News

Mobile Payments

BY CSA STAFF

Consumer use of smartphones and tablets is helping to drive the growth of mobile transactions in retail. Chain Store Age spoke about the growing trend with Don Kingsborough, VP retail services, PayPal, which recorded $14 billion in mobile payments in 2012 and expects to exceed $20 billion this year. According to Kingsborough, PayPal is well-positioned to tap into mobile payment growth as it already has three key elements in place: a large consumer base (55 million-plus in the United States), a network of merchant partners and "ecosystem" partners.

Apart from the elements you referred to above, what else is key to getting shoppers to use a mobile payment option?

Additionally, you need to offer value. Tapping and paying today is no different than swiping a card, but creating value is key.

How does PayPal create value?

By offering shoppers coupons or rewards and by creating unique experiences that add convenience or allow them to save time. For example, we are working with Jamba Juice to enable people to order ahead via the PayPal app. After people order, they can go to Jamba Juice and simply pick up their order and walk out. They already paid so they don’t need to wait in a line.

What about retailers — are they on board with digital wallets?

I’ve met with more than 200 large retailers around the world, and every one of them is working on mobile payments because the people who shop at their stores have a desire to use digital wallets that work in-store, online and on a mobile device.

So yes, retailers are on board!

About how many retailers are using PayPal’s payment solution?

At the close of 2012, we had agreements with 23 retailers to enable their customers to pay with PayPal in-store, which translates to PayPal being available in more than 18,000 locations in the U.S. And this spring, PayPal will be accepted in millions of more locations through our collaboration with Discover.

What is PayPal’s approach to mobile wallets?

PayPal is a ‘virtual wallet’ — accessible from any number of form factors (card, hands-free, mobile bar code, mobile check-in, etc.), and that works wherever the customer is and however the customer wants to pay. PayPal offers users a choice of how they want to pay in a simple, fast and secure way.

Does PayPal’s experience in online payments give it an advantage here?

We have 55 million customers in the U.S. and 123 million active customers worldwide, and that alone gives us a great advantage. These people want to use PayPal, and we are giving more options to do so both online and in-store. Additionally, a big part of the industry lead that PayPal currently has is the added layer of security that has always been provided. Our approach overcomes a key barrier to other digital wallet models, which require consumers to put payment credentials in their phone, thus opening up security concerns.

Do retailers have to buy new hardware to accept the PayPal solution?

PayPal works seamlessly with a retailer’s existing point-of-sale hardware because it is an open platform that is both device- and platform-agnostic. This simple integration allows for a checkout at the register that is simple, fast and secure.

How will PayPal’s new partnership with NCR help expand its digital wallet footprint?

We are working with NCR to leverage their strong footprint with retailers and the hospitality industry and encourage mobile and digital payment adoption.

In the first phase, NCR will integrate PayPal mobile payment options into the recently announced NCR Mobile Pay application and NCR Aloha Online Ordering. With this integration, PayPal will be a payment option and allow consumers greater choice for simple, fast and secure purchases, alongside credit or debit cards. Consumers will also be able to use the PayPal mobile application to locate, order ahead and "check in" at participating NCR Mobile Pay merchants to access the same functionality.

For an extended version of this article, visit chainstoreage.com.

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INVENTORY

Seamless Connections

BY Marianne Wilson

Edwin Watts Golf has grown significantly during the past several years, expanding its store portfolio and direct mail and Internet businesses as well. With growth came an increased complexity that taxed the capabilities of its aging legacy systems, which did not provide visibility across channels and among stores. The retailer decided it was time to invest in a new solution due to the age and fragmentation of its existing systems.

"Fundamentally, we had a legacy system with old hardware and three fragmented software systems," explained Lynda Barr, CFO, Edwin Watts Golf, Fort Walton Beach, Fla. "It would have taken a significant investment to our AS/400 hardware as well as various other software upgrades to bring the systems current, and we thought it would be better to invest in a new, fully integrated ERP option."

In selecting a new retail solution, Edwin Watts had an important priority: It had to be multichannel.

"We have retail operations as well as a call center and website, and we needed a solution that could service all segments," Barr said. "As a specialty retailer, we knew we wouldn’t find something that would be an exact fit ‘out of the box.’ We needed to have a solution that had a high degree of flexibility and ease of customization."

