New Consumer Expectations, New Opportunities for Retailers
Consumers continue to make the majority of their purchases at the physical store. However, their constant connectivity to the cloud through smartphones, laptops, tablets and smart watches — combined with the popularity of e-commerce — is redefining their expectations of the ideal in-store experience. Today, consumers want the same convenience, personalization and simplicity they’ve grown accustomed to online.
Industry research shows that, rather than trips to just make purchases, shoppers are drawn to in-store experiences that are digitally-connected. These include:
• Using their favorite apps.
• Wanting store associates to know who they are — even if they normally shop online.
• Being rewarded for their loyalty — not with generic offers — but with personalized incentives that are relevant to them.
• Using their payment method of choice, without spending an eternity in the checkout line.
While these expectations are shared by consumers of all ages, they’re especially prevalent among millennials and other new generations that have likely never known a world without the advanced technologies embedded in society. According to a report by Seurat Group, more and more millennials are entering the workforce every year, and by 2020, they’ll represent more than 40% of consumers in the United States.
To meet the demands of these modern consumers, retailers must tear down the silos between their online and physical storefronts. Connecting both channels can provide retailers with access to the advanced consumer data and analytics needed for better targeting, consumer insights and personalization across all customer touchpoints. However, integrating online and physical storefronts in a way that is consistent and seamless from the consumer’s point-of-view is easier said than done, considering the complexity and ever-changing nature of technology, apps and regulation — not to mention the limited bandwidth of IT resources.
Fortunately, payment technology offers a solution for retailers to overcome these obstacles and efficiently break down these barriers. Recent innovations in this space have catapulted point-of-sale (POS) technology to do much more than accept payments.
Besides accommodating all payment methods, including NFC and contactless, many new payment terminals feature HD touchscreens that engage shoppers during checkout with brand messaging, special offers and other multimedia content chosen by the retailer. Bluetooth Low Energy (BLE), 3G/4G and Wi-Fi connectivity combined with portable ergonomic form factors allow retailers to extend the POS beyond the counter and throughout the store, helping reduce the time customers spend in checkout lines while creating a more one-on-one shopping experience. Such hardware features radically transform the shopping experience when they’re connected to the cloud. This merges in-store and online shopping channels, and allows retailers to continuously grow and expand their payment systems as consumer and business needs evolve.
From a central location, software can be uploaded or “pushed” to connected devices throughout the enterprise — streamlining compliance with ongoing PCI changes, and strengthening retailers’ ability to protect themselves and their customers against the ever-present threat of payment data breaches and cybercriminals. Cloud-based estate management tools also provide retailers with on-demand access to sales and payment processing information, which streamlines reporting processes and offers historically unavailable customer insights and business intelligence data.
Furthermore, payment device cloud connectivity expedites retailers’ ability to support popular business and consumer apps at the POS. By leveraging app marketplaces and developer tool kits, proprietary and third-party apps can be developed, tested and supported on their devices. This provides a number of benefits — from improved customer loyalty via points programs, or geo-targeted offers inside the store, to tailored incentives based on online purchases at the point of sale and improved inventory management via e-commerce and legacy system integration.
All of this is merely a snapshot to help illustrate the extent to which some of the newest payment technologies have evolved. Basic payment acceptance devices are now becoming powerful tools offering an innovative way for retailers to create the shopping experiences demanded by consumers today, with the flexibility to accommodate those they’ll want in the future.
Skip Hinshaw is the VP & general manager, North American Financial Services at Verifone.
Walgreens gets regulatory OK to buy Rite Aid stores
Walgreens Boots Alliance secured regulatory approval for a deal to buy stores from Rite Aid Corp. after a reduction in the number of stores and price. The deal will still enable Walgreens to dramatically increase its store footprint, giving it a total of about 10,000 U.S. locations.
The drug store chain announced Tuesday that it has secured regulatory clearance for a revised deal under which it will buy 1,932 stores, three distribution centers and related inventory from Rite Aid for $4.375 billion (and other consideration). The original proposal, announced in June, had included 2,186 stores and related assets for $5.175 billion.
“Combining Walgreens retail pharmacy network with a strong portfolio of Rite Aid locations is expected to help us achieve enhanced, sustainable growth while enabling us to broaden our reach and provide greater access to convenient, affordable care in more local neighborhoods across the United States," stated Stefano Pessina, executive vice chairman and CEO, Walgreens Boots Alliance.
The stores that Walgreens is purchasing from Rite Aid are located primarily in the Northeast and Southern U.S. After the acquisition is completed, they will be converted to the Walgreens banners in phases.
The three distribution centers being acquired are located in Dayville, Conn., Philadelphia, and Spartanburg, S.C. The transition of the centers to Walgreens will not begin for at least 12 months.
Along with the cash transaction, the deal also includes the assumption by Walgreens of the related real estate leases and the grant of the option to Rite Aid, exercisable through May 2019, to become a member of Walgreens Boots Alliance’s group purchasing organization, Walgreens Boots Alliance Development. Walgreens will also assume certain limited store-related liabilities as part of the new transaction.
Rite Aid expects to use a substantial majority of the net proceeds from the transaction to repay existing indebtedness which will improve the company's leverage levels. It also expects that the gain it will record on the sale of the assets will be largely offset by its net operating loss carryforwards, resulting in a minimal cash tax payment on this transaction.
Immediately following the completion of the transaction, Rite Aid will continue to operate approximately 2,600 stores and six distribution centers as well as EnvisionRx, its pharmacy benefit manager, RediClinic and Health Dialog.
"With a compelling and more profitable store footprint in key markets, enhanced purchasing capabilities and a stronger balance sheet and improved financial flexibility, we are well positioned to implement our plans to deliver improved results," stated John Standley, chairman and CEO, Rite Aid. "We are committed to supporting a smooth transition as we remain focused on delivering a great customer experience, improving our business and creating value for all of our stakeholders."
The transaction has been approved by the boards of directors of both companies and is still subject to other customary closing conditions. Store purchases are expected to begin in October, with completion anticipated in spring 2018.
Texas developer partners with United Way on Harvey
Fort Worth-based Trademark Property Co. has launched fundraisers at its properties in Texas to aid victims of Hurricane Harvey. Proceeds will be distributed via United Way, which is waiving all general and administrative fees in the arrangement with Trademark.
Tenants, financial partners, customers, and the community are being engaged in events, and Trademark has pledged to match up to $150,000 in donations. Miller Capital Advisory has pledged a matching donation total of $50,000 for fund collected at La Palmer in Corpus Christi.
Trademark also owns Rice Village in Houston.
“As a company with deep ties to Houston, Corpus Christi, and the Gulf Region, we are inspired by the stories of resilience and communities coming together,” said Trademark CEO Terry Montesi.
Trademark is inviting the real estate community donate online at app.mobilecause.com/vfu/HARVEYHELP or by texting HARVEYHELP to 30306.