It’s no secret that merchants in all sectors face significant challenges when it comes to payments — both in addressing customers’ ever-changing payment preferences and in keeping track of the steady emergence of new payment technologies. While seeking technology solutions plays a clear role for merchants as they try to remain relevant, creating an enterprise-wide dedication to innovation is just as important.
To better understand how merchants are approaching innovation, Ovum and ACI have created a Culture of Innovation Index based on a global survey of merchants and other payment players.
This index provides a global view of today’s merchant landscape, benchmarked across five categories:
- Trailblazers – Top 10% of merchants in terms of enterprise-wide innovation
- Advanced – Performing strongly in the market, but potentially falling behind more innovative competitors
- Tech-led – IT-driven, but lacking in cross-company collaboration
- Emerging – Strong foundation in terms of organizational culture, but yet to deliver meaningful outputs
- Laggards – Behind competitors in both technology and culture
While there is no single formula for driving innovation, the survey does indicate a series of seven best practices that all merchant Trailblazers have in common.
- A strong central function tasked with driving innovation
Trailblazer merchants are increasingly empowering central innovation and/or digital teams with the resourcing and responsibility to drive innovation. This comes with key support from senior leadership and is considered the most important source of innovation for 64% of Trailblazer merchants, according to the Ovum survey.
- An agile culture that is responsive to customer needs
A key differentiator for merchants is the ability to respond quickly to changing customer needs. Merchants excelling here complement technology with an organizational structure that is open and collaborative to create a culture that can deliver solutions faster than competitors.
- A company-wide engagement with emerging technologies
Innovative merchants are proactive when it comes to investing resources in exploring and experimenting with new technologies. This aids in the development of new products, but can also identify opportunities to enhance existing products and services.
- A high-priority focus on bringing innovative products and services to market
According to the survey, 94% of Trailblazer merchants report that delivering new products and services is a core business objective. This focus takes many forms, including external messaging, investments in development and internal promotion.
- Employees that are trained to support new product and service development
A key element of delivering enterprise-wide innovation is to ensure all employees are trained and involved in the process of identifying product and service gaps. Highly innovative merchants educate their employees to support this endeavor and empower them to become actively engaged in the developmental process.
- An IT function capable of delivering innovation
Trailblazer merchants are built to take advantage of powerful new technologies. In particular, the most innovative merchants all have a clearly defined cloud strategy, with 94% of survey respondents saying they plan to move mission-critical workloads to the public cloud by 2020.
- An investment in the customer experience
Unsurprisingly, Trailblazer merchants outpace peers when it comes to investing in payments technology aimed at improving the customer experience. By building a better customer experience, merchants create a competitive edge that allows them to attract new customers while ensuring loyalty from existing customers.
Given the increasingly competitive landscape of today’s retail ecosystem, merchants cannot risk falling behind. Now more than ever, merchants need to innovate to address the constantly changing channels and buying desires of their customers. By adopting the seven characteristics exemplified by today’s Trailblazer merchants, you will be well on your way to creating an organization built to get ahead and stay there.
Want to learn more about the Culture of Innovation Index? Click here to download the full report.