges such as passengers attempting to board with pre-pay cards that are out of credit.

  1. Hospitality

An important change takes place this September, which will catapult contactless to the front of the hospitality agenda: the maximum transaction value will increase to £30.

While contactless is already being used by some pubs and cafes to cover low value orders, raising the limit on payment levels will place new vendors – such as restaurants – in the ‘sweet spot’ for tap to pay technology.

Contactless will also become a crucial queue buster during busy periods. McDonalds and Starbucks are among those already using payment solutions to improve customer convenience, and even those outside the traditional hospitality environment, like market stalls and mobile food vans, will need contactless card payments to keep up with consumer demands.

Enjoyed this article? Check out our surprising stats about contactless payments for more insights.

How can hospitality vendors win back customer trust?

Customer service is a vital part of the dining out experience, but it appears some visitors to UK restaurants, pubs and cafés are losing faith with the service they are receiving.

Recent statistics from the Institute of Customer Service (ICS) revealed that satisfaction within the leisure industry declined during the first six months of 2014, with major brands including Subway, Costa Coffee, Caffe Nero and Pizza Express slipping in its customer satisfaction rankings. So how can this be rectified?

Losing customer trust is critical at this point in time, as competition is rife within the hospitality sector. With new eating and drinking venues opening across the UK each week, providing outstanding levels of customer service can prove crucial to gaining and retaining business over market rivals.

While satisfaction success relies heavily on the demeanour and knowledge of staff, there are a number of things that vendors can do to equip customer-facing personnel with the best possible set-up to carry out their job. For example, the majority of modern hospitality businesses depend on a secure and reliable internet connection; from online bookings to chip and PIN terminals, connectivity is essential for a seamless end-to-end customer experience.

In addition to making the lives of personnel easier by removing common causes for complaint, a reliable network connection can be an incredibly useful tool for marketing purposes. Many diners and drinkers have come to expect free Wi-Fi access as standard in bars and restaurants, which presents a perfect opportunity to communicate special offers or loyalty vouchers to mobile devices at the point customers log on.

Customer trust is difficult to gain and easy to use, and even the slightest mistake can damage a valuable relationship. What hospitality vendors must focus on is getting the foundations of an outstanding encounter in place before building the wow factor on top – from basic staff training to running all venue devices from one reliable network connection.

Hotels should capitalise on broadband services

The hotel industry could learn a thing or two from the retail industry, for which broadband technology is now a well-established fixture. The hotel industry is all about customer service and given that customer expectations are greater than ever, broadband services are critical to delivering complementary services and driving sales.

Primarily used to cut the cost of telephone calls, broadband networks in retail are now seen as the backbone for managing the store environment in a more dynamic way. Not only better connecting the retail estate, but delivering value added services.

On the private network, staff across the retail estate are connected in real-time, payments are highly secure and PCI compliant and the management of sales and merchandising data from the stores is used to analyse performance – with multiple stores and head office all connected via the network.

Operationally, broadband can also be used for e-learning, IP video and loyalty schemes.

On the public side, the network can support a host of engaging services, such as, media displays, MPoS, connection to online via a tablet and free WiFi services.

Free WiFi is now also expected in hotels and most importantly customers want good connection when using their laptops or tablets devices – especially when it’s for work purposes. The overall network service needs to be seamless and stress free so customers aren’t left waiting around to make a transaction because of bad connection.

Public networks can be used to deliver promotional content on media screens, better promoting hotel services such as Spa treatments and additional sporting activities.

It’s a win, win situation for both parties, with customers getting the most out of their experience and hotels capitalising on their facilities while delivering a more seamless service.

Top Tips: Using free WiFi to drive your hospitality business

Make free Wi-Fi work for your business

Demand for free wireless networks is no longer restricted to coffee shops and public libraries, in fact modern consumers are increasingly expecting Wi-Fi to be available almost everywhere they go; from their gym to their garden centre.

In spring 2013, a whole 27-mile stretch of the River Thames is set to have free Wi-Fi access made available for river commuters and in open spaces, with around 100 wireless hotspots being created.

Bradford and Leeds Councils have now launched free Wi-Fi across their City Parks in a project with Virgin Media Business and Global Reach Technology.

So how can you make it work better for your business?

Generate a new revenue stream

Providing consumers free Wi-Fi doesn’t have to cost you money. Why not consider offering consumers a free basic usage package but charging them for additional needs.

Providing Wi-Fi in high-use areas, such as in hotels, hostels and motorway service stations can often mean the user experience varies depending on how many people are accessing it at once and what they are using it for.

Scale your Wi-Fi

By setting up a scalable service and charging for premium users who might need file sharing or live streaming, you ensure a much more consistent service for each user and its fair, they more they use, the more they pay.

Get them online

Encourage your customers to get online and engage through promotions and discounts. Everyone has a mobile, so engage with them properly on it and market straight to them.

Reassure consumers over data security

More and more people own some kind of Wi-Fi enabled device but many people are still uncertain about security, particularly when it comes to payments. Take the time to educate your customers on just how safe wireless networks really are.

Surprise your customers

In many sectors, wireless connectivity is almost expected as an industry standard. People increasingly expect to see some kind of network access for wireless devices and the scope of business areas where it is expected as standard is increasing. If your business isn’t one, it could be very soon.

Brought to you by Vodat International