Orange France. Delivering Digital Commerce in Retail to Enhance the Customer Journey. Copyright 2015 GSM Association

Transcription

1 Orange France Delivering Digital Commerce in Retail to Enhance the Customer Journey Copyright 2015 GSM Association

2 Digital Commerce More Power to your Pocket About the GSMA The GSMA represents the interests of mobile operators worldwide, uniting nearly 800 operators with more than 250 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and Internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces industry-leading events such as Mobile World Congress, Mobile World Congress Shanghai and the Mobile 360 Series conferences. GSMA s Digital Commerce Programme As the number of commercial mobile commerce services around the world rises, the GSMA continues to promote the use of common standards to enable the global interoperability of services and generate economies of scale. Working with mobile operators, regulators, banks, card schemes, retailers, transport operators and other service providers across the globe, the GSMA s Digital Commerce programme is active in driving the mass adoption of SIM-secured digital commerce services globally. Contact Digital Commerce digitalcommerce@gsma.com #digitalcommerce For more information, please visit the GSMA corporate website at Follow the GSMA on 12 2 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 12 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 3

3 Table of Contents About the GSMA 2 About Digital Commerce 2 1 Introduction 6 2 Opportunity 8 3 Objectives 10 4 Research Main Findings Orange s Action Plan Focus Areas 13 5 Use Cases Digital Basket Use Case Parking Use Case Cinema Use Case 17 6 Key Success Factors 18 7 Benefits Merchants Consumers Mobile Operators 21 8 Lessons Learned Digital Basket Use Case Parking Use Case Cinema Use Case 23 9 Next Steps Glossary GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 12 GSMA GSMA Orange France - Delivering Digital Commerce Digital Commerce in Retail in to Retail: Enhance Orange the Customer Case Study Journey Version 0.1 5

4 1 Introduction The retail industry is undergoing a dynamic shift in the way it engages with consumers. The internet has created a new marketplace for traditional retailing and introduced a new way of selling products to customers: only using the internet as a sales channel. The shift to the internet has established itself in the consumers domain too. More and more shoppers are embracing the web as an alternative shopping channel 1. With smartphone penetration constantly on the rise 2, there is increasing desire from consumers to be empowered to shop on the move, on the mobile, which, in turn, has grown the need for merchants to consider a combined bricks and mortar, mobile and on-line strategy. This poses many opportunities 3 but challenges also exist, e.g. what technology to use and how long that technology will be around for. Previous work by the GSMA 4 indicates that merchants are looking to interact with and help their customers at every step of the customer journey. A positive change in the consumer s shopping experience will lead to sustained loyalty in the long term. As merchants embrace new technology to support the customers to build an affinity with the merchant and brand, they want to ensure it integrates well with their existing deployments, while keeping the development of new solutions simple. In July 2013, the GSMA released the Mobile Commerce in Retail white paper, which documents the stages of the customer journey (planning, outward travel, in store, transacting, post transaction, return travel) and how mobile and contactless technologies can help retailers engage with the consumer in and out of store, both in the online and offline world, at various stages of the journey. In February 2015, another paper, Digital Commerce in Retail: Supporting a Common Mobile Customer Journey,was released - focusing on the planning and outward travel, in-store and transaction stages of the customer journey: looking at how mobile can help streamline the user experience along these stages, based on which technologies. Understanding these stages and how mobile can improve the customer journey allows merchants to develop and implement mobile strategies and thus increase the size of their customer base. This case study focuses on the in-store and transacting stages of the customer journey, and looks at how a French mobile operator, Orange, implemented their solutions in the French market to provide retailers and merchants with support in refining and putting in place their mobile strategy. The aim of this case study is to examine how mobile operators can help provide an answer to merchants and service providers requirements. Orange is one of the world s leading telecommunications operators with sales of 39 billion euros in 2014 and 155,000 employees worldwide at 31 March 2015, including 98,000 employees in France. Present in 29 countries, the Group has a total customer base of 247 million customers worldwide at 31 March Orange is also a leading provider of global IT and telecommunication services to multinational companies, under the brand Orange Business Services. 1 E-commerce accounted for 5.9% of the total retail market worldwide in 2014, or $1.316 trillion, and by 2018, that share is expected to increase to 8.8%, or $2.489 trillion. Source: Retail-Sales-Worldwide-Will-Top-22-Trillion-This-Year/ In 2011, the global smartphone adoption rate was 12.89%. In 2018, the same indicator is projected to reach 58.73%. Source: GSMA Intelligence 3 For details, see GSMA white paper Mobile Commerce in Retail: Loyalty and Couponing (January 2014). 4 For more information, see Digital Commerce in Retail: Supporting a Common Mobile Customer Journey (February 2015) GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 12 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 7

