Technology In Your Business
Merchants’ current reality
In the first installment of this three part series, we outlined the expectations of modern day shoppers. Consumers want many options for interacting with merchants. They expect a personalized shopping experience that is consistent across channels and allows for both self-service and in-store help.
Today’s merchants face many challenges when it comes to meeting consumers’ expectations. Advances in technology have made many things easier but take time, money, and dedication. Small and medium sized businesses in particular often lack the necessary resources to keep up with the myriad technological advancements. Before we address how to meet shoppers’ expectations, let’s first consider merchants’ current reality.
Inadequate POS infrastructure
Many merchants are using an out-of-date POS system, or not using one at all. Some retail segments lag behind in POS adoption more than others. About two-thirds of consignment retailers, for example, use manual methods or nothing at all to track data. (1)
Additionally, even as consumers become more interested in digital payments, retailers are slow to adopt the infrastructure needed to accept this payment type. As of December 2014, only 13 percent of North American retailers surveyed by Statista™ were accepting customer payments via PayPal, and even fewer (eight percent) were accepting ApplePay®.
Inconsistency across channels
As customers expect consistency across all channels, from a merchants’ brick-and-mortar location, to their website, mail order catalog, mobile app, email and text messages, many merchants struggle with how to do it effectively. Many lack experience in at least one, and usually more, of the channels, and do not have the necessary technology to create a seamless cross-channel customer experience. Only a third of retailers have streamlined even the basics such as online ordering for store pickup. (2)
Although high profile data breaches have made most merchants aware of the threat of card data theft, more than one in five retailers are not PCI DSS compliant, and an additional 14 percent don’t know if they are PCI compliant or not. Over half of retailers are unaware of their data security requirements, while 40 percent lack any established policy adhering to those requirements. Many smaller merchants fail to employ strong security practices such as policies to enforce password security, which puts them at risk for brute-force attacks, data breaches and regulatory violations. (3)
Over their lifetime, loyal customers will spend 10 times more than non-loyal customers. (4) Loyalty programs are a proven, effective way to keep shoppers coming back. Yet, only 34 percent of SMB owners have a loyalty program in place. (5) Those that do often lack the reporting, tracking and customer communication capabilities that are available with a digital platform. Retailers face many challenges to implementing a loyalty program including time and cost constraints, lack of expertise, and the inability to customize a program for their clientele.
EMV® (Europay®, Mastercard® and Visa®), a global standard for the authentication of chip-based credit cards, is on the horizon. After October 1, 2015, Merchants who do not use a chip card reader to process card-present transactions when a chip card is presented, can be held liable for any fraud that occurs as a result. Approximately 70 percent of cards in the U.S. are forecasted to have EMV chips by the end of 2015. (6) EMV is looming over many merchants who are not yet prepared to accept this payment type. While merchants are not currently being forced to implement EMV, as the technology gains traction, many customers will expect it and may associate businesses that don’t as being less secure. Non-EMV merchants may lose the business of those customers to businesses that do use EMV technology.
With so many issues to tackle, merchants usually choose one or two areas to focus on with varying degrees of success. Be sure to join us for the third and final installment in this article series, where we’ll explore bridging the gap between shoppers’ expectations and merchants’ current reality.
1Bravertech™, http://www.bravertek.com/blog/new-study-42-of-retailers-want-to-replace-current-pos, 12/12/2014
2Forrester Consulting™, http://www.accenture.com/us-en/landing-pages/Documents/Seamless/Accenture-hybris-Forrester-new_2014.pdf, 1/2014
4Loyalty360™, http://loyalty360.org/resources/article/focus-on-loyal-customers-over-new-acquisitions, 9/6/2013
6EMV: Lessons Learned and the U.S. Outlook, Aite Group, 6/10/2014
- More Secure Ways To Pay
- Small merchants use tokenization
- What merchants should know
- Merchant cash advance for small business
- What is a merchant cash advance
- Bridging the Gap Part 1: New Customer Expectations
- Bridging The Gap Part 2: Merchant's current reality
- Bridging The Gap Part 3: Digital Commerce
- Breach Report
- Safe and Sound: 4 Tips to Secure Your Business
- Securing the Customer Experience
- Top Five Payment Technologies You Should Not Ignore
- Ways Merchant Can Hurdle Mobility POS Adoption Challenges
- The Time is Now to Develop a Mobile App
- Reasons Consumers Shop Online
- PCI for Retailers
- Loyalty and Payments
- E2E and Tokenization For Your Business
- Avoiding Fraud on your ecommerce site
- The Top 3 Data Breaches of 2014
- Today's Emerging Payments Trends
- EMV: What You Need To Know
- Learn What's New With PCI 3.0
- Integrated Payments and Security
- The Four Levels of PCI Compliance
- PCI Compliance For Restaurants
- POS Security Best Practices
- What does it take to be PCI compliant?
- Beyond cuisine
- What is PCI Compliance
- Article-More repeat business for your restaurant
- Protect Customer Data at the POS
At Your Fingertips
The impending shift in liability for card-present fraud is driving a transition to EMV. Are you ready? This handbook can help you prepare.
Vantiv Integrated Payments is ready for EMV and has the technology and a network of providers that merchants need to enter the new era of payments.