Making Leaders Successful Every Day

Transcription

1 Making Leaders Successful Every Day

2 The Future of Omnichannel Payments & Commerce Denée Carrington, Senior Analyst January 14, 2014

3 Agenda Where Are We Today? What Does The Future Hold? How Should Merchants Prepare? 2013 Forrester Research, Inc. Reproduction Prohibited 3

4 Welcome to the Age of the Customer 2013 Forrester Research, Inc. Reproduction Prohibited 4

5 Businesses need to be customerobsessed Forrester Research, Inc. Reproduction Prohibited 5

6 Sustained and explosive growth in connectivity and devices gives consumers an all-access pass. Always addressable consumers now make up 38% of US online adults. They access the internet multiple times per day, from multiple devices, in multiple locations Forrester Research, Inc. Reproduction Prohibited 6

7 Empowered consumers demand more control 2013 Forrester Research, Inc. Reproduction Prohibited 7

8 Empowered consumers are living a mobile-enabled lifestyle. 8

9 Mobile is the bridge between our physical and digital worlds, enabling unprecedented anytime, anywhere access to information, products and services.

10 Welcome to the Mobile Mindshift. The Always Addressable Customer 2012 Forrester Research, Inc. Reproduction Prohibited

11 Gone are the days when the payments landscape was relatively simple. Fixed POS Cash Cards credit, debit, prepaid/gift cards ecommerce Web including Card on file Remittances: Bill Pay, P2P, Money Send Cash Carrier billing and SMS 2013 Forrester Research, Inc. Reproduction Prohibited 11

12 Mobile Mindshifted consumers EXPECT contextually relevant, personalized experiences.

13 Mobile has transformed existing payment categories and created new ones. The evolving digital payments landscape Fixed POS Mobile POS ecommerce mcommerce Remittances: Bill Pay, P2P, Money Send Cash Cash Cards Web Mobile payments Mobile card acceptance Mobile web In-app payments Carrier billing and SMS Digital wallets Online, mobile, cloud, bar code, NFC New payment methods, categories, and technologies 2013 Forrester Research, Inc. Reproduction Prohibited 13

14 By 2016, ecommerce and mcommerce will be a fraction of total retail sales. $3.8T 2016 US Retail Sales ecommerce = 9% of retail sales e mcommerce = 8% of ecommerce $327B $27B Source: Forrester Research Online Retail Forecast, 2012 to 2016 (US) 2012 Forrester Research, Inc. Reproduction Prohibited

15 Mobile-enabled commerce gives more convenient access to the big prize. ecommerce = 9% of retail sales mcommerce = 8% of ecommerce $3.8T 2016 US Retail Sales e $327B $27B Mobile payments Mobile payments Source: Forrester Research Online Retail Forecast, 2012 to 2016 (US) 2012 Forrester Research, Inc. Reproduction Prohibited

16 Consumer use and interest in using instore mobile payments is growing slowly. How interested are you in using in-store mobile payments? 5% 58% 26% 11% 31% are using or interested in using instore mobile payments, a 5% YOY increase. Already use this Interested (4,5) Middle (3) Not interested (1,2) Base: 3,238 US Online Adults 18+ (Online Monthly or More) with mobile phones Source: US Technographics Financial Services Survey, Q3 2013

17 Agenda Where Are We Today? What Does The Future Hold? How Should Merchants Prepare? 2013 Forrester Research, Inc. Reproduction Prohibited 17

18 US mobile payments growth will accelerate and be driven by proximity (in-store) mobile payments. Revised forecast coming soon CAGR Mobile Payments Spending By Type $4, % $3,253 $40, % Mobile remittances Mobile proximity $2,445 $27,659 Mobile remote commerce $15,785 $1,787 $3,782 $1,250 $1,061 $709 $25,001 $549 $18,162 $11,579 $32,038 $38,653 $45, % (in millions) Source: Forrester Research Mobile Payments Forecast , (US) 2013 Forrester Research, Inc. Reproduction Prohibited 18

19 Digital wallets will transform the purchase journey and raise expectations for seamless payments and smarter commerce across all channels.