5 2 Opportunity Merchants are encountering various difficulties when trying to develop mobile-centric solutions. Implementing such solutions can be a very complex process both technically, to develop, and commercially, to launch. The time and costs associated with such ventures may make merchants feel reluctant to invest. There are also issues around how consumer data is handled. In many cases, merchants want to ensure they have full access to consumer data generated by mobile commerce services and are reluctant to become dependent on other parties. They wish to directly manage the relationship with their consumers and sharing transactionlevel data with third parties is perceived as encroachment in an area traditionally owned and controlled by them 5. Consumers also often express the need for online privacy and a fear that their data may be shared without their consent. In addition, as the technology landscape changes, there is a risk of consumer confusion due to fragmented solutions and shopper journeys. These may alienate consumers, who will be unwilling to use such diverging mobile-centric solutions. Orange realised there was an opportunity for mobile operators to offer their assets to merchants and help them overcome the challenges of dealing with technology, thus opening new opportunities for growth. 5 Source: GSMA white paper Mobile Commerce in Retail 12 8 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 12 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 9

6 3 Objectives Orange wanted to understand merchants requirements further by using in-market research, in France, to develop solutions that were consistent and simple to implement. They also wanted to find out what role the mobile operator could play to add value for merchants and consumers. Orange was not convinced that an operator-led wallet 6 was an approach that would resonate with the consumer or merchants, so they chose to research what solutions or support the mobile operator could provide to benefit the consumer (enablement, consistency and simplification of the customer journey) and the merchant (lower development costs, simplified technology challenges and choices, protection of consumer data within the merchant domain). Orange asked merchants where they could help, what use cases could make a difference and how the operator can be a beneficial player in an existing and well-established ecosystem. 6 A mobile operator wallet is the digital version of a physical wallet capable of storing digitised payment cards, loyalty cards, vouchers, transport tickets, etc. It is a mobile application that aggregates data from other applications on the consumer s mobile device. The mobile operator communicates directly with consumers, on behalf of merchants and third parties GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 12 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 11

