Where to for digital retail revolution?

The world of digital retail has really taken off in recent years. Fi Bendall spoke with Paul Greenberg from NORA, and former Managing Director of DealsDirect, about the emerging strength of eCurrency and the digital evolution.

Recently there has been talk of an overhaul of the payment system in Australia to try and introduce real-time payments, do you think this is necessary for the 17 banks to back and how will it affect middle business?

Many have said, and I tend to agree, that the banking and payment systems in Australia have been amongst the least disrupted sectors by the digital shifts over the last decade or so. Certainly real time payments should be a part of the landscape, benefiting both payers and payees, customers and merchants. And undoubtedly the way to deliver this solution would require collaboration and support by the banking system. That would include the banks of course as well as the enablers in the payment chain. The question is will the banking system, and indeed the regulators welcome innovation like, say, Bitcoin as part of the payments eco system? My strong sense is not. But then again, if the customer has control in this shift age, which I believe they do, than innovation will be ‘ forced’ upon a sector as it so often is.

The rise of the smartphone has of course changed digital retail forever, however – what has been shown is that there has been massive improvements in how consumers can pay online via mobile. Where do you see further advancements in the next five years and how will it affect retail?

Yes, mobility has certainly changed the rhythm of retail, and for those retailers who have embraced the opportunity, it has been a massive enabler of business, driving both online and in store engagement at unprecedented rates. But in the relentless pursuit of continuous improvement, customers want mobility to be easier and to save even more time. Seamless is a word used a lot, I like the term, it speaks to a zen flow of customer experience. In this regard, I think we will see more advancements in the ‘ tap n go’ experience driven by ongoing NFC innovation. In store, biometrics including broad facial recognition technology will enable quick and seamless payments. ‘Look and go’ will be our new way of paying.

Hand held devices have always been somewhat clunky to key in payments, so continued progression of ‘ one click’ payments on mobiles will be part of the landscape. Keying in credit card information and long user ids and passwords into mobiles is not sustainable, so solutions that will eliminate this will continue to build. Contactless payments and digital wallets will become the norm. Cash withdrawals from ATM’s and BP via Bpay technology will increasingly be cardless, with the mobile device being the enabler. Some retailers with a whole view of customer  will not require payment upfront when dispatching goods in the online environment. Broadly, the benefits of mobile innovation for retail lie in the intersection of the physical and digital experience. We know that customers are demanding multiple touch points with their retail brands of choice. Mobility now allows retailers a whole view of their customer in both the online and physical environments. Using digital technology to track customer engagement online, and combine with location based technology in store, will enable a richer and more relevant shopping experience for the customer and better yields for the retailers.

Lastly digital currencies like Bitcoin will weave their way into the mainstream payments experience. Customers like choice, Bitcoin is another welcome option for shoppers. And therefore another boon for retailers. All of the above initiatives if deployed correctly have the benefit of reducing the current epidemic of card not present fraud which is a causing Australian online retailers significant pain.

Cloud-systems are popular for ease-of-use for business, do you believe it really does remove the friction inherent in offline (or digitally limited) transactions? If so, should middle business invest in such software?

In broad terms, the digital age has given business and customers a real sense of ‘ anything, anywhere, anytime’ I see this as a liberating development for business freeing enterprises, particularly in the SMB sector, from significant upfront capex costs, by reducing the need for heady investments in hardware, storage, and real estate. Software as a service rules. But getting back to the customer the point is this. Physical confines are a limiter in retail. For example, why take customers to a counter to pay in the physical environment? Retail and the path to purchase are increasingly – nonlinear, whether online or offline.

Straight lines and queues are out, zig-zagging and meandering are in. Point of sale solutions are coming up as pain points for customers. The next time you order a coffee, watch the unfortunate person at the point of sale solution at the counter tap that screen. Ten taps for one cup of coffee? What is that? Mobility driven solutions that are cloud based, and unlocked from fixed physical infrastructure is the way the world is heading. Increasingly retailers will be putting shops where customers are, not waiting for customers to come to shops. A case in point, one of Super Cheap Auto’s largest annual revenue stores lives for three days only and is then packed down. Where? The Bathurst 500 Motor race.