20 A storm of innovation is transforming the purchase journey and payments. Offers & coupons Product information Loyalty & rewards Mobile payment Source: Forrester Research 20

21 What Is A Digital Wallet? A digital service accessed via the web or a mobile application that authorizes payment transactions from one or more payment sources and facilitates other commerce-related features such as offers, coupons, loyalty rewards, electronic receipts, and product information. Source: Forrester Research 2012 Forrester Research, Inc. Reproduction Prohibited

22 32% of consumers who are interested in using in-store mobile payments spend more than $500 online. Spent more than $500 in past 3 months buying products online Interested in using your mobile phone instead of cash or a card in a shop 32% Middle 21% Not Interested in using your mobile phone instead of cash or a card in a shop 16% 0% 10% 20% 30% 40% Base: 4,503 US Online Adults 18+ (Online Monthly or More) Source: North American Technographics Retail Online Benchmark Recontact Survey, Q (US) 22

23 Omnichannel wallet platforms will enable a seamless experiences across channels. $3.8T 2016 US Retail Sales e $327B $27B Omnichannel wallet platforms Source: Forrester Research Online Retail Forecast, 2011 To 2016 (US) 2012 Forrester Research, Inc. Reproduction Prohibited 23

24 Awareness of digital wallets is high at 61%. Usage and interest is strong as well. Have you heard of digital wallets? 11% 39% 28% are using or interested in using a digital wallet. 50% Yes, I've heard of it and use it Yes, I have heard of it, but do not use it No, I have not heard of it Base: 4,525 US Online Adults 18+ (Online Monthly or More) Source: US Technographics Financial Services Survey, Q3 2013

25 Value added services (VAS) enable smart commerce, deliver incremental value. VAS will emerge within mobile digital wallet for use at point of sale. Offers & Coupons Enhanced Product Info Payment & Checkout Loyalty Rewards Enhanced targeting and relevance Merchant-funded; card-linked Integrated automatic redemption Barcode scans Product info and inventory availability Self-checkout via mobile; on-screen receipts Streamlined support of multiple payment systems and product options Streamlined checkout, stored billing and shipping preferences Enhanced tracking and rewards Integrated automatic redemption 25

26 Consumers want VAS that remove friction and streamline their buying experience. Which of the following features are you interested in having or use in a mobile digital wallet on your phone or other mobile device? Loyalty program points and rewards Coupons, discounts and special offers Ability to see payment card information & balances Price comparisons for items I want to buy Digital receipts for things you buy Product information for items I want to buy Request bill and pay at the table Digital tickets Save my shipping address & preferences for '1-click' Location-based offers or info from nearby shops & Make a reservation at a restaurant Place order before arriving at restaurant Ratings & reviews for items I want to buy Store digital identification (e.g., drivers license) Base: 2,105 US online adults 18+ (online monthly or more) who have used a digital wallet or are interested in using one. Source: North American Technographics Financial Services Online Survey, Q (US) 66% 65% 63% 69% 68% 68% 68% 68% 67% 76% 76% 75% 73% 72% 2012 Forrester Research, Inc. Reproduction Prohibited

27 Digital wallets are a natural extension of existing/growing consumer behavior. Which of the following have you used your mobile phone for in the past three months? To research a product 33% To read customer reviews of a product To purchase a product To take picture of a product to share with friends or ask for their To find or redeem a coupon/coupon code 24% 22% 21% 20% To take picture of myself in a product to share with friends To access my loyalty rewards account (i.e., to earn, track or use To scan 2-D barcodes (e.g., QR codes) To check-in to a store using a location-based application To store gift cards To store my membership card/loyalty card To compare physical store prices with online prices, when shopping To store/save a receipt To store an event ticket or flight boarding pass (e.g., Apple 15% 13% 13% 10% 10% 9% 9% 9% 8% To store transportation/commuting pass Base: 4,279 US online adults 18+ (online weekly or more) who are mobile phone owners. Source: North American Technographics Retail Survey, Forrester Research, Inc. Reproduction Prohibited 27 4%

