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.

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.

The store of the future: top trends and technologies from NRF 2015

At the start of the year, most industries wonder what their sector will look like in 12 months’ time. Luckily, retail doesn’t have long to wait – we were treated to an insight at NRF’s Big Show, which took place in New York City this month.

The store took centre stage at this year’s event, as retailers pondered how the world’s online obsession will continue to shape bricks-and-mortar shopping. It also provided an opportunity to see how technology vendors are pushing the boundaries, and blending the advantages of digital and physical shopping in a reconfigured retail experience.

There were hundreds of ideas and solutions to choose from, but here are our top NRF technology takeaways that are set to shape shopping in 2015:

Interactive displays

This cutting-edge solution reacts to consumers selecting goods from the shelf, changing the graphics on display to provide further product information. All activity is fed back to the retailer, providing comprehensive analysis of how shoppers interact with items around their store.

Connected glass

Building on the capabilities of interactive displays, connective glass enables consumers to select products to view and research virtually, and even send an item to the fitting room or checkout. It’s worth checking out Kate Spade’s pop-up pilot to see how ecommerce retailers are using this technology to venture offline.

MerryMirror

Gone are the days of looking over your shoulder to view the back of an outfit with Neiman Marcus and MemoMi Labs’ innovation. This smart mirror enables shoppers to view their outfits through 360 degrees, and save those images to compare with other items, send clips to their phone or share with friends for feedback.

Alternative ways to pay

The final point in the store purchasing journey is a hot topic in 2015. From biometrics to wearables and mobile wallets, technology vendors are looking to find the next development in consumer payments. One solution worth mentioning from NRF – even though it’s still in its infancy – is Touchless Commerce by Toshiba. This uses facial recognition technology to scan the items in a shopper’s basket and the customer’s face, before charging goods to the credit card linked to the facial profile.

For more insights into the future of bricks and mortar retail, read our blog: The store isn’t just a shop anymore – it’s a theatre of dreams.

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.

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.

Are you prepared for cross-channel mobile commerce?

With an estimated 12m tablet devices sold in the UK alone last year, and 70% of UK consumers now owning a smartphone, it isn’t surprising that the expansion of mobile commerce has reached a third of the UK’s online retail market. With this ratio on the increase retailers simply can’t ignore the potential of the mobile channel.

Latest results from the IMRG Capgemini Quarterly Benchmarking (Q4 2013/4) show that from November 2013 to January 2014, m-retail accounted for 32% of online sales with 6% of sales made via smartphones and 26% via tablet devices. This compares with 27% overall m-retail penetration in the previous quarter and represents 18% growth between Q3 and Q4. Visits to e-retail websites via mobile devices also increased and now account for 45% of traffic.

As consumer confidence in mobile and associated services continues to grow, it’s fair to say this upward trend will continue. But are retailers website geared up for the upsurge of consumers opting to shop this way?

House of Fraser is a fine example of a retailer who has made the bold move to support these changes in consumers shopping habits, having recently launched their mobile-first website, aimed at the new breed of ‘tappy shoppers’. It will mark the first of many retailers who will be revamping and redesigning their websites with an eye to the growing number of ‘mobile’ shoppers that are hitting their sites.

Retailers need to face the fact that their sites will have to be designed for tablets to support the growing number of mobile shoppers, as more consumers access the online channel at home, on the move and in store.  

Currently, the mobile channel offers a great opportunity for retailers to maximise the customer shopping experience and integrate channels to future proof omnichannel operations. With the sales medium still in its infancy, it could well become the dominant channel of the future, so cannot be ignored! 

Payments in an omnichannel world

The payments industry has seen many innovational developments over last few years, from mobile payments to contactless transactions and the mobile wallet – providing the consumer with a plethora of ways to pay. But which of these should retailers look to adopt? And where do they start when considering payments across their many channels?

The real issue is that after cash, credit and debit cards, and to a degree PayPal, none of the other payment types are really ubiquitous – or at least they aren’t yet. Retailers face the problem of not knowing which technology to invest in. Get it right and you have a head start on your competitors, get it wrong and at best the investment capital is wasted, at worst you have lost ground on your competitors.

A survey by Lightspeed Research reports that 59% of today’s customers are the omnichannel customers of the future. These consumers were broken-down into three categories, including: value-focused followers, data-hungry tech enthusiasts and tech-savvy social shoppers. To empower and influence these customers into shopping in the store environment, retailers must ask themselves two questions. How will new and emerging technologies affect customers? How will the retailer be able to support these initiatives?

Mobile point of sale (POS) is a key enabler of omni-channel functionality. Mobile POS allows the customer to conveniently research options, search for deals and check out without going to a central POS. It also empowers store staff to assist the customer while they are considering a purchase, delivering product information and the capability to check stock and place an online order if an item is out of stock. These aspects of mobile POS demonstrate the retailer’s commitment to customer satisfaction.

Being able to securely report on data from all sales channels, without any PCI implications also starts to open up the possibility of building customer loyalty profiles – with insight into who a customer is, where, when and which channels they shop via. This scenario will enable retailers to be a lot more targeted with their service offering, adapting to meet the needs of the omnichannel consumer.