apidays New York 2023 APIs for Embedded Business Models: Finance, Healthcare, Retail, and Media May 16 & 17, 2023 Bridging the Physical and Digital: Innovating in the Retail Industry Jaideep Singh, Director, Product Management, Mastercard ------ Check out our conferences at https://www.apidays.global/ Do you want to sponsor or talk at one of our conferences? https://apidays.typeform.com/to/ILJeAaV8 Learn more on APIscene, the global media made by the community for the community: https://www.apiscene.io Explore the API ecosystem with the API Landscape: https://apilandscape.apiscene.io/

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APIDAYS Forum | May 2023 | New York, NY
Jaideep Singh
Director, Product Management
Bridging the Physical and Digital:
Innovating in the Retail Industry

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2 JANUARY 11, 2023
Introduction

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3 JANUARY 11, 2023
What does the future of
in-store retail look like?

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Key in-store trends shaping the future of retail stores, putting customer
experience and efficiency centrally
Customer experience trends Enabling innovations
Video analytics
E.g., biometrics
Shelf innovation
E.g., AI in shelf
In-store AI
E.g., Amazon GO
Mobile Apps
E.g., Target App
Changing store formats and store network
Retail stores are here to stay, but no one-size-fits all approach, role of store is
increasingly driven by customer's shopping mission
Transactional stores
• Shop & Go E.g., AH ToGo
• One-stop-shop E.g.,
Decathlon
Experiential
• Showroom E.g., Dyson
• Elevated service E.g., Nordstrom Local
• Brand Immersion E.g., Apple store
• Curated assortment E.g., Ikea urban store
1
Technological and digital innovations in-store
Tech innovations across customer journey (discover, in-store & after purchase)
enable customer experience trends
5
Evolution of supply chain
Innovations in supply chain allow to increase speed, availability and
transparency, driving convenience for consumers
Smart inventory mgmt.
E.g., Amazon
Ultra-fast delivery
E.g., Alibaba Hema
Pick-up options
E.g., PUDO4
7
Hyper-personalized and localized propositions
As data analyticsevolved, retailersidentified the value of data (loyalty,
demographic & transaction data)
Personalized offers
(pricing & promo)
E.g., Nike+ app
Aisle navigation
E.g., MapsIndoors
Assortment
customization
3
Partnerships, alliances and ecosystems
Formation of alliances & ecosystemsadd speed capabilities, enabling to
compete on core strengths
Tech-led
E.g., Google
Carrier-led
E.g., FedEx
Retailer-led
E.g., Ocado
6
Omnichannel integration and frictionless retail
Integration of omnichannel experiencein-store and removing any friction
allows to take the next step in customer experience
All-in-one App
E.g.,Starbucks loyalty,
order &payapp
Frictionless
checkout
E.g., Amazon GO
Self-service
E.g., self check-in at
hotel
BOPIS1/ROPIS2/
BORIS3
E.g.,GAP
2
Overall efficiency important across the board
With limitedemployee availability retailers need to think how to best
deploy employees in-store several solutions, like HR planning, automated
inventory mgmt., ...
1. Buy Online & Pick up In Store 2. Reserve Online & Pickup In Store 3. Buy Online Return In Store 4. Pick Up Drop Off points
Additional services (incl. BNPL)
Retailers continue to move into offering add-on services to customers,
diversifying their portfolio
Rental of goods
E.g., IKEA pilot
Financ. services
E.g., Carrefour
Finance
Adjacent services
E.g., BestBuy
4
Buyer credit
E.g., Klarna BNPL

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While e-commerce is growing, in-store retail remains the dominant retail sales
channel, even after pandemic
World spending excl. fuel ($T)
While E/m-commerce is growing in share, in-store
purchases1 remain relevant, growing at 1%
Goods E-commerce penetration differs by vertical, with
grocery & personal care being a POS stronghold
1. Only goods are included, excl. hospitality & services; 2. Market weight 2021, other goods at 35% market share incl. but not limited to tobacco, pet supplies, print media, arts & more
Note: E-commerce includes mobile commerce Source: Euro monitor (LHS), Forrester data (RHS)
Share online of goods retail (%)
Goods only
3% 9%
5% 7%
5% 6%
25%
21% 32%
27% 28% 30%
76%
68% 83%
79% 81% 85%
70% 73%
66%
49% 61% 77%
26%
15% 20%
18% 21% 23%
76%
71%
59% 68%
65% 73%
37%
28% 41%
36% 39% 44%
Grocery
Personal care
Homeware &
furniture
Apparel, footw.
& access.
Consumer
electronics
Media
Computer HW &
access.
2020
2019 2023
2021 2022 2024
Market weight2
35%
5%
5%
10%
5%
<5%
<5%
28% 35% 38%
36% 40% 43%
Appliances <5%
POS strongholds Middle mixers Online front runners
+2%
+1%
+12%
CAGR
Ecom
In store
Services
12.2
(61%)
20.1
2020
23.1
20.5
5.5
(27%)
2.5
(12%)
12.2
(56%)
2019 2022
2.8
(16%)
3.4
(19%)
11.3
(64%)
3.2
(17%)
11.5
(61%)
4.2
(22%)
2021
3.5
(17%)
11.9
(58%)
21.8
18.9
5.1
(25%)
3.9
(18%)
5.7
(26%)
2023
4.4
(19%)
12.6
(54%)
6.2
(27%)
2024
17.5

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In-Store, Traditional POS
~77% of all Transactions (2026)*
E-Commerce, Remote
~20% of all Transactions (2026)*
In-Store, Remote
~3% of all Transactions (2026)*
*Estimate – BCG Study – Mastercard: Jan 2022

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Key pain points facing retail customers
23%
18%
40%
16%
38%
25%
20%
18%
in-store Digital
40% of consumers would like to
have a hassle-free checkout
(% of respondents 3)
Sales and secure
payment
Hassle-free
checkout (e.g.,
scanning items vs.
RFID)
Helpful
employees
Ease of
Navigation
55%
40%
33%
33%
Note 1: Adults WW Age 18+, Capgemini 2019; 2: US adults Age 18+, NRF Oct 2019, 3: US citizens Age 15+, RIS News 2019
Source: eMarketer, Press search, BCG analysis
Long queues at checkout as main
issue of in-store shopping
(% of respondents 1)
Long queues at
checkouts
Out of stock products when
visit store
Difficulties in locating
products in the store
No store associate for help
Lack of product information
60
%
48
%
40
%
26
%
24
%
Checkout considered main pain point
for in-store purchases
(% of respondents 2)
Discovery
Decision before
purchase
At Checkout
Post Purchase

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Mastercard Next-Gen
Point-of-Interaction
Software
PAYMENT NETWORK
Point-of-Interaction
PAYMENT
TERMINAL
Merchant backend
1
2 3
4
5
6
7
8
Tokenization
9
10
11
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What will our API do?
New Digital Commerce Indicator
• Entity Type
• Entity Name
• Check-in Method
• Unique AlphaNumeric Code

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Enrollment

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How It Works

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Check-in

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How It Works

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Why It Matters

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What’s Next?
Your favorite iced
coffee on us during
your next visit

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Thank You!
Jaideep Singh
Director, Product Management
Mastercard
Jaideep.Singh@mastercard.com
linkedin.com/in/singhjaideep1/