7 4 Research Orange conducted various meetings with large, medium-sized and small merchants in France, spending time working with them in-market to understand and define the value proposition. Merchants also provided Orange with information on what solutions would be most suitable for them and how they would like to see the solution developed and deployed. Merchants also specified how much of the technical framework they would like the mobile operator to undertake. 4.1 Main Findings From the discussions with merchants three key points emerged: 1. Merchants were specific that they did not want a mobile operator wallet. It was important to keep their brand image and deal directly with their own consumers. They also highlighted that any solution needed to work without the mobile device switched on and even in areas with no network coverage so the consumer is able to transact at point of sale under all circumstances. 2. Having the ability to digitise consumers loyalty cards was a high priority for merchants. This was key for two reasons: Consumers often forget their loyalty card when coming into the store 7 so having it digitised on the smartphone means they are more likely to have their loyalty card with them. The same loyalty card is often shared between family members, but the retailer has no way of identifying which family member used the card nor when and what they bought in the shop - making it difficult for the retailer to target their marketing campaigns to the right member of the family. Merchants wanted the ability to assign each member of the family a unique ID number, linked to their phone. The retailer could then track each member allowing them to target coupons and marketing messages more effectively. 3. Some of the merchants Orange spoke to mentioned how their grocery stores had wireless handheld barcode scanners, which allow the consumers to scan products while shopping, creating a virtual basket residing on the scanner. These scanners are expensive to buy and maintain so each store only has a limited number. At peak periods, the availability of scanners may be an issue. At quiet periods, the merchant is still paying for the scanner to be in working order. The merchant wanted the ability to turn the consumer s NFC smartphone into a portable scanning device within the retailer application, which would not only mean that loyal consumers never had to go without a scanner but it would also reduce the cost on the merchant. 4.2 Orange s Action Plan Based on the in-market research and discussions with various merchants, Orange decided to develop a solution that would allow app developers, either the merchant or a third party, to interact directly with consumers and provide them with a rich mobile commerce service. Orange would work as the background technology enabler in specific use cases, providing the app developers with the core technical capabilities that exist on the handset or the SIM card (and the security it provides). This solution also allows the merchant to stay in control of their customer journey and the consumer s data. It also utilises the merchant s own application, keeping the consumer within the domain of the merchant. In addition, as Orange s research found, the solution needed to rely on a technology that allows consumers to transact even when their phone is in standby mode or turned off and when they are in low-signal areas. The technology capable of providing that ability to consumers is near field communication (NFC) Focus Areas The solution Orange thought was capable of providing these benefits was a package of Contactless Application Reader Programme Interfaces (APIs) that would be included within a Value Added Services (VAS) application plugin stored on the mobile device. The plugin would act as a mediator between the merchant or third-party applications that the customer downloads on their mobile device and an applet residing on the secure element and responsible for facilitating communication between the consumer s applications and a contactless reader. Orange developed their APIs with three primary use cases in mind: digital basket (shopping in-store), cinema (pre-ordering tickets and snacks) and parking (handling digitised parking tickets). The following APIs were chosen for inclusion in Orange s plugin service: API customer ID my Loyalty my Basket MEHolderID Open field Description VAS APPLET VAS PLUGIN / MANAGER CONSUMER APPS Contactless Contactless Reader Reader A unique ID owned by the mobile operator, allowing the merchant to identify the consumer. Tracks consumer interactions by using the mobile operator s own database of IDs, linking the merchant to the mobile operator ID. Can be used e.g. to identify individuals who share a loyalty card. Allows a plastic loyalty card to be digitised for use with a smartphone at point of sale (POS). Loyalty fields are captured and the points value is stored and updated when a user transacts. Contains the list of items the customer has scanned while in the shop. Allows an NFC smartphone to store the International Article Number (EAN) and quantity of items scanned directly onto the SIM, allowing the information to be passed via NFC to the POS at checkout. There is capacity for a maximum of 200 items. Provides the mobile application a unique user ID. This ID will let merchants track any interactions between a mobile equipment holder and any NFC point of contact. The access to this ID is restricted to the merchant / third-party app. An extra, open field of data (up to 50 characters) stored on the SIM and available to be used by the merchant for any purpose. Can be used in simple and secured mode. 7 According to a Worldpay report People, payments and the future, 92% of consumers use loyalty schemes at least once a month, however, 33% say they often forget to bring their loyalty card with them when they go shopping. VAS Figure 1: Orange s plugin service 12 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 13

