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Retail Payments When the Future Becomes Now

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  • 1. Retail Payments: When the Future Becomes Now Benchmark  Report  2013   Nikki Baird & Brian Kilcourse, Managing Partners March 2013 In Partnership With:
  • 2. ii Executive Summary In three years' time, retailers expect mobile and digital payments to catapult from almost nothing to a major piece of their payments environment. But they aren't looking to their traditional payment partners to lead them through this maze of payments change - they expect consumer- focused technology companies to take charge. Why would retailers look in this direction? Because they expect that consumers - not retailers, and not even traditional payments providers - will dictate how payments will be presented in the future. Key Findings • A surprising number of retailers (38%) agree that they are stuck until some solution to rising processing fees is presented to them. But “uncertainty about the technical future of payments” trumps all, even for Winners. • A winning Payments behavior is to focus first and foremost on the customer, and then to worry about “everything else”. While Retail Winners are happy enough to optimize internal processes to gain cost savings, their primary focus is on what is right for the customer. Cost is secondary. • In the largest organizations, it appears that, even though they are the main believers of a dedicated "Customer Experience" organization, payments does not appear to be a strategic consideration in that experience. • Store Operations seems to be the largest sticking point for payment innovations, even topping the list for Winners as an organization requiring more education about payments. • Absolutely no payment technology's value translates into budgeted plans for the future. This is a direct result of much of the uncertainty that retailers feel about the future direction that payments will take. Even mobile - the current darling of payments - has at best a moderate group of retailers willing to invest. BOOTstrap Recommendations Next generation payment processing needs to be moved near the top of the corporate "to-do" list. Even in an environment that contains a lot of uncertainty, retailers are not completely boxed in while they wait for titans of other industries to battle to the bitter end. While consumers will most likely have the most say in the success of future payment innovations, that means retailers have at least as much ability to influence consumer acceptance as anyone else can - as Starbucks and Square have proven with their own remarkable acceptance rates. To stay prepared for whatever may come, retailers need to focus on first consolidating their own internal payment mechanisms, so that they can take whatever form of payment comes at them from whichever channel a consumer happens to be in. Consumer technology companies may have the advantage when it comes to gaining consumer acceptance of payment innovations, but don't count out the incumbents. As always, retailers need to be cognizant of any impacts to security and consumer privacy, and in part with that, they should make sure that they are getting the right people involved - not just from a tactics standpoint, but from a strategic perspective. Payments is part of the customer experience, and should be treated that way.
  • 3. iii Table of Contents Executive Summary......................................................................................................................... ii Research Overview .........................................................................................................................1 Why Payments, Why Now? .........................................................................................................1 Defining Winners and Why They Win ..........................................................................................2 Methodology ................................................................................................................................3 Survey Respondent Characteristics.............................................................................................3 Business Challenges.......................................................................................................................5 Accelerating Change....................................................................................................................5 Any Channel, Any Time, Anyhow ................................................................................................7 The Challenge: Uncertainty & Loss Of Control............................................................................8 Looking For A Path Forward......................................................................................................10 Opportunities .................................................................................................................................11 Staying Focused On The Customer...........................................................................................11 Where’s The Innovation?...........................................................................................................12 Follow The Leader(s).................................................................................................................12 What About “Everything Else”?..................................................................................................14 Organizational Inhibitors................................................................................................................16 A Trifecta of Inhibitors................................................................................................................16 Getting Down to the Nitty Gritty .................................................................................................17 Gaining Stability.........................................................................................................................19 Gathering the Troops.................................................................................................................19 Motivating the Troops ................................................................................................................20 Educating The Troops............................................................................................................21 Small, Medium, Large................................................................................................................22 Technology Enablers.....................................................................................................................23 All Hail Mobile! ...........................................................................................................................23 Wait and See .............................................................................................................................24 What If . . ...................................................................................................................................25 Solving the Catch-22..................................................................................................................25 BOOTstrap Recommendations .....................................................................................................27 Form Factor Follows Function ...................................................................................................27 Watch Consumer Technology Innovators – But Don’t Ignore The Incumbents.........................27 Be Proactive About Security And Privacy..................................................................................27 Get The Right People Involved..................................................................................................28 Appendix A: RSR’s Research Methodology..................................................................................29 Appendix B: About Our Partner.....................................................................................................30 Appendix C: About RSR Research................................................................................................31
