How smart devices are changing traditional commerce, by Dom Morea, senior vice president for advanced solutions and innovation at First Data
The evolution of smart devices has allowed retailers to provide an integrated buying experience that is quick, secure and available 24/7. Advancements in technology and consumer demand for what we at First Data call 'universal commerce' has meant that determining the difference between mobile commerce, e-commerce and the fundamental bones of traditional commerce has become much harder to separate.
Smart devices, for example tablet computers, smartphones, and many point of sale terminals right through to ATMs are powering universal commerce. These devices are able to access the internet, integrate applications, share information across multiple systems and provide personalised communications.
Smart devices add complexityWhether it's being used by a financial institution, a merchant or a consumer, each device has its own level of 'smartness'. However, despite wide consumer adoption the complexity of implications for merchants and financial institutions remain prominent.
For instance, in the consumer debit and credit card arena, a number of alternative payment service providers have been able to challenge traditional service providers through the means of universal commerce. Conversely, the emergence of new threats also brings new opportunities to traditional players; First Data conducted a survey that found that consumers prefer to have their bank issue a virtual wallet application over other providers, such as social networks or mobile operators. With this in mind there is a clear opportunity for financial service providers to defend their territory and take advantage of this growing trend, as consumers gradually move purchasing habits and financial management to their mobile devices.
The merchant environment is similarly evolving. Today, consumers can use their personal smart device to simultaneously access an online outlet while physically standing in-store, the merchant being mindful that the individual can also access a competitor's online store. For this reason alone, merchants must concentrate on developing a multi-channel retail strategy to engage consumers and in-store smart devices.
Harnessing universal commerce In order to harness the full potential of the universal commerce buying cycle, merchants must perform the balancing act between having a mobile application, online and in-store presence while existing in other places of consumer influence and consumption, such as social media, search engines and daily deal sites. This includes maintaining consistency across all channels, both online and in store to maximise a positive user experience. For example, consumers should experience matching discounts, prices, loyalty points, redemption and return policies, as well as a parallel navigation structures for both mobile and online portals.
An additional, targeted strategy for engaging consumers involves relevant, timely communications and value-add services. For example, by obtaining appropriate marketing and location permissions in advance from consumers, relevant messages can be bound to customer product searches, loyalty programme status, analytics related to past purchasing patterns and catalogue activity.
Merchants should also consider how they can enhance the consumer experience and streamline transaction processing with in-store smart devices. A fundamental capability of merchant smart devices is their ability to integrate with consumers' online activities, whether retailers use traditional in-lane checkouts or mobile check-out systems. This can be seen when a consumer accepts an electronic coupon or purchases a daily deal. The merchant's transaction processing system should apply that offer to the appropriate transaction automatically at the time of customer purchase.
Considering the changing mobile landscape, merchants need to consider mobile payment capabilities as well, looking at barcode scanning on mobile devices, contactless payments and virtual wallets, all conducive to not only accepting mobile payments but also allowing consumers to track offers and loyalty redemptions on their own smart devices which are automatically applied to their purchases.
For merchants and financial institutions, smart devices are increasingly becoming central to providing an integrated customer experience. For consumers, the impact has been extraordinary. Ultimately businesses that employ all encompassing universal commerce strategies and embrace the many different ways it drives consumer engagement, will benefit from the fruits of the ever powerful smart device.
First Data makes payment transactions by debit or credit card, gift card, check or mobile phone, online or at the checkout counter, secure, fast and easy for merchants, financial institutions and their customers.