28 What Lies Ahead. 1. Wallet options and value-added services will increase and improve. First-mover phase is winding down. Fast-followers will enter next. Quality of wallets will improve as first-mover learning is applied. Consumer adoption will rise as products improve. 28

29 The digital wallet landscape will become more crowded and have richer capabilities. Mobile Proximity (NFC) Mobile Proximity (Software) Omnichannel wallet Online only In market Bank & Merchant Wallet Trials Planned 2012 Forrester Research, Inc. Reproduction Prohibited 29

30 The new PayPal supports omnichannel commerce and has an array of VAS. In-store and Online Offers Manual or auto check-in with real-time 2-way location-based notifications Digital gift cards (Blackhawk partnership) Order Ahead Pay At Table Bill Me Later - Instant, 0% APR Credit 1-time Use Tokenized Payment Codes Beacon alerts consumers and merchants to shopper presence 2013 Forrester Research, Inc. Reproduction Prohibited 30

31 What Lies Ahead. 1. Wallet options and value-added services will increase and improve. Vendor Branded Wallets (PayPal, Google, V.me, Amazon) Bank Wallets Merchant Wallets (apps, card-on-file, white-label) Wallet Platforms 31

32 A cottage industry has emerged to help merchants create their own wallets, know their customers, increase engagement and sales. Starbucks & Dunkin Donuts wallet experts replicating similar model instore mobile payments. Omni-channel white-label wallet solution. INDEX A $7M startup of former Google Wallet folks creating an in-store commerce platform with omnichannel digital wallet Forrester Research, Inc. Reproduction Prohibited 32

33 MCX intends to help merchants harness their market power, unique assets, distinct customer data, and relationships for their wallets. The for us, by us merchant digital wallet. Goal: Create a better approach to payments that protects merchants, their customer data and delivers a better commerce experience. Approach: Wallet platform; Each merchant will have its own wallet instance, loyalty construct, etc. 33

34 Vendors are helping merchants leverage Passbook and Google Wallet as their own digital wallet platforms. Merchants with card-on-file solutions or a mobile app already have a starter wallet. Jumio is establishing a standard for leveraging Passbook as a wallet platform. imobile3 launched PassMarket mobile engagement hub Forrester Research, Inc. Reproduction Prohibited 34

35 What Lies Ahead. 1. Wallet options and value-added services will increase. 2. Commerce vendors will lower barriers and increase incentives for merchant wallet acceptance. Leverage the installed base of ios and Android wallet platforms (Passbook & Google Wallet) New wallet pricing models are challenging the binary status quo of card present vs. card no present (MCX, card networks and more) Acquirers, processors and POS providers are lowering the barriers to merchant acceptance and also competing to deliver greater value. 35

36 LevelUp offers to help merchants Save Money & Make Money with lower rates and greater revenues. Interchange Zero Payment Processing of transactions Advertising Campaigns of credit redeemed 2% 0% 40% 2013 Forrester Research, Inc. Reproduction Prohibited 36

37 Anywhere mobile created a new, non-card network called mshift. mshift redistributes revenue Consumers link to a bank account or line of credit. Traditional cards (networks) not allowed. No mshift account required. Uses ACH as the foundation, banks can access network via API Piloting with #1 bank in Northern California larger rollout planned for 2014 Similar philosophy as MCX 2013 Forrester Research, Inc. Reproduction Prohibited 37