  • 4. iv Figures Figure 1: The Tide Turns - Fast.......................................................................................................1 Figure 2: A Relentless Drive............................................................................................................2 Figure 3: Changing U.S. Behaviors.................................................................................................5 Figure 4: Credit Dominates..............................................................................................................6 Figure 5: All Of The Above ..............................................................................................................7 Figure 6: Anyway You Want It.........................................................................................................8 Figure 7: Fear And Loathing On The Payments Trail......................................................................9 Figure 8: Stuck? ............................................................................................................................10 Figure 9: Making It Easy................................................................................................................11 Figure 10: Tech Companies Show the Way..................................................................................13 Figure 11: Lead, Follow, Or Get Out Of The Way .........................................................................14 Figure 12: the New Vies With The Old ..........................................................................................15 Figure 13: Too Much Change, Change, Change...........................................................................16 Figure 14: One Size Does Not Fit All.............................................................................................17 Figure 15: At Least Customers Won't Call Us if There is a Problem.............................................18 Figure 16: Make Me Move.............................................................................................................19 Figure 17: Getting Store Ops On Board ........................................................................................20 Figure 18: Winners Have More Troops .........................................................................................20 Figure 19: Teach Them and They Will Come?..............................................................................21 Figure 20: Customer and Cost Drive Value...................................................................................23 Figure 21: Waiting for Certainty.....................................................................................................24 Figure 22: Unconstrained Thinking................................................................................................25
  • 5. 1 Research Overview Why Payments, Why Now? The landscape of payments is like quicksand beneath retailers' feet these days. No sooner has a group announced a coalition designed to bring clarity to payments' future than a technology company or telecommunications provider announces a new lone-wolf attempt to carve out its own piece of payments real estate. Between payment industry mandates, titans of technology and telecom doing battle, the growth of smartphone adoption, and retailers' own forays into mobile apps and current hyper-focus on customer engagement, the winds of change around payments seem stronger then ever. The problem is, no one seems to know which direction they're blowing. RSR has long desired to produce a benchmark on the future of payments. Retailers have many legitimate concerns when it comes to payments' future - something that may be built and managed by other industries, but has no greater impact than on the retail industry specifically. We made our first attempt in 2009, when we discovered that retailers just weren't ready. 1 The mentality we encountered was primarily "If it ain't broke, why fix it?" How times have changed. Nothing demonstrates the breathtaking shift that has happened over the last four years more than Figure 1, below. Figure 1: The Tide Turns - Fast Source: RSR Research, March 2013 In three years, retailers expect mobile and digital payments to transform from almost nothing to a major piece of their payments environment - 19% of survey respondents to this benchmark believe that mobile payments will be their dominant form of payment in 3 years. And they anticipate that the cannibalization will come mainly from credit card and cash transactions. 1 Closing the Sale with the Connected Consumer: The Future of Payments, © 2009 RSR Research LLC 19% 4% 4% 11% 26% 36% 1% 5% 7% 19% 23% 45% Mobile or Digital Payment Other (Loyalty, gift card, etc) Check Cash Debit Card Credit Card Primary Payment Forms Today In 3Years
  • 6. 2 This problem challenges retailers of all shapes and sizes: • The smallest retailers (less than $250 million in revenue) expect to feel the greatest impact from mobile & digital payments - 0% accept them today, and 20% expect they will be the primary form of payment in 3 years. They expect the shift will be driven by a decrease in cash as the primary form of payment - 33% see cash as the primary form today, but only 10% expect it will remain so in 3 years. • The largest retailers (greater than $1 billion in revenue) expect to make the greatest inroads in reducing credit cards as their primary form of payment (42% today vs. 31% in 3 years). But while mobile is expected to increase (from 3% now to 11% in 3 years), the largest retailers expect debit cards to also pick up the credit card drop - 31% see them now as the primary form of payment, but 39% expect it as the primary form in 3 years. How do retailers anticipate riding out this tremendous shift in consumer behavior, assuming it comes to pass as planned? That is exactly what we set out to learn with this benchmark. Defining Winners and Why They Win RSR’s research always focuses on a category of retailers we call “Retail Winners”. Our definition of Retail Winners is straightforward. We judge retailers by year-over-year comparable store/channel sales improvements. Assuming industry average comparable store/ channel sales growth of five percent, we define those with sales above this hurdle as “Winners,” those at this sales growth rate as “average,” and those below this sales growth rate as “laggards” or “also- rans.” It is consistent throughout much of RSR’s research findings that Winners don’t merely do the same things better, they tend to do different things. They think differently. They plan differently. They respond differently. The topic of Payments, like every other topic we study, has a Winner's story in it. Retail Winners appear to have been on a relentless drive to reduce their exposure to the most expensive transactions - credit cards (Figure 2). Figure 2: A Relentless Drive Source: RSR Research, March 2013 13% 8% 3% 26% 5% 46% 0% 10% 3% 18% 15% 54% 14% 2% 7% 33% 16% 28% 2% 2% 7% 26% 28% 35% Mobile or Digital Payment Other (Loyalty, gift card, etc) Check Debit Card Cash Credit Card Primary Payment Forms Winners - Today Winners - In 3Yrs Others - Today Others - In 3Yrs
  • 7. 3 Winners are less reliant on credit cards today - having shifted purchases more towards debit cards than peers (35% of Winners see credit cards as their primary form of payment today vs. 54% of peers; 28% of Winners expect it to be their primary form of payment in 3 years vs. 46% of peers). The real question, though, is this: Do Winners pursue this goal as a cost containment tactic? Or as a customer experience strategy? The answer is both. As you will see in the sections that follow, Retail Winners consider every interaction a piece of the customer journey, and payments is no exception. But if they can save some money and introduce some efficiencies while they're at it - so much the better. Their peers might state the same goals, but the reality is that their actions reflect a completely different priority. Methodology RSR uses its own model, called the “BOOT,” to analyze Retail Industry issues. We build this model with our survey instruments. Appendix A contains a full explanation of the methodology. In our surveys, we continue to find differences in the thought processes, actions, and decisions made by retailers who outperform their competitors and the industry at large – Retail Winners. The BOOT model helps us better understand the behavioral and technological differences that drive sustainable sales improvements and successful execution of brand vision. Survey Respondent Characteristics RSR conducted an online survey from December 2012 - January 2013 and received answers from 98 qualified retail respondents. Respondent demographics are as follows: • Job Title: Senior Management (CEO, CFO, COO) 40% Vice President/Director/Manager 38% Internal Consultant 6% Internal Staff & Other 16% • 2011 Revenue (US$ Equivalent): Less than $50 Million 25% $51 - $999 Million 32% $1 - $5 Billion 24% Over $5 Billion 19% • Selling Format: Fast Moving Consumer Goods 23% Apparel & Footwear 35% Hard Goods 27% Restaurant and Leisure 7% • Headquarters/Retail Presence: United States 58% 65% Canada 7% 24% Latin America 2% 17% Europe 11% 27% United Kingdom 5% 24%
  • 8. 4 Asia Pacific 10% 29% Middle East / Africa 7% 25% • Year-Over-Year Comparable Store Sales Growth Rates (assume average growth of 5%): Worse than Average (Laggards) 19% Average 30% Better than (Retail Winners) 51%
  • 9. 5 Business Challenges Accelerating Change Throughout the global economy, the major payment types have been relatively unchanged for more than 30 years, with the last big innovation coming in the form of the direct debit in the late 1960’s. But what has changed is their distribution. Most notably, the number of payments now being made via debit has risen dramatically since the millennium, mostly at the expense of checks. And although the U.S. has generally lagged the rest of the world in switching from checks to debit, the trend is unmistakable (Figure 3). Figure 3: Changing U.S. Behaviors (blue line = checks) Source: First Federal Reserve Bank Of Boston, June 2012 When it comes to consumer payments, credit still dominates non-cash payments worldwide (Figure 4). Taken together, debit and credit make up roughly ½ of all U.S. consumer payments, although that number actually lags other parts of the world in terms of non-cash payments; for example, over 70% of consumer purchases in the UK in December 2012 were either debit or credit (according to UKCards Association, a UK based trade group).
