Spartan Speeds Payments
In search of faster throughput and more customer satisfaction at the front end, the Spartan Stores enterprise is now accepting contactless payments across its point-of-sale fleet.
With the help of retailers worldwide, contactless payments have evolved beyond a mere buzzword and into what is considered a viable payment option.
At face value, contactless cards are identical to traditional credit and debit cards, complete with magnetic strips. Unlike their swipeable predecessor, however, contactless cards also house a radio-frequency identification (RFID) chip, enabling cardholders to pay for purchases by waving the card over a dedicated payment terminal that authorizes the card and tenders the purchase.
Sour on Security
While contactless cards’ promise of security holds weight with many users, questions still abound.
The “tap-and-go” payment process boasts many benefits. It eliminates the need for cardholders to sign receipts for purchases under $25, which speeds up the payment process. And since the card never leaves the user’s hands, many shoppers are partial to contactless payments.
According to Aberdeen Group, Boston, the cards’ radio frequency (RF)-enabled chips also can be secured using cryptography and unique encryption codes. However, even this doesn’t satisfy all consumers.
“These cards may be convenient, but they’re a double-edged sword,” Sen. Charles E. Schumer said in an article that appeared in the New York City newspaper, AM New York, in December.
The article described how savvy thieves are using digital eavesdropping devices to electronically steal unsuspecting cardholders’ names, account numbers and other personal data as consumers “tap-and-go” at the point of sale.
“Thieves use the technology to steal your identity and credit number and go on a shopping spree at your expense,” he reported in the article.
Credit associations and other payment-industry associations disagree, however. According to the Princeton Junction, N.J.-based Smart Card Alliance, multiple layers of security protect contactless-payment transactions and keep them safe for usage among consumers and merchants alike, Aberdeen reported.
Shoppers never let go of their card, and transactions under $25 require no signature or receipt.
Purchase, N.Y.-based MasterCard International and San Francisco-based Visa USA, along with American Express, New York City, and Discover Financial Services, Riverwoods, Ill., all feature contactless products, each promising speedier, secure transactions.
“In the last three years, contactless products have come a long way,” said Sahir Anand, research analyst, retail, Aberdeen Group, Boston. And the products will get an even bigger boost as approximately 30,000 more outlets across the United States plan to accept these options, he added.
Spartan Stores is contributing to this number. The Grand Rapids, Mich.-based company owns and operates 87 supermarkets and drug stores in Michigan and Ohio under the D&W Fresh Markets, Family Fare Supermarkets, Glen’s Markets and The Pharm banners. The company also supplies 40,000 private-label and national-brand products to more than 350 independent grocery stores.
When the wholesaler opened 16 new stores under its newly acquired D&W Food Center banner in April 2006, the chain adopted MasterCard International’s PayPass contactless-card functionality, enabling MasterCard credit-and debit-card holders to simply “tap-and-go.”
“The card’s promise of accuracy, speed, security and customer service were the main factors that persuaded us to adopt the technology,” Jeanne Norcross, Spartan’s VP of corporate affairs, told Chain Store Age.
To date, every IBM register across all 87 supermarkets, fuel and convenience stores, and pharmacies within the Spartan family are accepting PayPass contactless payments. The chain also is upgrading self-checkout units to accept the cards.
Although Norcross declined to reveal current customer-adoption rates, “We do expect usage to ramp up as card issuers continue sending out the RFID-enabled cards,” she added.
“Looking ahead, we expect to see wide usage across our customer base,” Norcross said. “And we expect the cards to deliver a very positive impact on customer service.”
Spartan also plans to accept other RFIDenabled payment products enterprisewide in the future, according to Norcross.
Victoria’s Secret Names New CEO
Columbus, Ohio, Limited Brands Inc. on Monday announced that Lori Greeley will replace Grace Nichols as CEO of Victoria’s Secret Stores. Greeley is currently executive VP and general merchandising manager of intimates for Victoria’s Secret.
The retirement of Nichols, a 20-year Limited veteran, from the CEO post was announced in May 2006. She will take a new role supporting initiatives within Victoria’s Secret, including the growth of its Intimissimi brand.
Additionally, Mark Weikel, COO of Victoria’s Secret Stores, will add the title of president.
Wal-Mart to Focus on Expanding Seiyu
New York City, Wal-Mart Stores is open to acquisition opportunities in Japan, but the retailer is more focused on expanding business at its 53%-owned Seiyu chain, according to a report by Reuters. Shares of Seiyu jumped Monday after Wal-Mart vice chairman Michael Duke told the Nikkei business daily that the company might look for more acquisition opportunities in Japan.
The paper reported that Duke welcomed planned changes in corporate laws in May that will enable foreign companies to buy Japanese firms through share swaps.
Wal-Mart last year tried to invest in superstore operator Daiei Inc., aiming to boost its presence in the country, but it lost the chance to Aeon Co., Japan’s second-biggest retail group.
Wal-Mart entered the Japanese market in 2002 by taking a small stake in Seiyu. It has since invested more than $1 billion in the chain, but has yet to return the retailer to profitability.
Wal-Mart spokeswoman Amy Wyatt said Wal-Mart’s focus in Japan is on Seiyu.
“It’s a very sizable business today, so we still think that there are a lot of growth opportunities in the existing business,” she said.
In terms of acquisitions, she said: “I wouldn’t go as far as to say we’re shopping for them.”