Contactless payment – progress so far

Mastercard Paypass

In March this year the results of the City trial of contactless payment were just becoming available, the Barclaycard Onepulse had just launched, predictions for the number of terminals by christmas were 100,000 and the plans for issuing cards were 5 million by the end of 2008.

Well, its nearly September and some retail outlets are adopting the technology. EAT and Commidea were the first to implement an integrated contactless payment system and won the Payment Solution Award at the European Retail Solutions Awards. Coffee Republic are rolling out contactless to their 16 company owned branches and are hoping to include the franchise estate over the next year. Yo! Sushi and Krispy Kreme are other high street names quoted as signed up.

The cold hard numbers are not looking as though they are going to meet the earlier preditions however. In an article in ITPRO on June 16th APACS stated that there were 337,000 contactless cards in circulation and just 6,000 sites which could process them (of these 1,000 were part of the trial). See link for full article. In a survey carried out in June by CPP 88% of Brits had not heard of contactless payment.

Implementation of contactless payment systems is entirely voluntary. There are none of the compliance considerations that Chip and Pin and PCIDSS carry. It is a purely business decision – does the reduction in transaction time and increase in business due to customers choosing to shop at outlets which have the system implemented, justify the cost of implementing the technology? In the current climate, it looks asthough most chains are waiting to assess the business case and letting the technology gather momentum.

Or are retailers waiting to see if cards are the eventual medium for this technology. Could it be the mobile phones are the eventual solution? Whatever the case, the move towards a cashless economy is only inching forward at present.

The London Triathlon, any parallels with retailing?

Rachel Maclean finishing the London Triathlon

Last weekend was the London Triathlon. Hence the lack of focus on retail technology in this column!

I entered the Olympic distance for the second time, looking to improve on my time of 3 hrs, 3 mins last year. (See the very unflattering photograph of me finishing!) Having done quite a bit more training and invested in a new bicycle I fancied my chances. Unfortunately, a combination of wind on the swim and cycle, and wasting time in transition two trying to find my kit put me behind last year at 3hrs, 6 mins.

So, adverse conditions and a silly mistake meant disappointment. I’m not that bothered. I really train to keep fit and enter events to make me train! I think that from now on though, I will read a few books and magazines and try and apply a bit of science to make my training more effective. I can’t fit a great deal more training time in so I need to make what I do more effective. And I need to improve my performance so that silly mistakes can be absorbed and I still achieve a better time.

It stuck me that there are some paralels here with retailing. How can retailers improve their results in adverse conditions without increasing the resources they spend? And how do they avoid silly mistakes? Is the appliance of science the answer? How can promotion, price and range analysis, sales forecasting, stock management and space planning be improved to deliver results even when conditions are tough?

Options to tackle basket abandonment

A OnePoll survey of 3,000 consumers in May found that 53% of people felt worse off. Cut backs in spending were concentrated on clothes, CDs and DVDs, and books. It was also found that there has been a 32% increase in people shopping on line this year though it is not made clear how this corresponds to percentage increases in total value. The reasons cited for this were:
- 24 hour availablity
- ease of price comparison
- improvements in navigation of sites

So more evidence that the web is holding up against the credit crunch better than bricks and mortar.

According to Logan Tod (ecommerce optimisation & web analytics consultants) many merchants only convert a third of shopping baskets. The reasons cited for this from a survey conducted in Dec and Jan were:

- 20% gave up due to taking to long
- 10% got confused
- 37% changed their mind
- 20% just used it as a shoppping list

Logically that means that 30% of basket abandonment could be avoided if the checkout process was slicker.

A novel approach to basket abandonment is being investigated by call centre outsource provider Vertex. They are trialling calling known customers who abandon baskets. How would you react to this? If you had changed your mind or were just making a shopping list as 57% of people stated, would you feel this was a bit intrusive? On the other hand, if you had been unable to complete the purchase of an item you desperately wanted, you might be really grateful.

This approach might be appropriate to retailers selling own branded products which can’t be purchased elsewhere or for customers who are identified as being less skilled at using technology. In general, I think enabling the customer to call the retailer and providing a swift response might be better recieved. Simply improving the check out process is another option….