  • 10. 6 Figure 4: Credit Dominates Source: PaymentsSource So, what’s the challenge? It has long been held by retailers that the moment of truth comes at that exact second in time when the customer hands the clerk money in exchange for merchandise. Prior to the advent of digital commerce, the exchange of money for goods and services has been assumed to happen in the store at checkout. From a store operations perspective, credit and debit cards are fundamentally no different than cash in terms of where and how the payment is presented – that is, at the checkout stand. That puts the quality of the payment experience in the hands of the retailer. It has been for this reason that retailers’ POS payment processing capabilities are usually the most reliable, albeit inflexible, systems in the application portfolio. But a new aspect of how retailers and consumers interact to pay for goods and services has created a challenge, particularly with the rise of smart mobile technologies. This change highlights the new shopping behaviors of consumers today. Consumers routinely use several channels (both digital and physical) to make a single purchase decision, for example by investigating and selecting a product with a mobile phone while making a purchase in a store. In fact, consumers don’t see “channels”. These new behaviors create the opportunity for consumers to use their smart phones as a kind of “digital wallet” to authorize an electronic payment – debit or credit - for goods and services, either while inside or away from the store, i.e. not necessarily at the checkout stand. A 2012 study commissioned by the U.S. Federal Reserve Board of Governors found that while only 0.2% of mobile phone users had started using their smartphones as a digital wallet, 36% of them had used the devices to make an online purchase. 2 If nothing else, this finding shows that consumers love their cellphones, and although it may be early days for digital wallets, companies 2 Consumers and Mobile Financial Services, March 2012, Board Of Governors Of The Federal Reserve System 2708 3086 3596 3916 3750 4233 4854 5330 828 1017 1204 1392 1520 1865 2164 2269 0 1000 2000 3000 4000 5000 6000 1/1/05 1/1/06 1/1/07 1/1/08 1/1/09 1/1/10 1/1/11 1/1/12 WorldwideTransactions ($ Billions) (Visa, Mastercard,American Express) Debit Credit
  • 11. 7 such as VISA, PayPal, and Google are advancing the notion. In the case of VISA, the company announced a 2015 timeline for rollout of EMV chip-embedded cards in the U.S. (EMV is already the standard in Europe and Canada), but the company also created incentives for retailers to accept digital payments via smartphones. What this means is that consumers – not retailers – will dictate how payments will be presented in the future, and that in turn could affect the quality of the “moment of truth”. Any Channel, Any Time, Anyhow Since RSR’s inception in 2007, we’ve observed the steady increase in the number of retailers operating several selling channels. In our latest survey, the growing influence of both mobile and social channels, in addition to the stores, eCommerce, and catalog operations, is plain to see (Figure 5). There is little difference between Retail Winners and others in all of these findings. The rise of Mobile Commerce is especially interesting; twice as many non-Winning retailers in 2013 indicate they are selling via mobile as in 2011. Clearly retailers of all stripes understand the need to be where the consumer is – in both the digital and physical realms. Figure 5: All Of The Above Source: RSR Research LLC, March 2013 Looking at the rise of mobile by vertical, only fast moving consumer goods (FMCG) companies such as grocery stores lag the overall response group in offering a mobile channel (11% vs. 32% overall). All the other identified verticals (Apparel, Hard Goods, Discount/Mass, and Hospitality & Leisure) report mobile penetration similar to the overall response. It is worth noting that RSR has observed some “fuzziness” between an “eCommerce channel” and a “mobile channel”. For example, in our December 2012 benchmark study entitled The Impact of Mobile in Retail, 85% of respondents indicated that they view mobile as an extension of the existing eCommerce offering, via an optimized-for-mobile view into the eCommerce site. And in RSR’s November 2012 benchmark entitled The Multi-Channel Retailer’s Reality in a Post-Amazon World, we learned that 37% of responding retailers have extended their eCommerce sites to mobile, and another 50% are in various stages of doing so. This explains variations that we sometimes see between various benchmark studies in answer to the question, “do you have a mobile selling channel?” In terms of the options made available (beyond cash and card-present transactions), retailers are creative, offering several alternatives for consumers (Figure 6). As with the number of selling 17% 29% 32% 70% 90% Social channels Catalog/call centers Mobile Commerce Ecommerce Brick and Mortar stores Which Selling Channels DoYou Operate?
  • 12. 8 channels being operated, there is not a significant difference between over, average, and under- performers as to the payment options available to consumers. Figure 6: Anyway You Want It Source: RSR Research LLC, March 2013 But although there isn’t much difference between performance groups regarding their payment experience, comparing the verticals reveals some interesting variances. Large retailers (with annual revenues greater than the equivalent of $1B) have been more aggressive about card-not- present payment handling and in accepting multiple currencies. FMCG retailers by far are the most experienced at handling government benefits transactions such as food stamps, and to a lesser degree, using loyalty points as cash equivalents. And more apparel retailers are likely to have experience offering branded gift cards. These differences of course are reflective of the types of brand experience they offer to consumers. The Challenge: Uncertainty & Loss Of Control Now is a time of unprecedented change in the way that consumers shop. That change is driven by the rapid rate of adoption of consumer mobile technologies. The MIT Technology Review recently reported that “it took landline telephones about 45 years to get from 5 percent to 50 percent penetration among U.S. households, and mobile phones took around seven years to reach a similar proportion of consumers. Smart phones have gone from 5 percent to 40 percent in 17% 50% 50% 50% 67% 50% 53% 35% 29% 65% 59% 59% 7% 57% 57% 50% 75% 75% 25% 61% 56% 58% 67% 86% 22% 48% 49% 53% 63% 73% Government benefit transactions Multiple currencies Retailer-branded credit cards Loyalty points / cash equivalent transactions Retailer-branded gift cards Online / card not present transactions Payment Experience Overall > $1B Apparel FMCG Disc/Mass
