For today’s retailer, traditional commerce and new technologies are converging to ensure that brick-and-mortar shopping is at the forefront of the consumer experience.
In an interview with The Paypers held during Money20/20 Europe in Amsterdam, First Data’s Global Head of eCommerce, Shane Fitzpatrick and Peter OHalloran, Vice President and General Manager, eCommerce, International, share their insights on how accelerating digitalisation will impact the future for retailers, and provide a breakdown of the key takeaways from the event.
How will digitalisation change the retail space and what are the key trends that are driving digital transformation in retail?
Shane Fitzpatrick (SF): As the provider of commerce services to many of the world’s leading retail brands, First Data has a unique vantage point from which to observe how people’s shopping behaviours are changing and how digitalisation is influencing and driving these changes. The desire for instant gratification has led to a 24/7 demand for products and services, which means that international commerce must be easy for consumers to access, consume and enjoy in their own time. Of course, all this has to be powered by robust commerce enabling technology. First Data is at the epicentre of helping businesses respond to the ever-changing retail landscape.
Peter OHalloran (PO): I would add, First Data has millions of customer locations, across the globe, operating in the retail space. We consider ourselves partners with those companies, supporting their goals and advancing their technology and innovation demands. Having a global perspective means that we see market trends, as they are emerging. We see where digitalisation and technology have fundamentally shifted the way retailers work today. To give you some examples, many large retail stores such as Macy’s, Coles, and Target, have adapted to the threat posed to them by digital-only competitors, by entirely rethinking their customer experience. Some have added smaller footprint stores to their portfolio to focus and target a more niche consumer experience in certain locations.
IKEA’s ‘Click and Collect’ is another good example. With this service, online purchases can be ready for customers to pick-up at a time thats convenient for them. For IKEA, this requires a smaller store footprint. For consumers, it marries the convenience of an online order with the ability to go to an urban centre to collect their purchases. But that’s not all IKEA is doing to ensure that they are meeting consumer demands. They also participate in the sharing economy facilitating ‘Taskers’, through the acquisition of TaskRabbit services, to assemble IKEA furniture so customers don’t have to do it themselves.
SF - Uber and Lyft are two other examples of digitisation the customer experience. A taxi ride is a taxi ride, yet Uber leveraged the demand economy to re-architect the space, developing an entirely new proposition for consumers by digitalising the traditional model and creating an entirely new seamless and efficient offering in transportation.
Customers expect the same convenience when shopping in a store or online. What are some of the challenges brick and mortar retailers face when meeting these expectations?
SF – Providing instant gratification to consumers in-store and on-line in a consistent way is a challenge. Target is an example of a traditional retailer taking on this challenge. For many years, the conventional way for consumers to shop was to visit and buy in-store, but we see business models changing to meet consumer expectations for delivery within 24 hours. As part of their efforts to make shopping at Target even more convenient, they recently bought Shipt, a rapidly growing same-day delivery company.
PO – What is becoming clear to us is that traditional retailers that fail to innovate and adapt quickly, risk becoming obsolete. That said, there are many examples of how innovative businesses are reimagining what brick-and-mortar can be. It’s an exciting time, as companies develop creative solutions to make shopping easier and more convenient.
An example that comes to mind is Chick-fil-A, in the US. This quick service food restaurant reimagined their customer engagement leveraging digital commerce. First Data worked in partnership with Chik-fil-A to develop their mobile app—Chick-fil-A One. Customers are now able to place and pay for their order ahead, collect at a location of their choice without having to queue.
The App has been very successful —downloaded more than one million times in its first three days— it became the most downloaded app in the first month of launch.
What technology do you think can help today’s retailers catch up with their ecommerce competitors?
SF – In addition to accessing technology that supports global access, multiple local payment types, and a host of value added services such as fraud mitigation, all through a single point of integration, companies also need access to technology that support multiple channels and intelligent data mining for targeted marketing. These capabilities can aid retailers in identifying new markets, and assist the expansion of new product lines. Many retailers don’t have this level of capability in-house so they engage First Data to help them leverage these insights. The power of working with one partner for all these requirements is valuable for retailers worldwide.
PO – Virtual reality (VR) is one of the newer technologies that some retailers are also using to bring the customer back into the store. I recall Timberland trialled a virtual reality mirror, which was placed inside the front window of its flagship stores. The mirror faced out towards the street so that passers-by could stand in front of the window and ‘virtually’ try on different outfits. The trial resulted in an increase in footfall in these stores. This is a great example of how technology is being used to enhance the consumer experience.
Would you like to share with us what are your key takeaways from the event, focusing more on your area of expertise?
PO – For me, the artificial intelligence deep dive emerged as a major trend that everybody has been talking about for quite some time now. We got some pretty good insight about AI from a number of players in the space. Many of our six million merchants use AI to protect themselves and are using AI to speed up the ability to offer quality service to their clients and figure out how they might evolve. It’s like the Netflix experience where you’re asked what you would like to watch next and you’re given suggestions. That trend is something that has come to the floor.
SF – First Data are good partners and participants of Money 20/20. It’s a great opportunity for us to meet with our clients, technology partners, new innovators and disruptors. Most of the partners we see here are likely to be powered by First Data in some part of the world. The event is an opportunity for us to continue to learn and understand how the industry is thinking, to stay informed, to listen, and see what’s on the horizon for global commerce.
About Shane Fitzpatrick
Shane Fitzpatrick joined First Data in May 2015 and serves as the Global Head of eCommerce. A native of Dublin, Shane is a prominent eCommerce industry expert and a highly regarded leader with over 25 years’ experience in the payments industry.
About Peter OHalloran
Peter OHalloran joined First Data in 2013 and is Vice President and General Manager, eCommerce, EMEA and Non-Executive Director of First Data Polska S.A. (Poland). Peter is also the Founder and Managing Director of Gestion Consultancy and a Collaborator with Fintech Ireland.
About First Data
First Data (NYSE: FDC) is a global leader in commerce-enabling technology, serving approximately six million business locations and 4,000 financial institutions in more than 100 countries around the world. We are dedicated to helping companies, from start-ups to the world’s largest corporations, conduct commerce every day, by securing and processing more than 3,000 transactions per second and $2.4 trillion per year.
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