GUEST COMMENT Why the payment experience is paramount in 2016
2016 is in full flow and with it the New Year’s resolution period is already well and truly behind us. Many of us may have already stopped going to the gym, or maybe had a burger for lunch instead of the salad we promised ourselves would make up our new diet. However, one resolution that many retailers will need to stick to – especially after learning from the lessons of Christmas and New Year – is to meet the needs of their demanding customers, and to do so across multiple channels, while ensuring that this is done in a secure and compliant manner. But how can retailers do this?
The rise of the omnichannel experience
Consumers are becoming increasingly aware of the vulnerabilities retailers face when it comes to safeguarding their sensitive information, especially in the wake of recent security breaches. It is essential that retailers can assure customers their personal data is appropriately secured while creating a consistent and seamless customer payment experience across offline and online channels. This is a vital aspect of the omnichannel model.
Omnichannel shopping has moved from a novel concept to an expectation for consumers. Nowadays, consumers have more than one device on the go, and love the ability to put one down and pick another one up. They can for example browse and add items on their mobile while on the bus home before completing the purchase on a tablet when they get home. The consumer expects consistency across all channels; this means consistency in experience, messaging, product availability and payment.
Omnichannel is not just proving popular with consumers but translating into real growth for retailers. In November, Walmart announced that customers shopping across multiple channels spend on average $2,500 a year compared to $200 for online only, and $1,400 for in-store only. Meanwhile in the UK, Sainsbury’s has seen the popularity of its ‘Click & Collect’ service grow by 7% over the last year. There is a clear trend towards shoppers embracing omni-channel and retailers will need to continue to evolve their strategy to meet this demand.
The retailers who will succeed will be those who successfully navigate the challenges of an omni-channel world, through offering the same user experience across different channels, while assuring customers their data is secure.
The ability to win in this landscape will require retailers to navigate specific challenges. One of the first barriers will be to be able give customers a true omni-channel experience, not simply allowing them to interact across multiple channels. The benefit of this approach is that it offers consistency of experience, strengthening your brand values whatever the channel. The second challenge will be to successfully manage and mitigate the increased security complexity that comes from having more channels.
Security is key
Every retailer must keep their data and payments infrastructure secure. By complying with the Payment Card Industry (PCI) rules around customer payment data, they are showing their intent to keep customer data safe. Yet even those with the best intentions can be victims of security breaches which can incur regulatory fines, and even worse dent customer confidence.
For merchants of all types looking to implement an omni-channel, customer data is perhaps their most valuable asset. As with anything that is highly sought after, it needs to be secured. According to research from Censuswide focusing on retailers in 2015, 22% of UK retailers have faced attempts to be hacked. A worrying statistic when personal and payment data is often the end goal of a cyber-attack.
The good news for retailers is that tokenisation is out there to help meet the challenges of an omni-channel environment. It is a payment security technology that encrypts consumer data at the point of sale. It assigns an alphanumeric code, or ‘token’ to payment data when the transaction is being processed. This token has no obvious or exploitable meaning for a cyber-attacker, rendering the customer’s sensitive card details as indecipherable. This helps retailers mitigate risk, as in the event of a breach, the sensitive data elements are replaced with a non-sensitive equivalent to help keep customer details safe.
As well as the obvious security benefits, tokenisation also provides an insight into consumer behaviour and spending patterns. Retailers cannot identify an individual token, but they can attribute the same token to a card that a customer uses across different channels, thus providing an accurate view of how the customer is using different channels for their shopping. This data has the potential to give merchants insight to better identify their customers’ individual shopping experiences, resulting in new combined-channel customer journeys and repeat sales.
Consumers want convenience, consistency and security when they shop. Shopping isn’t just a transactional process, it’s about the experience. The challenge for retailers is delivering that experience across every platform securely.
Tokenisation offers this to retailers but also the opportunity for them to build a profile of each and every shopper helping build up an accurate portfolio of their customers, and help aid in their pursuit of bettering customer experience.
Marc Pettican is managing director of The Logic Group