By Danielle Pamela Neben, Editor at Nordic Finance Innovation
We're living in a frenzy of transformation and challenges. But sometimes we need to stop, think and explore new ideas. That's what we did on June 23, in an insightful Fireside Chat with Dimas Gimeno Álvarez (previously Chairman and CEO at El Corte Inglés) , Brian Farrell (previously Executive Creative Director at BBVA) and Kristian Bjørseth (Head of Payments & ID at Coop Norge) hosted by Marisol Menendez (NFI Connect & Open Initiatives).
Demand drives online
With COVID19, people have had no choice but to turn to online shopping for their day to day needs.
One of the big winners was grocery retailers with huge increases in demand. Companies like Aldi and Lidl had no choice but to provide online solutions from their traditional low-cost store setups. For Coop Norge, they had building supplies deliveries in place, but no home deliveries for groceries. Their online grocery solution was done in two weeks.
“Online is very important. I cannot sell food without having a strong online channel that not only is going to help me sell better, but in these kind of situations is crucial. In fact, we saw players like Mercadona, the main leader of food in Spain, closing their activities because they admitted that they could not serve the product well through online. If you cannot ensure that the service is correct, sometimes it is better to close it down until you really manage that.” – Dimas Gimeno
Unfortunately, companies on the high street have suffered including fashion retailers. With people staying home, many are questioning the need for fast fashion. Do we really need to buy cheap clothing to be discarded after one use or accumulating closets full of clothing after working at home in our leisurewear and pyjamas all day? These businesses will need to adapt to behavioral shifts in their clients.
Customer relationships and user experience
An advantage for the smaller neighborhood stores and restaurants is the personal relationship. During COVID19, many have been providing phone order services and home deliveries. Sometimes the only personal contact that their clients had during the day.
For large retailers, the consequence is a hyper personalization of the client for a customized service. Data is even more important now. Everyone wants this data: retailers, banks, institutions. For retailers, it is one of the most important assets. With payment solutions, this brings retailers into a universe where they gain data and meet the needs for a customer journey. Understanding what they have previously bought and their preferences.
In China, there had also been a huge demand for online after SARS in 2003. But even for Alibaba, the largest ecommerce company in China, they have invested in offline stores through their Hema retail chain to merge online and offline retail. When in store, customers use an app to scan the products, get information and pay for their groceries. In select stores they even have facial recognition technology. Deliveries are made in store or for home delivery.
At Coop Norge, not only did they come up with online grocery solutions, but they also created the “unmanned” store accessible 24x7.
“We are doing this as we are interested to see how we can keep stores in rural areas of Norway, where we have less people to hire, so we have one person overseeing several stores. We identify each customer going into the store. Trust is really important. We were voted the most trustworthy company in Norway. We also try to give that trust back to the customer. They can do their shopping 24 hours a day. The entire customer journey will change. We say we don’t need a payment terminal because it is an ecommerce solution. Our challenge is the card schemes don’t support how we do it. We are innovating faster than the market player.” - Kristian Bjørseth
Trust, security and privacy
One of the biggest concerns for clients during COVID19 is about security of health, not to become infected. The consequence is contactless. All retail experience needs to be great, but it needs to be secure. Processes have been implemented for disinfection at every touch point, whether by staff or clients. There has been an acceleration for self-checkout and a huge interest to reduce cash.
By moving into self-checkout and online, people want their data to be safe. Trust is both reliability and safety. Complying with GDPR, PSD2 and verification of identification is a minimum.
On the other hand, automation can sometimes go too far where people are not comfortable that payments are too seamless. There is a need to add in friction points.
“Seamless payments to some seem like removing steps. But to us, it is how to responsibly add in friction, so we meet the needs of users to help people create a more financial healthy future. The challenge is how not to sacrifice human need and current user behaviors at the core of our decisions. For example, Uber came out with search pricing. Many people woke up on Sundays after a night out with an extra $100 to $200 charge because they had no clue about taxi fares. Uber implemented an extra step of friction to show pricing so people would know. At Bank of America, they completely removed a lot of steps for online transfers. Fraud complaints increased at month end because people forgot their purchases. So they added an extra steps to confirm payments.” -Brian Farrell
At Coop Norge, it is possible to have an end-to-end self checkout process, even for the sale of alcohol by using Secure Customer Authentication solutions to define age. But the physical appearance of store employees is important for the future for their support at self-check-out for less technically able clients, as well as giving that sense of security.
We have had people attend our online fireside chat from the Nordics, Mexico, Columbia, Chile, Asia, Retail, Startups and Corporations. What is the call to action?
“You have to take decisions. Your background, the client, the competitors. In 3 months you gained 2 years of future. If you don´t move and make decisions, it will be tough. But if you do it correctly and with courage, you can have winners. Startups have huge opportunities for shake up and provide solutions. And feel free to contact me directly.” – Dimas Gimeno.
“Innovation is key to move forward. But important to take moments of pause and reflection to understand user needs and behaviors. So innovation is accessible for all.” - Brian Farrell
“Focus on projects that have an impact. Don’t focus on projects with incremental topics. Focus on impact on customer journeys to make it easy. Be open. Be honest to GDPR. This is core to succeed as a payment player to gain customer trust.” - Kristian Bjørseth
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