8 5 Use Cases This section aims to demonstrate how Orange implemented the three use cases they identified and how the individual APIs could be utilised in practice in various customer journey scenarios. 5.1 Digital Basket Use Case The digital basket use case focuses on the main findings of the in-market research conducted in cooperation with merchants (for details, see section 4.1). The digital basket allows users to scan products directly to their basket in the merchant s mobile app. In addition, it provides extra information about products (such as recipes, videos, etc.), displays customised vouchers and coupons, and it also holds digitised loyalty information. 1 Customer opens merchant app, selects digital basket function (initial log-in is required). MEHolderID, my Loyalty 2 3 Customer uses mobile camera to scan bar/qr code of product or taps mobile against NFC shelf edge. my Basket Shows product information, adds purchases to basket. 4 Once product is selected, application automatically highlights offers or companion purchases. Customer gets the option to accept/decline coupon. my Basket, my Loyalty The following diagram provides an overview of the customer journey, calling out the APIs supporting the digital basket use case at each step. 9 User s phone confirms transfer was successful. Transaction can be completed using a range of payment methods. MEHolderID 5 Once offer is accepted, discount is applied and basket s total updated. 8 Offers and loyalty data are retrieved from the retailer s systems. 7 Basket data is transferred to the POS terminal, via a single tap against shop s contactless reader. my Basket, my Loyalty, MEHolderID 6 To check out, customer validates the basket on the mobile. Figure 2: Digital basket customer journey GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 12 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 15

9 1 Customer taps phone on an NFC reader (one tap) at parking gate. Parking app is recognised. It checks for a previous ticket on handset and deletes it, if found. New ticket is auto-created on UICC (SIM card). secured open field 6 At exit gate, customer presents handset to the NFC reader to confirm payment. 5.2 Parking Use Case This use case is based around the same APIs as those developed for the digital basket use case. The concept was created in partnership with Vinci Park, a global parking provider, and was launched in January 2015 in the city of Caen, France. The solution allows users to store a parking ticket on their mobile device, eliminating the need for paper parking tickets. The app also enables users to keep up-to-date with how long they parked their car and the estimated cost. All that is required from the user is a fast and simple one-tap interaction at the parking gate. The diagram above shows a typical parking customer journey, highlighting the APIs supporting this use case at each step. 2 App welcomes customer and displays arrival time - duration of parking begins. The gate opens, letting customer in. secured open field 5 Customer is allowed certain amount of time to leave car park. Request for additional payment is made at exit gate in the case of overstaying. Can be paid at some of the exit gates (credit/debit card) or back at ticket machine. Figure 3: Parking use case 4 3 Using the app, customer is able to check how long they parked for and indicated cost. This data is sourced online via the app or using fare information saved in the app (offline mode). When leaving, customer taps their handset at the ticket machine NFC reader, info about duration is passed, and payment (cash/card) can be made at the machine. customer ID. secured open field 5.3 Cinema Use Case The cinema use case uses the same APIs as the digital basket and parking use cases. It is currently not deployed, but Orange is looking to launch this service in the future. It enables users to pre-order their cinema tickets together with any food and drinks. It helps avoid long queues as customers who have pre-ordered queue separately and are served quicker. Often customers who have already purchased their tickets forget to order snacks before they arrive at the cinema. When they do arrive, there is a long queue for snacks so they are often discouraged from making a purchase. Booking tickets via the app will prompt the customer prior to arrival to pre-order any snacks, resulting in increased sales for the cinema as well as a seamless experience for the customer. The APIs supporting Orange s cinema use case are called out specifically at each step of the customer journey. 1 Customer selects movie and seats required. my Loyalty, open field for ticket access 5 Customer walks up to the screen and presents ticket to the attendant or taps mobile on the contactless reader. my Loyalty 2 Customer pre-orders drinks and sweets. Confirmation and payment made, a copy of the ticket and food voucher is created and stored on the UICC (SIM Card). my Loyalty, customer ID Figure 4: Cinema use case 4 3 Customer arrives at the cinema and opens snack voucher in the mobile app to collect their order. my Loyalty/open field for voucher Single tap on the POS contactless reader identifies the user to the attendant. Attendant provides the user with their purchases. my Loyalty GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 12 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 17