  • 13. 9 about four years, despite a recession.” 3 This in turn has triggered a true “reset moment” for retailers, as they ponder the wholesale changes to their operating models necessitated by consumers’ new shopping behaviors. Adding to all this churn is an influx of new players – Google, PayPal, mobile network operators, Square, ISIS, and the recently announced Merchant Customer Exchange (a consortium of large retailers led by Walmart). While its not likely that league leaders VISA and Mastercard are planning to quietly cede the space to new competitors, newly mobile- empowered consumers and new payment players are plainly giving retailers heartburn (Figure 7). Figure 7: Fear And Loathing On The Payments Trail Source: RSR Research, March 2013 Compounding that is the fact that consumers – not retailers – will dictate the payment form factors that retailers will have to accept. Retailers know they have to move fast, but how and when? Answers to those questions aren’t very clear. Looking inside the responses to the challenges mentioned yields some interesting differences of opinion. For example, Winners are far less concerned about escalating transaction costs than other retailers (36% vs. 50%), and (as shown in the chart) big retailers are far more concerned about security risks than mid-sized and smaller retailers – probably a reflection that the sheer 3 Mobile Computing in Question, MIT Technology Review, May 2012 15% 7% 33% 33% 44% 63% 63% 29% 14% 50% 21% 29% 64% 71% 3% 12% 42% 49% 49% 61% 76% International payment complexity as a barrier to business expansion across borders Uncertainty around new payment network operators and what it means for the future (for example, Dwolla, Bitcoin, Square, etc.) Uncertainty around which industry partners will ultimately drive payments (telecom carriers vs. card processor networks vs. phone manufacturers Increasing exposure to fraud and security risks Increasing transaction costs Consumer adoption of technology dictates which payment types we must support Uncertainty around the technical future of payments (standards, mobile, digital, etc.) Top 3 Business Challenges $1B+ $250M-$1B <$250M
  • 14. 10 volume of their transactions makes them a potential rich target for fraudsters. But “uncertainty about the technical future of payments” trumps all, even for Winners. Looking For A Path Forward It’s a truism in retail that “you never want to let anything get in the way of taking customers’ money when they offer it to you.” The basics haven’t changed as far as our survey respondents are concerned: payment processing is still “the moment of truth” and handling payments properly is as “critical to providing a satisfying customer experience” (Figure 8), as it has always been. Figure 8: Stuck? Source: RSR Research, March 2013 What is different is that retailers fully accept – or at least very few disagree – that a consolidated payment processing capability across all channels is critical, as opposed to the stove-piped payment processes and systems that are the legacy of old in-store POS and 1 st version eCommerce offerings. But a surprising number of retailers (38%) agree that they are stuck until some solution to rising processing fees is presented to them – and that number is consistent between Retail Winners and others. Only large retailers are less concerned about the issue (27%) – a reflection of their negotiating clout. This anxiety about processing fees represents as much of a challenge to the payment processors as retailers. There’s a tremendous amount of latent discontent in our retailers’ response, and that’s a to-do for companies such as VISA, Mastercard, and American Express. 15% 26% 27% 55% 69% 23% 35% 51% 39% 26% 45% 16% 18% 5% 5% 13% 18% 3% 1% 4% 5% 1% We can't move forward as a company until processing fees are reigned in. We don't care how our customers want to pay - we just want to be able to take their payment. A consolidated payment processing capability that crosses channels is critical to my customer experience. Payment processing is critical to providing a satisfying customer experience. Payment processing is a moment of truth - it must be fast and flawless. Payments & Customer Experience Alignment Strongly Agree Agree Neutral Disagree Strongly Disagree
  • 15. 11 Opportunities Staying Focused On The Customer Earlier in this report, we found broad agreement to the statement, “We don’t care how consumers want to pay us – we just want to be able to take their payment.” In fact, 61% of all our respondents agreed with the statement vs. only 22% who disagreed (Figure 8). That desire drives what retailers see as their biggest opportunity – to “make it easier for consumers to do business with us” (Figure 9). Figure 9: Making It Easy Source: RSR Research, March 2013 Retail Winners feel most strongly about this (76% compared to 61% overall), but there are only two exceptions in the respondent group that see things differently. Apparel retailers rated “gaining greater insight into customer shopping behavior” higher (73% vs. 50%), and discount/mass merchants rated “protect us from fraud and security risks” more highly (83% vs. 68%). These are fascinating choices, since they speak to the nature of those verticals. Apparel (and especially high-end apparel) retailers have a Brand focus that extends across all the channels – the “message” that many try to convey is not “commerce” but “lifestyle”. A big challenge for them is in 0% 50% 19% 19% 33% 19% 33% 47% 61% 8% 16% 19% 22% 27% 27% 43% 51% 76% Enable proprietary digital equivalents of cash (eg. “barter points”,“earned credits”, etc.) Shift customers to lower-cost payment methods Enable consumers who currently can't do business with us to be able to do business with us (e.g., unbanked consumers, layaway shoppers, etc.) Find new payment opportunities to support new business models (e.g., micro-payments, subscriptions, etc.) Demonstrate to our customers that we are an innovative retailer Ability to integrate payments and digital marketing Protect us from fraud and security risks Gain greater insight into customer shopping behavior Make it easier for consumers to do business with us Payments Opportunities Winners Others
  • 16. 12 understanding how effective lifestyle-oriented content and community in the digital domain are in driving commerce, i.e. the exchange of money for products and services. In the case of discount/mass merchants, the issue is very different. These are often the very large retailers whose margins are brutally thin. Their continuing focus on fraud prevention is all about margin protection, and given the volume of transactions that they are likely to produce it is an overarching concern, trumping even customer convenience. One other point about “opportunities”: average and under-performing retailers are much more concerned about “shift[ing] customers to lower cost payment methods” than Winners. This is the flip side of what we saw in the “challenges” section of this report: Winners are less concerned about costs, and more concerned about the customer. RSR has found throughout virtually all of its studies that a winning behavior is to focus first and foremost on the customer, and then to worry about “everything else”. Where’s The Innovation? Notwithstanding retailers’ desire to “just want to be able to take customer payment”, responses to our survey indicate that the focus is on ease-of-use and consistency across all the customer interfaces, and not particularly on innovative new alternatives to the tried-and-true methods of payment (cash, credit, and debit). Few Winners and no average and under-performing retailers indicated any interest in such things as digital “barter” (what little interest we were able to detect came from grocery operators). When it comes to payments innovation, retailers are more focused on two things: form factor, and in breaking the physical connection between payments and in- store POS. As we’ll see momentarily, that influences who retailers believe is providing thought leadership in the payments space. Follow The Leader(s) We saw earlier in this report that “uncertainty about the technical future of payments” is the top challenge for most retailers. And our respondents also emphasized that consumers – not the retail or payment card industries – will determine which of the next generation of payment methods will gain critical mass. So it follows that retailers might be watching consumer technology companies very closely to get as early an indication as possible as to which way consumers will go. And sure enough, when we asked which specific industry players are providing thought leadership to retailers, Winners indicated that it’s not the legacy payment networks that they look to first. Instead, it’s PayPal (Figure 10).
