What were the biggest trends at the 2015 NRF Big Show?
So I think EMV has really kind of captured the limelight here. A number of conversations with different vendors and that’s kind of squarely within the crosshairs right now. With October 2015 not that far out, vendors are working to get compliant, working to make sure they have solutions in place to help merchants get prepared. I think that’s been a central message here. I’d also say security is a big focus. So while EMV is certainly a component of the overall security story, a lot of talk about end to end encryption, tokenization is seeing increased attention as a result of Apple Pay and as a result of the number of breaches we’ve seen over the past few months here and certainly broader than payments there’s a big story around in-store engagement. So beacons are certainly a big part of the NRF message this year, seeing a lot of talk about really engaging shoppers in store, how do we keep them in the store, how do we push out relevant content to them, and how do we engage with them, how do we make the shopping experience unique, and add value and differentiate from competitors.
Is omni-channel still a big focus for retailers in 2015?
You know the omni-channel theme is there but I think retailers are finally starting to get that it’s really not about omni-channel, it’s really about looking at a consumer and understanding how they interact with the brand, how they interact with the merchant itself. Consumers don’t think in terms of channels, they think in terms of convenience and what’s easiest for them. So really having a channel specific view of a consumer isn’t all that useful it’s about understanding how they interact with you across each of those touch points and how you make the experience unique to them.
Have you seen a demand for out-of-store payment solutions?
I mean to some extent, I think right now in-store engagement is really the central theme but we’re seeing a big push around merchant-lead payment applications so you can think of Starbucks as the great example there, but certainly MCX and their currency application which should come to life at some point this year is an example of retailers really trying to interact with consumers anywhere they are. So pushing out offers when they’re at home, looking at their past transactions, and formulating relevant promotions. Pushing to them and trying to get them back in the store. So I would say that in store engagement is kind of the central theme right now but really just trying to attract consumers and get them in the physical store is a big theme as well.
How significant has Apple Pay’s impact been on the market and what are your predictions for Apple Pay adoption?
You know, the best thing that Apple Pay has done so far is raise collective awareness around mobile payments, it’s really elevated mobile payments from a topic that was somewhat relegated to the trade publications to one that’s finally in mainstream media. So consumers and merchants certainly know what mobile payments are, they’re aware of Apple Pay. But I think the fundamental issue is that it still lacks a real compelling value proposition. At the end of the day Apple Pay is still just a credit card surrogate, mobile is almost this veneer over what already exists. There’s really no compelling value to use it over your credit card other than the novelty factor. I think as the story builds out, as it becomes more about loyalty, more about rewards, that’s when things get interesting. But certainly as we mentioned, EMV is a driver here and starting to get merchants prepared. There are benefits to adopting NFC compatible terminals as EMV comes around the corner here so I think that will start to build out the acceptance network to some extent but a broader value proposition is still needed.
What criteria should retailers be using when evaluating which payment solution providers to work with?
I think security is really the central theme here. Does the vendor have a pedigree in security, are they known for providing secure solutions, you know have they worked with other merchants in the past and do they have a good track record with them? I think that’s a central component there. And just experience overall. You know payments are a very complex topic, you want to make sure you’re working with a vendor that’s trusted in the space and also one that’s betting on mobility. Mobile continues to be a bigger part of the commerce story, continues to become a bigger part of payments. So the vendor should have some sort of mobile focus and be telling a compelling story around that.
Jordan McKee is a Senior Analyst at 451 Research