10 6 Key Success Factors The remainder of this document highlights the key success factors in Orange s implementation, as well as examples of the challenges that had to be addressed along the way and how they were addressed the aim is to provide best practice for mobile operators or service providers wishing to engage in similar enterprises. 1. A simple, open business-to-business (B2B) solution that merchants could understand, buy into, build the technical integration and extract value from. Allowing merchants easy integration into their apps and thus direct communication with their customers was key in securing their buy-in. From the consumers point of view, Orange s plugin service is a free application available for Android users and downloadable via a well-known and trusted channel, Google s Play Store. 2. An adequate testing period; lessons learnt during the trials were fed back into the next iteration of development. Using the digital basket case study, Orange trialled the first version of the plugin service, Retail API version 1, in a grocery store. Participants in the trial were staff from Orange. From the trial, Orange discovered that various parts of Retail API version 1 needed improvements, including the back office system, faster speed and a lowered weight applet 8. Retail API version 2 was developed based on these improvements and this is the current version available in France. 3. A developer friendly service. Orange launched a developer website 9 that allows merchants or third parties to download the relevant toolbox of APIs needed to implement the solution into their own NFC application from a central, easily accessible repository. 4. Well-identified benefits for all players. For details, see the next section. 8. Component responsible for facilitating communication between the merchant/third-party apps and the PIN Entry Device (PED) (or other NFC readers). 9. For details, visit GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 12 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 19

11 7 Benefits An obvious success factor is to create a solution that provides benefits to all parties involved, from those implementing to those using the end product. This section looks at these benefits in detail. 7.1 Merchants Using Orange s plugin service, the merchant deals directly with the consumer - increasing customer engagement and loyalty through a solution that keeps customers data private meaning the merchant has exclusive access to customer data. The plugin is quick and easy to integrate with any mobile application. In addition to saving on time and effort involved in the development work, there is no initial capital expenditure, only minimum ongoing operational costs. The solution provides an always-available, reliable service as it allows consumers to transact at the point of sale in battery-off mode too, allowing it to be used in areas with low data signal and when the consumer s phone has run out of battery. A simple customer journey is a benefit to the retailer as it is easier to train staff and communicate the service to customers. Future growth and deployment across multiple merchants and mobile operators can lead to a consistent user experience for consumers, further simplfying the merchants communications to their customers. 7.2 Consumers As highlighted previously, if Orange s solution is adopted by merchants on a wider scale, consumers will get a tailored mobile app and a customer journey that is consistent across merchants. From a user experience point of view, simplicity and consistency are very important factors to increase the chances of user adoption. Consistency maximises the solution s relevance to shoppers and facilitates the learning curve, in particular regarding the physical interaction tapping goods to put them in the digital basket and tapping at the POS. In addition, merchants using Orange s service provide their customers with a fast tap-and-go solution, which does not require the phone to be unlocked or even turned on for interaction. Further enhancements of consumers shopping experience includes useful product-related content (such as videos, recipes, etc.) and a simple interface to manage offers and loyalty accounts on the handset. The solution also increases consumers confidence in mobile as it stores all data securely, only sharing their data with the merchant. 7.3 Mobile Operators Such an approach benefits mobile operators as it can contribute to accelerating the adoption and launch of NFC services in the market. It also provides them with an opportunity to gain insight into a broad set of retail use cases, which in turn enables them to better assess how they can use their assets as enablers for the retail industry. Mobile operators role as a facilitator in this B2B space has the potential to open up a source of new revenue streams GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 12 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 21