  • 17. 13 Figure 10: Tech Companies Show the Way Source: RSR Research, March 2013 PayPal, a division of the giant consumer-to-consumer e-auction company Ebay, has made inroads in payments without creating the need for retailers to invest in new store technologies to handle NFC (Near Field Communications)-enabled smart phones or EMV (Europay, MasterCard and Visa, also known as “chip and pin”)-embedded cards. In the recent past, retailers such as the Home Depot, Abercrombie & Fitch, Oasis, and many others have begun accepting payment transactions using PayPal. And in 2012, PayPal and fast food chain McDonalds launched an experimental mobile payments app in France. For other retailers, the ones to watch are primarily “the usual suspects” – service providers Visa, Mastercard, Maestro, American Express, and Discover. And while Winners are watching innovators like PayPal, they aren’t taking their eyes off of the big payment networks, since it is sure that they will play a big part in any solution that needs access to credit or debit issuing banks. Lagging behind those two is Google (43% of all our respondents indicated the search engine company as a thought leader for payments). Google developed and licenses the Android mobile operating system, and the latest generation of Android phones have NFC chips embedded in them (at the end of 2012, Android was estimated to have a 68% market share). While big players such as Walmart (a sponsor of the MCX retail payment consortium) are holding back on announcing any NFC plans, VISA’s 2011 announcement about the migration timeline for EMV and NFC in the U.S. makes that particular presentation technology a possibility. 9% 15% 18% 21% 24% 27% 27% 41% 44% 41% 3% 9% 9% 12% 15% 18% 29% 44% 56% 62% ChasePaymentech Other Trade associations (eg. NRF, IADS) ISIS MCX Retailer payment consortium (Walmart, etc.) Mobile Network Operators (eg. Orange, Verizon,AT&T) Amazon Google Payment networks (VISA, Mastercard/ Maestro,American Express, Discover) Paypal / eBay Industry Participants - Leaders Winners Others
  • 18. 14 Taken in sum, the picture looks like this: retailers are taking their leads from innovators PayPal and Google, whose success is driven not by service providers, but by consumers themselves. But the payment network operators, who have dictated the form factors for “card” based payments to consumers and retailers alike for many years, have announced yet more payment form factors (EMV, NFC) and the timelines for when retailers and consumers must be compliant with them. Owing to their pervasiveness in the marketplace, retailers ignore the payment networks at their peril. But that doesn’t mean they are happy about it. Figure 11 compares the overall respondent group’s perception of who is leading against who is obstructing progress. The verdict is inescapable: PayPal and Google are viewed not just as thought leaders, but also as enablers. The payment networks on the other hand are clearly viewed in a negative light by retailers. This is probably the result of years of mandated deadlines, costs, and penalties related to PCI (Payment Card Industry) data security standards. Figure 11: Lead, Follow, Or Get Out Of The Way Source: RSR Research, March 2013 What About “Everything Else”? Although “cost” isn’t Winners’ primary concern, that doesn’t mean they are ignoring it. In fact, when focusing on opportunities to optimize operations, a majority of Winners agree with their 13% 13% 16% 11% 19% 30% 13% 9% 63% 9% 6% 12% 13% 16% 19% 22% 28% 43% 50% 52% ChasePaymentech Other Trade associations (eg. NRF, IADS) ISIS MCX Retailer payment consortium (Walmart, etc.) Mobile Network Operators (eg. Orange, Verizon,AT&T) Amazon Google Payment networks (VISA, Mastercard/ Maestro,American Express, Discover) Paypal / eBay Industry Participants Leader Barrier
  • 19. 15 lesser-performing colleagues that reducing the cost of transactions is important (Figure 12). However, 31% more average and under-performing retailers rate that as the top internal opportunity vs. Winners. For over-performers, internal opportunities quickly fall off in importance. The message is clear: stay focused on what is right for the customer. Figure 12: the New Vies With The Old Source: RSR Research, March 2013 11% 6% 8% 25% 44% 19% 22% 28% 53% 67% 14% 14% 16% 24% 27% 30% 35% 35% 43% 51% Provide new customer services like layaway or rechargeable gift cards Improve cash flows Reduce our dependency on a small number of providers Expand our customer base Streamline payment, settlement, and conflict resolution processes Reduce cash handling Collect payments faster Simplify infrastructure that supports payment processing Improve transaction speed at the point of sale Reduce the cost of transactions Payments Operational Opportunities Winners Others
  • 20. 16 Organizational Inhibitors A Trifecta of Inhibitors Retailers expressed something of a consensus around top-three organizational inhibitors in this survey: too many players fighting for dominance, too much new technology coming too fast, and a strong perception that multiple payments strategies for every channel a retailer operates is not sufficient (Figure 13). Figure 13: Too Much Change, Change, Change Source: RSR Research, March 2013 With too many players fighting for dominance, even the largest retailers can feel lost at sea. Several attempts have been made in the past to bring a consortium together to address all players' concerns and needs, especially in regards to the future of payments, but it has only been in the last two years that retailers - who bear the brunt of whatever decisions are made - have played an active role. 4 Without a retail voice in the mix, retailers are seriously challenged to make an internal business case for change, which leads directly to the second organizational inhibitor on the list - that the technology changes too fast. When most retailers, especially when it comes to store technology, plan 5-10 year time horizons on hardware purchases (and then leave the depreciated technology in the field for another five years just for good measure), to face an effective life of a given payment innovation of 12-18 months, most large retailers can't implement a new technology into their stores in that kind of timeline, let alone implement it, get the value out of it, and then end-of- life it. 4 From Closing the Sale with the Connected Consumer: The Future of Payments, © 2009 RSR Research LLC: "There are all kinds of industry forums out there around payments, but retailers are conspicuously absent. For example, the NFC Forum's charter is to help guide standards for mobile phone-based contactless payments. Retailers should want to have some say in this, at a minimum to protect their interests in how it might be implemented in their stores. But there is nary a retailer in the NFC Forum member rolls." 18% 29% 34% 57% 62% 69% We have to fully amortize PCI investments before we can invest again in payments It is viewed as too risky to try to change or improve our current payment infrastructure The internal leadership team does not understand the value of payment options as part of the customer Different payment tools are required for the different channels The technology is changing too fast - we don't want to invest in something that is obsolete The industry is still fighting for dominant players - we're waiting for the dust to settle Top 3 Organizational Inhibitors
  • 21. 17 But the results reported overall hide some interesting variations among different types of respondents: • Winners drive the top three inhibitors on the list, more so than laggards: 71% of Winners vs. 68% of peers for unsettled industry dominance, 68% vs. 56% for the technology challenge, and 68% vs. 47% on the idea that different payment tools are required for different channels. • Laggards stand out in their fear that internal leadership does not understand the value of payments as part of the customer experience (41% vs. 28% of Winners). However, one of the most interesting differences emerged when looking at organizational inhibitors by revenue bands (Figure 14). Figure 14: One Size Does Not Fit All Source: RSR Research, March 2013 By revenue band, the top three remain consistent, but the order changes. The smallest retailers put more weight behind the challenge of different payment systems for different channels, mid- size retailers behind the challenge of keeping up with the evolving technology, and the largest retailers behind the frustration of a lack of dominant players. This is important for vendors to note - underneath a universal hesitation to invest in new payment solutions, the different revenue tiers have very distinct challenges that will each require a unique set of messages to address. Getting Down to the Nitty Gritty Diving beneath top-level organizational inhibitors into process challenges, we find that a strong majority of survey respondents report that their biggest operational inhibitor is integrating new digital payment capabilities into existing infrastructure (Figure 15). 73% 59% 50%54% 79% 69% 50% 56% 84% Different payment tools are required for the different channels The technology is changing too fast - we don't want to invest in something that is obsolete The industry is still fighting for dominant players - we're waiting for the dust to settle Top 3 Organizational Inhibitors by Revenue >$250M $250M-$1B $1B+
