how digital transformation is changing retail payments · sucharita kodali discussion: how digital...

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How Digital Transformation is Changing Retail Payments

George AndersonEditor-in-Chief, RetailWire

George Anderson has extensive executive-level experience in editorial, marketing and sales in the advertising, retail/wholesale and print, video and digital media industries.

Mr. Anderson has served as the editorial voice of RetailWiresince the site's founding in 2002 and has been interviewed by a wide variety of media outlets including the Charlotte Observer, Providence Journal, MarketWatch, NPR, Wall Street Journal Radio and others.

Previously, Mr. Anderson served as president and creative director of the IdeaBeat Creative division of IdeaBeat.com. His experience includes eight years with Progressive Grocer Associates/Maclean Hunter Media, where he held a variety of marketing services and sales management roles.

Moderating

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Presentation:

The Changing Customer and Technology Landscape• Sucharita Kodali, Principal Analyst, Forrester

Presentation:How Digital Transformation is Changing Retail Payments• Frank Maduri, VP, Global Sales and Business Development, Rambus

Panel Discussion:• Sucharita Kodali, Forrester• Frank Maduri, Rambus• George Anderson, RetailWire

Audience Q&A

Today’s agenda

Sucharita KodaliPrincipal Analyst, Forrester

Sucharita serves digital business strategy professionals. She is an expert on eCommerce, omnichannel retail, consumer behavior, and trends in the online shopping space. In her research, Sucharita covers such consumer-oriented topics as eCommerce forecasting and trends, merchandising best practices and conversion optimization.

Prior to Forrester, Sucharita was the director of marketing at Saks Fifth Avenue, where she managed the customer acquisition, retention, and market research efforts for the $2 billion luxury retailer's online channel. Prior to Saks, she held management positions at Toys R Us and the Walt Disney Company. Sucharita holds a B.A. in economics from Harvard University and an MBA from the Stanford Graduate School of Business.

Featured presenter

© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

The Changing Customer and Technology Landscape

Sucharita Kodali, VP & Principal Analyst

3© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

Mobile matters more than ever

4© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

Mobile metrics

Mobile traffic Mobile sales Mobile growth

46%49%

5%

Desktop Mobilebrowser

Mobile app

64%

32%

4%

Desktop Mobilebrowser

Mobile app

8%

36%

16%

Desktop Mobilebrowser

Mobile app

What percent of total online SALES

come from desktop, mobile browsers and your mobile app?

What percent of total online TRAFFIC

come from desktop, mobile browsers and your mobile app?

Please enter the percentage of YOY

sales growth from desktop, mobile

browsers and your mobile app?

5© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

Shoppers shop across screens and devices

6© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

Mobile commerce as a % of total eCommerce

21%

28%

31%

28%

43%

37% 36%

33%

2013 2014 2015 Q4 2015 2016 Q4 2016 2017 Q4 2017

Source: Forrester/Shop.org State of Retailing Online Studies; Adobe Holiday Digital Index

Percent of total online retail sales revenue that were purchased on mobile devices

7© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

Most shoppers shop on mobile devices

How often do you purchase physical goods on a mobile phone?

10% 10%

15%

21%

39%

5%5%9%

14%

19%

41%

11%

Daily Weekly Monthly At least monthly Never Do not use amobile phone

2016 2017

Source: Consumer Technographics North American Online Benchmark Survey (Part1), 2016-2017

8© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

This will drive more multiscreening than ever

Where do you use [your smartphone] to access the Internet?

60%

64%

64%

63%

66%

66%

67%

68%

48%

50%

51%

52%

52%

52%

53%

57%

While traveling

Restaurant/coffee shop

Friend or relative's house

Bedroom

In the car

In stores (while shopping)

Outdoors

Living room

2017 2014

25%

29%

35%

43%

45%

50%

52%

55%

21%

25%

32%

34%

35%

41%

42%

46%

School

Library

Home office

On public transportation…

On my daily commute

Bathroom

Work

Kitchen

Source: Forrester Consumer Technographics

9© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

Security is a challenge for shoppers

10© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

Security still matters for many shoppers

Base: 1,311 online consumers who do not purchase on mobile phones

Source: Forrester Consumer Technographics Q3 2017 (Retail and Travel Recontact) and 2018

Why don't you use your mobile phone to purchase products/services (using app or browser)?

22%

30%

30%

51%

21%

31%

35%

51%

I don't want to use up my data for shopping

I don't feel safe using mobile payment services

The screen on my mobile phone is too small

It's easier to make a purchase on a computer than on amobile phone

2018

2017

11© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

Universal checkout is coming

12© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

Consumers value selection…

Source: Forrester Consumer Technographics, 2015, Q3 2017 and 2018*In 2015, statement was phrased “I save time by shopping online”

67%

65%

63%

72%

69%

61%

72%

59%

59%

I find products online that I cannot findanywhere else

Shopping online is more convenient thatshopping offline*

I find better values and deals online

2015

2017

2018

% of online consumers agreeing with statement (5 point scale)

13© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

…and often prefer a single checkout online

Example: Google Shopping Actions45% of online consumers (and

61% of consumers 25-34) agree

with the statement: “I would like to

be able to shop online from

multiple retailers on a single

website or app”

Example: Lyst

14© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

Micropayments are an opportunity

15© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

16© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

eCommerce is growing around the world

17© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

eCommerce is growing around the world

$862

$459

$272

$1,426

$713

$464

Asia Pacific US Europe2017 2022

Source: Forrester eCommerce forecasts

eCommerce Sales (US$B)

% of

Total

16% 22% 13% 17% 10% 14%

18© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

Summary

› Mobile matters more than ever

› Shoppers shop across screens and devices

› Security is a concern for shoppers

› Universal checkout is promising

› Micropayments are an opportunity

› eCommerce is growing around the world

FORRESTER.COM

Thank you© 2018 FOR R ESTER . R EPR OD U C TION PR OH IBITED .