38 Savvy wallet competitors are forming mutually beneficial partnerships within the payments ecosystem to achieve: 1. Consumer adoption (e.g., Square +Starbucks) 2. Merchant adoption (e.g., Discover + PayPal) 3. POS enablement (e.g., Ingenico, Micros, NCR, Verifone) 4. Acquirer support (e.g., Paydiant + FIS, LevelUp + Heartland) 5. Developer support (e.g., PayPal + Braintree, wallet SDKs) 2013 Forrester Research, Inc. Reproduction Prohibited 38

39 TSYS now offers Womply s Insights and card-linked Loyalty Cloud products to its small and medium merchants Forrester Research, Inc. Reproduction Prohibited 39

40 Womply offers customer CRM tools and insight into customer s broader shopping behavior Forrester Research, Inc. Reproduction Prohibited 40

41 First Data s Perka is enables a custom loyalty programs in a wallet solution Forrester Research, Inc. Reproduction Prohibited 41

42 What Lies Ahead. 1. Wallet options and value-added services will increase. 2. Commerce vendors will lower barriers and increase incentives for merchant wallet acceptance. 3. Emerging technologies will enable new engagement platforms and Uber-like payment experiences. First Buzz-word of 2014: BEACONS 42

43 Traditional commerce silos are converging with mobile supported by wallets platforms enabled by beacons Forrester Research, Inc. Reproduction Prohibited 43

44 Wallets + Beacons + POS will transform the in-store experience. What is a beacon? Uses Low-energy Bluetooth (BLE) technology to send and receive messages. Small, low-cost standalone devices or other Bluetooth enabled mobile handsets and tablets. Qualcomm shopkick PayPal 2013 Forrester Research, Inc. Reproduction Prohibited 44

45 Merchants will know who is shopping, can directly engage them and deliver personalized experiences. Check-out Check-in Enter Mobile # End of In-store Shopping Experience Start of In-store Shopping Experience 2013 Forrester Research, Inc. Reproduction Prohibited 45

46 When customers opt-in beacons + wallets enable real-time CRM. Anonymous customers become known customers. Online insight (clicks) can be enabled in-store (lingering near displays). Best customers can be proactively engaged by associates. Show-rooming can be turned into an advantage. Consumers can receive product information or suggestions. Offers, promotions can be delivered directly to in-store shoppers based on past shopping history or current browsing. Customer pain-points can be alleviated, such as request alternative size in dressing room. Invisible checkout and payment Forrester Research, Inc. Reproduction Prohibited 46

47 Who is piloting beacons? Here are just a few ibeacon Apple Stores PayPal Beacon piloting with merchants in 2014 shopbeacon shopkick & Macy s pilot (using ibeacon) PassMarket imobile3 launched Monday, will be available to Ingenico + Elavon + Sage + Mercury Payments + NCR Silver + shopkeep merchants Best Fit Mobile 4 Top 50 retailers to pilot in Q1 Index pilots underway 2013 Forrester Research, Inc. Reproduction Prohibited 47

48 Agenda Where Are We Today? What Does The Future Hold? How Should Merchants Prepare? 2013 Forrester Research, Inc. Reproduction Prohibited 48

49 Every connected device will be a commerce device. Ed McLaughlin, chief emerging payments officer, MasterCard

50 5 Things Should Merchants Do 1. Be customer obsessed. Your customer relationships are your competitive advantage. 2. Set a digital wallet strategy now. Wallets can enhance your customer relationships and increase engagement. 3. Reimagine in-store/multichannel engagement for your always addressable customers. Use this to guide wallet strategy. Prepare for convergence : engagement + loyalty, + payments on wallet platforms. Shift discussions from payments to he buying experience. 50

51 5 Things Should Merchants Do 4. Leverage your market power for payment and wallet acceptance. Reframe cost/value discussions with vendors. Insist they demonstrate economic value to your business. 5. As barriers to wallet acceptance falls, don t be afraid to test and learn. Know the 3Cs of consumer adoption: convenience, confidence and a compelling experience. Experiment with new capabilities that can help grow your business. 51

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53 Thank you Denée Carrington +1 Blog: blogs.forrester.com/denee_carrington