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MAG Sponsor Spotlight: Haven't upgraded to EMV yet? Think Omnichannel (MAG Quarterly- Volume Four, Issue Two)

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By Tommy Bush, SVP Business Development, Adyen

June 2, 2016

Now is a great time to think omnichannel, especially if you’re already upgrading your payments infrastructure to support EMV.  With an omnichannel payments infrastructure, you can support use cases such as endless aisles, click and collect, omnichannel returns, or omnichannel zero/one click purchases, and be ready for commerce of the future.

It’s been over six months since the deadline for merchants to transition to EMV has passed. Yet only 22% of retailers are EMV ready. While there are many reasons why retailers haven’t made the switch, there’s some good news for those who haven’t yet.  It turns out this requirement and its timing is a blessing in disguise. Why? Because if you’re already thinking about changing your payments infrastructure to support EMV, you can now think broader.  Think omnichannel.  

Why omnichannel?

Omnichannel is all the rage in retail these days. Consumers now expect the integrated shopping experience that applies the benefits of ecommerce to all commerce, no matter where they are. “Research online, buy in stores” of 10 years ago has become “buy online, pickup in store.” Modern consumers expect to be able to return their items in-store when they’ve bought online, and they want to count on having enhanced experiences that recognize their loyalty and rewards them for it.

Omnichannel experiences

Leading retailers are leveraging omnichannel infrastructure to not only deliver compelling customer experiences, but also grow the top line.  Consulting firm Edgar Dunn has written a detailed whitepaper, ‘Optimizing Payments for Omnichannel Commerce’, covering many of these experiences:

  • Endless aisles - Out-of-stock (OSS) issues account for 4% loss in category sales. Endless aisles ensure you don’t miss out on those sales by turning your brick-and-mortar into an entire online inventory. Customers can make an online purchase while in-store via a consumer-facing table (or in-store kiosk) with a card-accepting mPOS. Adyen’s merchants have grown sales by approximately 2% by offering this.
  • Click and collect – Also known as “buy online, pick up in store,” customers can pick up their online shopping cart at a physical store, sometimes on the same day. While this may seem counterintuitive, customers don’t have to concern themselves about waiting for a delivery. Click-and-collect has shown to increase sales by 5-10%.
  • Omnichannel returns – Customers can return their online purchases at a store and receive a refund instantly. This results in a lower level of return fraud (which accounts for $17.6B per year in the U.S. alone), and gives you an opportunity to cross-sell.
  • Omnichannel zero/one-click – Purchasing can be made nearly frictionless when customers store their card details during an in-store purchase (with a dip or swipe), then subsequently pay via one-click or zero-click on future mcommerce purchases. Customers never have to manually enter their 16-digit card number, removing barriers to completing purchases. One Adyen ticketing operator generated up to 55% incremental sales thanks to enabling omnichannel one-click.

The omnichannel challenge

Retailers agree that offering their customers the best shopping experience possibly translates to revenue growth. However, many retailers’ systems remain siloed and they are unable to connect the dots on their customers. Online (including in-app) and in-store purchases are often stored in separate databases, which makes offering frictionless omnichannel experiences a logistical and complicated mess, if not impossible.

Omnichannel implementation

There’s light at the end of this tunnel. Implementing an omnichannel strategy isn’t as difficult or as painful as it seems, especially if you haven’t yet upgraded your EMV terminals. After all, new EMV terminals require new firmware, so you can kill two birds with one stone by loading the firmware of an omnichannel payments provider at the same time as your EMV installation. And with tech-friendly APIs, swapping out your ecommerce/mcommerce payments provider with the same omnichannel provider can be pretty straightforward. This way, you end up with a single payments provider across all your channels, and even across geographies.

Now is the time for the future

The next 10 years of commerce are going to look very different than the past 10 years. Brands will not only interact - but transact - with consumers throughout the journey, wherever they are. At home, at a park bench, in a car, at work, and yes, even in stores. To be ready for this future, which is already happening now, the EMV upgrade represents a perfect opportunity to think broader and think omnichannel. You’re not only protecting against fraud, but you’re changing the game in terms of delivering optimized customer experiences, driving increased revenue and customer loyalty. Now is a great time to invest in the future by supporting EMV and an omnichannel experience.