  • 22. 18 Figure 15: At Least Customers Won't Call Us if There is a Problem Source: RSR Research, March 2013 The view by segments reveals a lot of differences: • Winners are more likely to cite privacy issues (49% vs. peers' 39%) and the training required in stores to implement new payment methods (39% vs. peers' 28%) as operational challenges. • Laggards are more likely to be flummoxed by technology barriers - integration challenges of new payment forms (75% vs. Winners' 69%), along with the current mess of payment infrastructures internally (44% vs. Winners' 39%). As a result, they are also more likely to be worried about the speed of change - 53% reported rapidly changing payment form factors as an operational challenge, vs. only 41% of Winners. • Hardly any responses garnered more than 50% from the smallest retailers (under $250M), but mid-sized retailers ($250M-$1B) report themselves in a bind, with 86% citing integration challenges as a top-3 operational issue, vs. 72% overall. These retailers are also much more likely to report challenges in getting an executive owner of payments (43% vs. 33% overall) - for mid-size retailers, payments seems to fall into an organizational gap somewhere between the small retail CEO who does everything, and the largest organizations who have explicit Treasury functions alongside a volume of payments that makes them a richer fraud target. • The largest retailers - $1B+ in revenue - fear rapidly changing payment form factors the least (36% vs. 47% overall), even though they are just as likely to report integration challenges as the overall respondent pool. 3% 33% 33% 41% 44% 47% 72% Customer Call Center can become inundated with calls about new payment types Store-level employees require training to be able to handle new payment types and form factors No clear executive owner: store ops, finance, IT, and/or eCommerce all own a piece of the puzzle Our current payment infrastructure is costly to maintain and hard to change Privacy issues have made us cautious about adopting new payment types or form factors Payment form factors are changing too rapidly for us to be able to respond Integration challenges between new digital payment capabilities and old processes/systems such as instore POS Payments Operational Challenges
  • 23. 19 • By vertical, FMCG retailers occupy a class of their own. They are most concerned about privacy issues - 61% rated it a top-3 issue, putting it at the top of the list. And only 28% report that their current payments infrastructure is costly and inflexible, vs. 41% overall. Gaining Stability So what will it take to get retailers to move internally on new payment opportunities? Top of their list is a comprehensive cross-channel payment capability, followed closely on its heels by solutions that reduce PCI requirements (Figure 16). Figure 16: Make Me Move Source: RSR Research, March 2013 By performance: • Winners are slightly more likely to value the ability to consolidate payments across channels (65% vs. 56% of peers). They are also more likely to favor more aggressive retailer participation in setting payment standards (41% vs. 32% of peers) and the idea of payment hardware offered as a service as a way to gain some investment protection against rapidly evolving standards (32% vs. 21%). • Laggards are more concerned about protecting against future PCI requirements - 62% cite that as an opportunity vs. 47% of Winners, edging out comprehensive payment technologies that cross channels as their top opportunity to overcome their inhibitors. Gathering the Troops Survey respondents reveal some large gaps between organizations currently involved in payments decisions, and those that need more education about the topic (Figure 17). 12% 22% 27% 27% 37% 46% 54% 60% More internal interest in participating in industry standard-setting groups More industry guidance and education on payment best practices Payment hardware as a service - to protect against changing future requirements More education internally about payment opportunities as part of the customer experience A more aggressive retailer-led industry association to drive future payment developments A more collaborative payment association that includes all players - from processors to retailers Solutions that reduce our PCI requirements without reducing our services to consumers More comprehensive payment technologies that enable us to consolidate payments across Overcoming Inhibitors -Top 3 Options
  • 24. 20 Figure 17: Getting Store Ops On Board Source: RSR Research, March 2013 It would be surprising that Legal and Treasury are not as involved, except that primarily $1B+ retailers report Legal and Treasury involvement, which suggests that smaller retailers haven't evolved to the point of building internal organizations to support these capabilities. It is surprising the degree to which respondents feel that the eCommerce team is aligned, but that perhaps is indicative of how thorny a problem it is to stay on top the ever-evolving fraud risks of Card Not Present transactions that are the lifeblood of online commerce. Motivating the Troops Winners involve more participants in payment decisions across the board, outnumbering laggards in involving Customer Experience organizations, Treasury, and Marketing by 2 to 1 (Figure 18). Figure 18: Winners Have More Troops Source: RSR Research, March 2013 31% 25% 13% 25% 23% 18% 56% 38% 39% 61% 19% 20% 26% 26% 29% 41% 41% 63% 66% 69% Marketing Loss Prevention Treasury office Customer Experience Legal eCommerce/Direct Operations Store Operations Information Technology (IT) CFO Executive Team Organizations Involved in Payments Decisions Current Requires Education 20% 11% 17% 17% 20% 34% 31% 60% 63% 66% 20% 26% 34% 34% 37% 49% 51% 66% 69% 71% Loss Prevention Marketing Treasury office Customer Experience Legal eCommerce/Direct Operations Store Operations Information Technology (IT) CFO Executive Team Current Participants in Payments Decisions Winners Others
  • 25. 21 However, in larger retail enterprises, the IT organization seems to be the de facto owner of payments, with 84% of $1B+ respondents reporting that IT is involved in payments decisions, vs. 56% who report the involvement of the executive team. In the largest organizations, it appears that, even though they are the main believers of a dedicated "Customer Experience" organization, payments does not appear to be a strategic consideration in that experience. Educating The Troops Winners are feeling pretty good about the education level of their internal constituents, with none of them achieving greater than 50% of Winning respondents among those organizations that require more education about payments. However, along with their greater concerns about privacy issues arising with evolving forms of consumer payments, Winners were also twice as likely as peers to report that the Legal department needs more education. Figure 19: Teach Them and They Will Come? Source: RSR Research, March 2013 Laggards diverge from Winners around future education in three key areas: Store Operations, the executive team, and the CFO (eCommerce didn't make the cutoff for this chart - retailers tend to feel that their eCommerce teams have a very solid handle on payments issues and opportunities). Store Operations seems to be the largest sticking point, even topping the list for Winners as an organization requiring more education about payments. And between the CFO and the executive team, it would appear that laggards struggle to move payments beyond a "don't slow down the transaction at the till" perspective. Mid-sized retailers report the most challenges in educating their various internal constituents about payments - 77% said the executive team needs more education, along with 69% for store operations and 54% for the CFO, largely outpacing their peers in all three areas of the business. 27% 21% 46% 15% 30% 36% 56% 64% 21% 29% 32% 32% 32% 39% 43% 46% Customer Experience Loss Prevention CFO Legal Marketing Information Technology (IT) Executive Team Store Operations Organizations Requiring More Education about Payments Winners Others
  • 26. 22 Small, Medium, Large Of all the different ways to examine the organizational inhibitors around payments, the most distressed group tended to be mid-sized retailers, those sized between $250M-$1B. These retailers find themselves in a bind when it comes to payments. On one side, they are too small to cheaply outsource. For their smaller brethren, there is no cost advantage to running payment switches themselves, both because they don't have the scale to negotiate preferential transaction fees, and because of the additional burdensome costs related to establishing and maintaining PCI compliance. On the other side of the spectrum, the largest retailers do have the scale to make taking greater control of payments an affordable option for them, even with PCI requirements. These retailers with more than $1 billion in revenue also tend to have the technology capabilities to help them keep up with the continued evolution in the payment industry. They may not be happy about the costs, and they may not be able to move any faster than any of their peers, but they can keep up. Mid-sized retailers are stuck in the middle. They're too big to throw themselves on the mercy of a merchant service provider, and they are too small to easily take on all of the costs and organizations required to play the payments game at the level of their larger competitors. As RSR has found in other areas of retail in 2012-13, this mid-sized revenue band within retail seems woefully underserved - and a bright spot of opportunity for the solution providers who can package a solution that lets a smaller retailer play like a big one.