Sucharita Kodali

Twitter: @smulpuru

skodali@forrester.com

Frank MaduriVP, Global Sales and Business Development, Rambus

In his role with Rambus, Frank Maduri works with key stakeholders including retailers, banks, card schemes and Fintech companies to create innovative experiences that will transform retail and e-commerce.

Frank's wealth of experience includes 20 years in the mobile, payments, e-commerce, media and social messaging industries. He has held senior roles in companies such as Rogers Wireless, Bell Mobility and BlackBerry. He has also led two start-ups: Fastvibe (streaming media) and Mint Technology (mobile payments), and has pioneered and successfully introduced a number of innovations, such as mobile point-of-sale, mobile wallets, peer-to-peer payments and contactless payments.

Featured presenter

Webinar:How Digital Commerce is Changing Retail Payments

Presenter:

Frank MaduriVP of Business Development

Rambus

June 27, 2018

2

40% of retailers see a personalized customer

experience as their top priority (Source: Accenture)

Shoppers Expectations are Changing Quite Dramatically

Long queues cause UK businesses to lose 21 million

customers a year (Source: YouGov)

I like the ease of earning, c o llectingand redeemingpoints, and the variety of

rewards offered. The value o f the points is very good.

I can redeem w h enever I like.

Consumer desire for real-time redemption of loyalty driving

experience(Source: An Eagle Eye Industry Report, Dec 2017)

3

Consumers Demanding More Convenient Ways to Shop

Home Delivery Mobile Order Ahead

Scan & GoMobile Pay @ Pump

Click & Collect

Mobile Pay @ Table

Mobile Pay, Loyalty & Voucher

Amazon Go

4

Scan & Go Being Considered by Many Global Merchants

5

Scan & Go Redefines Self-Checkout to Let you Jump the Queue

Home Screen Scanner Cart Mix & Pay Digital Receipt

Existing user enters store and opens app

User opens scanner and begins scanning items

User given option

to mix card payment with loyalty points for real time redemption experience

User checks out, receives digital receipt and payment notification

User taps Pay button

6

Increase Capacity:Customer mobile devices >>“Bring your own POS”

Build Relationships:Better data and personalization >>Increased loyalty

Captivate Customers:Engagement vs. Showrooming >>

Upsell & cross sell

Driving Retailer Benefits

7

New Shopping Experiences are Driving “Remote Payments”

Key Considerations:

• Security – transition to cloud increases vulnerability of transactions

• Cost – card not present fees drive need for alternatives

• Conversion – app fatigue & checkout abandonment need to be addressed

MobileEMV Card Cloud

8

Security

Tokenization Secure Remote CommerceAuthentication

9

Cost

Card-not-present fees drive demand for low-cost alternatives API

e.g. PSD2 (Europe)Bank 1

API

Bank 2

API

Bank 3

API

PISP

Other:- ”Real-time” ACH- Account to Account- RTP

10

Conversion

?

Retailers need to consider other options

• Aggregator Apps• Marketplace• Universal Checkout

11

Digital commerce is changing the retail experience

• High consumer expectations

• Better in-store experiences

• Considerations to optimize conversion, security and cost

12

Thank You

Sucharita KodaliPrincipal Analyst

Forrester

Frank MaduriVP, Global Sales and

Business Development Rambus

Discussion: How Digital Transformation is Changing Retail Payments

Audience Poll Question #1

Which of the following is important to consumers for accelerating mobile payments within retail?

Sucharita Kodali

Discussion: How Digital Transformation is Changing Retail Payments

Question #1:Dollar General is the latest big chain to roll out scan & go capability for its shoppers. Walmart, on the other hand, discontinued its second scan & go test due to low adoption rates.

Is scan & go more viable for certain types of retailers? What are the keys to getting enthusiastic consumer adoption?

Frank Maduri

Sucharita Kodali

Discussion: How Digital Transformation is Changing Retail Payments

Question #2:The autonomous checkout technology being used at Amazon Go stores and in development by Microsoft saves consumers the trouble of scanning products as they shop.

Compare the pros and cons of this solution vs. scan & go.Will autonomous checkout have broad appeal among retailers?

Frank Maduri

Sucharita Kodali

Discussion: How Digital Transformation is Changing Retail Payments

Question #3:

How real is the promise of universal checkout? With all of the parties vying to establish the dominant platform, how do you see the competition resolving?

Frank Maduri

For more information

For RetailWire:

Al McClainCEO, Co-founderalmcclain@retailwire.com(561) 627-4974www.retailwire.com

For Rambus:

Frank MaduriVP, Business Developmentfmaduri@rambus.com(416) 721-4555www.rambus.com

For Forrester:

Sucharita KodaliTwitter: @smulpuruskodali@forrester.com