Beyond digital transactions, the data from transactions are somewhat of a marketer’s dream. Big-data is the word du jour. But what needs to be explored is how can middle business effectively capture this data and use the expansion of digital transactions to their advantage. What are some strategies, from similar businesses, that you have seen work recently?

Frankly, it is difficult to add anything to the enormous amount of buzz around data and insights. I think there is general consensus that although all retailers big and small, can appreciate the benefits of understanding customers at scale in a personal and relevant way, but that this is difficult to execute and still somewhat of a holy grail. Some of the larger retailers like Woolworths and Telstra are leading the field, but this has been led by significant investment in talent and technology. And embedded in their strategy is a general acceptance that it is ‘ learning by doing’ in this brave new world of data.

Also there is general consensus that all businesses have gold mines of data. But it is the accurate extraction of this data and  more specifically the deployment of the data tactically, which is where the game will be won, or lost. I have also heard arguments from small to mid-sized  businesses to the contrary. They claim that we can be guilty of ‘overthinking’ big data. Smaller fast growing businesses seem to have an uncanny knack of interpreting their customers’ needs by being in ‘ constant conversation. Using social media as a connection tool, and tried and tested but robust ‘loyalty’ programmes, they connect and deliver. Examples. I like Speciality Fashion Group, a smaller cap ASX listed retailer. And an early pioneer in loyalty programs and customer lifecycle marketing with their Millers Club Card.

A cohesive business is a productive business. What do you think has shifted since the digital revolution regarding internal corporate culture? What’s different now in how colleagues and managers interact as opposed to 10 years ago? If there is such a large difference, what implications does this have for businesses looking towards the future?

In many ways the digital revolution in retail, which has driven a consumer spring, a consumer renaissance, a renaissance in which control has passed from the retailer to the customer, has been mimicked in corporate cultures. In retail, the default to ‘ control’ which retailers have used as a strategy for decades no longer works in a retail environment where customers have unprecedented access to information, and where they hunt in packs via social media, believing each other more than they believe brands. And indeed the linear control structure of management within corporate culture has also been disrupted by the digital shifts, combined of course with generational transition in the workplace. Good executives appreciate that we live in an era where ‘ control’ is gotten, well, by giving it up. Powerful internal social networking tools like Yammer are encouraging flows of information across silos, and often directly from junior employees to the highest levels of management.

These tools are about flattening hierarchies and building common purpose. The much needed nimbleness and agility within business requires some whole and ‘post rational’ conversations internally. A recognition and acknowledgement by senior leaders that they ‘ do not always know’ is proving to be liberating and productive to corporate culture. ‘Servant leadership’, leading from the back, will continue to find traction in dynamic corporate cultures. And the war cry, ‘ be human before being a manager’ will continue to find currency. Forward facing enterprises will to focus as much on EQ as they do on IQ as the future hurtles towards us. Dealing with the fast pace of change will mean that skill and intellect will need to be matched by a psychological robustness.

Paul Greenberg is a pioneer of digital retail. Co-founding DealsDirect in 2004, under Paul DealsDirect became the single largest online-only retailer in Australia. After leaving DealsDirect in 2013 Paul founded NORA to share his knowledge of, what he dubs, ‘new retail’ which has technology and customers at its heart. Paul promotes best retail practice through NORA. Paul has a holistic view of business and an optimistic approach that has given him many awards, such as Top 50 Online Retailers in 2014 by InsideRetail.

Fi Bendall is an expert and pioneer in digital strategy and one of Australia’s most respected leaders in the digital space. She is the Managing Director of Bendalls Group, a team of highly trained digital specialists, i-media subject matter experts and developers. Her business leads some of Australia’s most successful business strategies.