In reviewing the top-performing retail applications, the Edwin Watts team looked for vendors that could support the chain’s multichannel model and deliver inventory/warehouse management, point of sale and general ledger in a single system. After reviewing the solutions against a 215-point functional specification, the retailer decided on Microsoft Dynamics for Retail.

"We wanted to service the customer consistently and share customer information across all channels — retail operations, call center and website all needed to operate through one system," Barr said. "Microsoft Dynamics for Retail gives us one view into our business performance."

Another advantage of the Microsoft solution was that it gave Edwin Watts the flexibility to select the partner that would deploy the system.

"From an IT perspective we viewed that choice as a positive differentiator," Barr said.

Barr and her team were also impressed by the availability of a wide range of third-party add-ons that provide specific custom functionality within Microsoft Dynamics for Retail. (The initial deployment at Edwin Watts includes Certified for Microsoft Dynamics solutions that help with bank reconciliations, tax calculation and Wi-Fi mobile inventory management.)

"Because of the Microsoft Dynamics partner model, there were multiple companies that we could choose from for that custom functionality," Barr said.

The Microsoft solution went live at the end of January and, at presstime, Edwin Watts was in a settle-down period. (The system was deployed by Ignify, the 2012 Microsoft Dynamics Partner of the Year, which also did the implementations for Microsoft’s retail stores.)

"We will have additional phases to continue to expand the functionality of the system," Barr added.

As to the benefits of the new system, Barr thinks the biggest asset is on the inventory management side.

"The Microsoft Dynamics for Retail solutions allows us to centralize purchasing and optimize inventory across all channels and locations," she said. "We will be able to improve our customer service efforts because of centralized inventory management."

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News

Beyond Cost-Cutting

BY Laura Klepacki

Retailers are putting an increased emphasis and value on how and when they use their workforce. And in doing so, they are on the right path, according to research from The Wharton School. The study found the associate payroll was the most important factor in determining revenue. A mere additional dollar (properly applied) on labor could reap rewards of $4 to $28 in return.

"The rating of store associate knowledge had the second biggest impact on sales," said professor Marshall Fisher, during a panel presentation at the National Retail Convention & Expo in New York City. (The third factor was product availability or the in-stock situation.)

Additional Wharton research found that most retailers could "significantly boost their revenue simply by changing one planning metric." That is, by linking staffing levels to store traffic, rather than revenue. Many retailers are already using traffic counters to ascertain customer patterns, according to Fisher.

"And I think more and more retailers are looking at improving conversion," he said. Norm Daigle, manager of labor and productivity for Hannaford Bros. Co., a 180-store grocer based in Scarborough, Maine, said the chain recently added an automated scheduling program in three service departments — meat, produce and seafood — that incorporates foot traffic data in 15-minute increments. (The retailer has used time and attendance and forecasting and scheduling solutions from Kronos for several years.)

The result has been a redistribution of labor and "even adding some labor," Daigle said during the presentation.

"We realized it was critical to be well-staffed from 4 p.m. to 7 p.m. weekdays," he added. "It made us better positioned in the evening hours when many people are picking up dinner on the way home. The opportunity to improve service levels is something that is top of mind for me."

For Hannaford, workforce management has been an evolving strategy.

"Out of the gate, it was about controlling costs," Daigle explained. "But over time, it has evolved to a position where it is really about the customer experience in our stores."

Hannaford recently enhanced its workforce management strategy with the addition of Kronos’ labor analytics application and next-generation user interface. The analytics solution will enable Hannaford to identify, predict and manage opportunities for cost savings and productivity gains — all while ensuring a consistent and positive shopping experience.

Ocean State Job Lot is thinking along the same lines. The 109-store close-out retailer installed Kronos’ workforce HR tool and is using it to run time and attendance. Ocean State is also implementing a program to create store schedules, freeing up store managers.

"This saves time, but more importantly, it allows us to better utilize our [labor] resources by aligning them closer to customer traffic in the front door, the merchandise flow in the back door and the tasks assigned to the stores from corporate," said David Gouveia, project manager, Ocean State Job Lot, Kingston, R.I. "We are not trying to cut costs but to do more with our existing budget."

One thing is certain: Management buy-in is critical to the success of workforce management tools.

"If management doesn’t buy in, the employees won’t buy in. If you don’t have adoption by store-level management, you won’t be successful," Gouveia said.

Laura Klepacki is a contributing editor to Chain Store Age.

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