  • 27. 23 Technology Enablers All Hail Mobile! When it comes to the potential value that various technology solutions could provide, mobile payments' perceived value is astonishing, especially since digital wallets garner much less enthusiasm (Figure 20). Most fascinating was the sound rejection of check processing, once an easy sell. And while retailers have often made much about reducing their payment transaction costs, alternative payments and alternative payment networks do not appear to present themselves as any kind of truly convincing alternative. Figure 20: Customer and Cost Drive Value Source: RSR Research, March 2013 Most surprising: how low digital receipts come in on the list. Anecdotal evidence about the benefits suggest that it’s a no-brainer, but in the survey retailers express a lot more ambivalence about the capability. Perhaps the immediate lift in gathering email addresses has not translated into increased engagement or sales. However, given retailers' tendencies to rely on email to a large extent with customers, perhaps the issue lies with near-spamming levels of email communication and not with the digital receipt itself. Winners and laggards alike assign value fairly consistently, with a few key exceptions: 12% 15% 21% 27% 28% 43% 45% 48% 49% 53% 59% 59% 64% 67% 70% 72% 59% 35% 53% 45% 49% 38% 52% 45% 43% 41% 34% 35% 30% 29% 29% 25% 29% 50% 26% 27% 24% 19% 3% 7% 7% 6% 7% 6% 6% 4% 1% 3% White label cards Check processing Alternative payment networks (Dwolla, Alternative payments (revolving or micro- Multi-currency Coupon processing Digital receipts Digital Wallet Refunds Stored value cards Payment switch that crosses channels Analytics Fraud detection Loyalty Rewards Mobile payments Debit/Credit processing Technology Options - POTENTIALValue VeryValuable Somewhat valuable Little or no value
  • 28. 24 • Winners place more value on loyalty rewards (71% vs. peers' 62%), a payment switch that crosses channels (66% vs. 51%), multi-currency capabilities (38% vs. 18%), and, oddly enough, alternative payment formats (35% to 19%). • Laggards place more value on more options overall - mobile payments (74% vs. Winners' 66%), fraud detection (71% to 57%), refunds (56% to 43%), digital wallet (56% to 39%), and digital receipts (53% to 36%). Wait and See When it comes to adoption plans, retailers' enthusiasm ends abruptly. Absolutely no payment technology's value translates into budgeted plans for the future (Figure 21). Figure 21: Waiting for Certainty Source: RSR Research, March 2013 This is a direct result of much of the uncertainty that retailers feel about the future direction that payments will take. Even mobile - the current darling of payments - has at best a moderate group of retailers willing to invest. And the technologies implemented reflect more about retailers' legacy investments than any future intent. Check processing in particular stands out as a legacy implementation whose value has apparently come and gone. 11% 6% 9% 11% 10% 12% 14% 14% 11% 8% 12% 9% 14% 14% 17% 13% 9% 43% 3% 5% 19% 32% 8% 3% 45% 36% 11% 26% 27% 32% 13% 61% 12% 15% 21% 27% 28% 43% 45% 48% 49% 53% 59% 59% 64% 67% 70% 72% White label cards Check processing Alternative payment networks (Dwolla, Alternative payments (revolving or Multi-currency Coupon processing Digital receipts Digital Wallet Refunds Stored value cards Payment switch that crosses channels Analytics Fraud detection Loyalty Rewards Mobile payments Debit/Credit processing PaymentTechnologies:Value vs. Use VeryValuable 1Year or Longer Budgeted
  • 29. 25 What If . . . What if the uncertainty constraint was removed? Retailers' "Planned/Not Budgeted" choices reveal which way they think the industry might be headed, and here their enthusiasm for mobile is made clear (Figure 22). Figure 22: Unconstrained Thinking Source: RSR Research, March 2013 Along with mobile, digital receipts, digital wallets, and a payment switch that can cross channels top retailers' wish lists. As well, more enthusiasm is shown for alternative payments and alternative payment networks. Solving the Catch-22 All of this latent enthusiasm demonstrates that any vendor - or coalition of solution providers - that can demonstrate stability and most especially consumer acceptance has an opportunity to capture a large share of retailers' interest. Of course, in payments this represents a high barrier due to the catch-22 challenge of persuading retailers to invest in a payment solution that no 6% 8% 9% 9% 10% 11% 11% 11% 12% 12% 13% 14% 14% 14% 14% 17% 8% 8% 15% 17% 13% 17% 9% 8% 3% 18% 2% 12% 22% 31% 16% 30% Check processing Stored value cards Analytics Alternative payment networks (Dwolla, Multi-currency Alternative payments (revolving or micro- White label cards Refunds Coupon processing Payment switch that crosses channels Debit/Credit processing Loyalty Rewards Digital Wallet Digital receipts Fraud detection Mobile payments PaymentTechnology Planned Adoption Budgeted Planned/Not Budgeted
  • 30. 26 consumers use - alongside convincing consumers that they should take on a payment solution that no retailer accepts. The only "new" payment solution that is currently in a position to solve this challenge is PayPal, which began life as a peer-to-peer payment method, grew to support online payments (notably by making it easy for consumers to pay without having to have their credit card right in front of them on the consumer side, and offering near-relentless promotion support to retailers who advertised that they accepted PayPal on the merchant side). The company is now poised to bring that payment ease to stores, closing the gap between channels. Can other solution providers follow in these footsteps? The only real alternative is the Android approach, where pieces of the capability lie dormant in consumers' hands, waiting for the rest of the pieces to fall in place to become "instantly" relevant.