12 8 Lessons Learned This section looks at the lessons learned by Orange, with a view to providing practical insight that can be applied in other future projects taken on by merchants, mobile operators or third-party service providers. 8.1 Digital Basket Use Case Orange partnered with two electronic shelf suppliers in France to launch the product scanning functionality part of the digital basket use case. Initial thoughts were positive, as the merchants agreed with the solution, but in practice the scanning functionality proved too complex to implement. Firstly, it was decided that the digital basket function should use NFC technology to provide seamless customer experience - adding goods to the digital basket requires a single tap of the handset on the electronic shelf label. But using NFC technology would entail stores being equipped with NFC smart labels and unfortunately very few stores are advanced in the deployment of such labels. Implementing the technology on a wide scale will take time according to suppliers. Secondly, to scan the products from the digital basket within the application, an extra NFC reader device would need to be installed at the checkout. In practice, the merchants did not want any other device than the POS system at the cashier desk; this meant that the digital basket would need to be transferred via the POS to the cashing system, which was far more complex to develop than the original use case. Due to these two restraints, Orange is now focusing solely on the loyalty part of the digital basket use case to enable consumers to have their loyalty cards digitised on their smartphones, and is actively working with POS integrators to make it easier to transfer the loyalty ID through to the POS. 8.2 Parking Use Case Orange s partnership with Vinci Park in parking has been very successful. The solution, a parking application called Simplypass, was launched in January 2015 in the city of Caen, France and there are plans to roll out the service in other cities across the country. Currently the app only focuses on digitising the parking ticket onto the user s phone and payment is done with a standard payment card. The ability to pay for the parking ticket using the smartphone will be added to the application after the preliminary phase of the launch. Prior to launch, Orange and Vinci Park had two main challenges to overcome. The first of them was related to the NFC readers currently installed in the parking barriers, which worked perfectly with contactless cards but often could not read the NFC chip inside the mobile phones. Orange and Vinci Park worked with an NFC reader design company, who designed new, bigger NFC readers for the parking barriers, which allowed the reader to read both cards and mobile phones. The second challenge was signage. Normally, a mobile app can push instructions and notifications to the user to ensure they know how to use it, but in this case, most of the customer journey happens offline, preventing pushed notifications from being delivered to users phones. To overcome this constraint, Orange and Vinci Park produced videos on how the mobile parking app worked and how to use it. However, they were not successful as a method of educating users on app functionalities. Finally, they produced instructional stickers to be placed on the parking barrier terminal to aid communication with the user. 8.3 Cinema Use Case This use case is currently not deployed in-market. Orange does have a demonstration and is in talks with a cinema company and a film production and distribution company to roll out the solution throughout France in the future. 22 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 23

13 9 Next Steps 10 Glossary Orange sees the need for consistent cooperation across mobile operators in their implementing markets. It is working closely with the GSMA to improve consistency within the plugin architecture and has actively contributed to the Value Added Services technical specifications 10 released by the GSMA s Digital Commerce Programme. It is continuing its development work and its collaboration with merchants and retailers in-market to develop further market sensitive solutions. Orange also aims to extend its solution, adding new functionalities to the currently available feature set, branching out into new verticals, cooperating with several operators, rolling out the solution in multiple countries and making the solution available on multiple platforms in order to make the solution fully interoperable. 10 One example is NFC.20: Value Added Services Plugin Design Proposal. Term API EAN NFC PED POS TSM VAS Description Application Programming Interface International Article Number Near Field Communication PIN Entry Device Point of Sale Trusted Service Manager Value Added Services GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 12 GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 25

14 1 in 5 e-commerce purchases in France happens via mobile. Source: Criteo Q Mobile sales are expected to increase from 3.7 billion in 2014 to 7 billion in 2015 in France. Source: Retailmenot, Infographic As of July 2015, there were 8,300,000 owners of NFC compatible mobile phones in France. Source: AFSCM 12% of internet transactions in France are done via mobile phones and tablets. Source: Retailmenot There were 318,747 contactless POS terminals as of July 2015 in France. Source: AFSCM 26 GSMA O GSMA Orange France - Delivering Digital Commerce in Retail to Enhance the Customer Journey 27

15 GSMA HEAD OFFICE Floor 2 The Walbrook Building 25 Walbrook London EC4N 8AF United Kingdom Tel: +44 (0) Fax: +44 (0)