  • 31. 27 BOOTstrap Recommendations Form Factor Follows Function The results of our study on the future of Payments in retail reveal that “uncertainty about the technical future of payments” is the top challenge for most retailers. Compounding that is the fact retailers believe that consumers will dictate the payment form factors that retailers will have to accept. This uncertainty trumps all other challenges, even for Winners. But the study also shows that while the form factor of the payment presentation may be unknown, the form of the payment itself is not – the most favored (and expected) payment types for the foreseeable future are credit and debit. Additionally, it's arguable that the form factor isn’t that great a mystery either; it may come in the form of a card presented at the time of purchase in a store or an equivalent digital “message” coming from a mobile device, a “card-not-present” transaction in a digital channel, or a digital message originating from a payment service (such as PayPal). Payment processing is still “the moment of truth” and handling payments properly is critical to providing a satisfying customer experience. But that moment of truth could occur away from the checkout stand in the store; it could occur while the customer is selecting products to purchase, either in the aisle or far away from the store (even if the store is the ultimate point of fulfillment). So the known task before retailers now is to implement a consolidated payment processing capability across all selling channels, and to be able to associate payment authorization with a transaction anywhere that transaction is finally “rung up”, no matter where it was initiated. Watch Consumer Technology Innovators – But Don’t Ignore The Incumbents Retailers should be watching consumer technology companies very closely to get as early an indication as possible as to which way consumers will go. This study shows that retailers are taking their leads from innovators PayPal and Google. But those aren’t the only technology companies whose success is driven by consumers. Mobile network providers have been engaged in activities across the globe to make it possible for consumers to present payment authorizations wirelessly, using the smart phone. Recent entrants (such as Square) offer consumers and retailers with both a technology and a service to accept digital payments from mobile devices. All of these innovations are potentially important and well worth watching – and experimenting with. But retailers should also pay close attention to what the established payment network providers are doing. VISA is not only pushing ahead with next generation EMV “chip & pin” cards, but is also partnering with companies such as Vodafone to enable digital payments via mobile devices. Be Proactive About Security And Privacy Retailers, particularly discount/mass merchants, rated “protect us from fraud and security risks” as a top opportunity. Retail Winners are more proactive; they are more likely to favor more aggressive participation in setting payment standards than their lesser-performing competition. After years of being buffeted by PCI mandates from the payment industry, top retailers want to be in front of emerging privacy and security standards related to mobile payments. It’s a smart strategy that all retailers should follow, especially considering mobile payments’ perceived
  • 32. 28 value. But that means also talking to organizations “outside” of retail, for example by engaging with mobile network operators. Get The Right People Involved Results from our survey indicate that in the largest organizations, payment handling is frequently not a strategic consideration in defining the "Customer Experience” (the IT organization tends to be the defacto owner of payment systems). It’s an odd omission. Winners involve more participants in payment decisions, including Customer Experience organizations, Treasury, and Marketing. But some should-be participants need to know more about the possibilities. Even for Winners, Store Operations’ “if it ain’t broke, don’t fix it” attitude can be a stumbling block, and for mid-sized retailers, the executive team in general needs to be better informed. Since payment handling still is an important “moment of truth” for retailers, waiting for consumers to decide for the industry which technologies will be prevalent is far too passive a position. Next generation payment processing needs to be moved near the top of the corporate “to-do” list.
  • 33. 29 Appendix A: RSR’s Research Methodology The “BOOT” methodology is designed to reveal and prioritize the following: • Business Challenges – Retailers of all shapes and sizes face significant external challenges. These issues provide a business context for the subject being discussed and drive decision-making across the enterprise. • Opportunities – Every challenge brings with it a set of opportunities, or ways to change and overcome that challenge. The ways retailers turn business challenges into opportunities often define the difference between Winners and “also-rans.” Within the BOOT, we can also identify opportunities missed – and describe leading edge models we believe drive success. • Organizational Inhibitors – Even as enterprises find opportunities to overcome their external challenges, they may find internal organizational inhibitors that keep them from executing on their vision. Opportunities can be found to overcome these inhibitors as well. Winning Retailers understand their organizational inhibitors and find creative, effective ways to overcome them. • Technology Enablers – If a company can overcome its organizational inhibitors it can use technology as an enabler to take advantage of the opportunities it identifies. Retail Winners are most adept at judiciously and effectively using these enablers, often far earlier than their peers. A graphical depiction of the BOOT follows:
  • 34. 30 Appendix B: About Our Partner Retail Business Technology Expo (RBTE) is Europe’s biggest and fastest growing retail expo. It is the must-visit event for retail and hospitality organisations in the UK and mainland Europe looking for the right tools, solutions and advice on how to best run their business. It is a one stop shop, showcasing end to end solutions, from purchasing and supply chain through in-store, payments and merchandising to customer engagement. See the whole picture at RBTE – the UK and Europe’s leading solutions event. RBTE combines an exhibition offering a comprehensive range of solutions with a free informative and interactive education programme incorporating hundreds of seminars and numerous inspirational features, plus a host of networking opportunities and hospitality – all under one roof. It provides a platform for most of the leading global solution providers and an extensive array of innovative suppliers from this sector to showcase their products and solutions. It is an invaluable destination for retailers who want to keep up to date with all the latest solutions available to help them grow their business, boost productivity, improve competitiveness and enhance the customer experience, as well as take advantage of the strategic and tactical advice that will be available to help them. Covering all the key tactical and strategic issues relevant to retailers today, from international expansion to mobile, RBTE is relevant to the IT, operations, multichannel, marketing, supply chain, eCommerce, logistics, loss prevention, payments and finance department heads – the whole team in fact! FOR FURTHER INFORMATION: www.rbtexpo.com
  • 35. 31 Appendix C: About RSR Research Retail Systems Research (“RSR”) is the only research company run by retailers for the retail industry. RSR provides insight into business and technology challenges facing the extended retail industry, providing thought leadership and advice on navigating these challenges for specific companies and the industry at large. We do this by: • Identifying information that helps retailers and their trading partners to build more efficient and profitable businesses; • Identifying industry issues that solutions providers must address to be relevant in the extended retail industry; • Providing insight and analysis about a broad spectrum of issues and trends in the Extended Retail Industry. Copyright© 2013 by Retail Systems Research LLC • All rights reserved. No part of the contents of this document may be reproduced or transmitted in any form or by any means without the permission of the publisher. Contact research@rsrresearch.com for more information.