According to 2015’s research by Planet Retail, the future of retail management is expected to be more personalized and collaborative. The personalization and collaboration can already be seen by Square’s partnership with Vend.
This partnership will enable Vend’s US-based retailers to process payments using Square.
Square was among the first companies that contributed to the wide acceptance of mobile payments. This is through the use of its plug-in card reader in 2010 that revolutionized card payments via smartphones. Since then, the company has increased its offering. It now includes inventory management and sales analysis tools. It also offers loan services.
As seen in Forbes, Square serves 30% of independent businesses in the US. Apart from the various products they offer, payment processing services make up 95% of its revenue. It had its IPO in November 2015. One of the notable things since its establishment is that it has been making net losses. This partnership means that things are looking positive for Square and its financial future.
Vend is a company that provides POS software, including inventory and retail management. It serves more than 15,000 retailers who process more money than Square customers. Simply, this integration enables Square’s hardware to be used by Vend’s retailers to accept chip cards, magstripe and contactless payments like Apple Pay within their POS systems.
So, what does Square’s partnership with Vend mean for the future of retail management?
An increase in instant purchasing
Such partnerships show that there is high demand for instant purchasing options. When you run out of your favorite food supplement, you can quickly order another one online and get it in a few hours. If you want to watch a movie, you can buy one online and instantly stream or download.
This is great for consumers since it simplifies their ordering process. They are able to do things faster and focus on their core businesses. For customers, it gives a potential increase in their productivity and savings in time and money that would have otherwise been needed to access physical stores.
On the other hand, it renders the traditional store obsolete. People will keep moving towards the easier and more convenient options. The traditional ones will have to keep in step with this. Many have already started giving options for instant, online orders, and faster deliveries.
Better delivery capabilities
Are retailers able to fulfill their shoppers’ expectations? They do their best, but it’s increasingly becoming hard to. Shoppers expect to get goods and services delivered fast and free. Cut-throat competition has led to many retailers offering free deliveries. This may not always be possible or sustainable since customers now want it done increasingly faster.
In future, more retailers are expected to begin charging for services such as home delivery. Click and collect will continue bridging the gap between offline and online retailing. For retailers to continue putting their customers first, there will be more such collaborations, like what Vend and Square have done to improve the quality of service and speed. The aim will be to collaborate with partners who share customer demographics, especially if the partners are not their direct competitors. This provides increased customer satisfaction while also increasing the profitability of both parties in the partnership.
Increased payment options
There is a huge rise in mobile payments. Many countries are being forced to move to EMV cards. These changes will force merchants to update their payment terminals. This will not only help retailers to have increased security and compliance, but will also enable them to increase their payment options.
Examples in this sector include PayPal, with their PayPal Here Card Reader. It’s compatible with Android and iOS devices and accepts both magnetic stripe and EMV cards. Mercury is another payment solution that gives retailers hardware that is needed to accept EMV cards and mobile payments.
The role of mobile in click-and-collect initiatives will increase. Traditionally, click-and-collect involves shopping online then picking items up in a store. Mobile is expected to play a bigger role.
Many retailers are trying out mobile as a way of facilitating click and collect. Kohl’s customers, for example, can buy via their smartphones then pick up the products in the retail store. Sam’s Club use mobile to send instant notifications when an order is ready to be picked up in-store. Nordstrom has a service that allows customers to call their associates when near a store. The employee then meets them outside and serves them right inside their car.
This shows that the use of mobile for payment and convenience will continue to increase.
Better purchasing options
There are many types of products right now that can be purchased automatically. This trend is expected to increase.
An example of automatic purchasing includes Amazon’s Dash button which makes it possible to re-order with just the click of a button. New Whirlpool washing machines can also automatically order a specific quantity of washing detergent after a certain number of cycles. In fast moving consumer goods, this will significantly push sales that are non-store based.
Subscription-based purchasing is also set to increase. This also heavily undermines the primary use of a store as the main purchase point. Nowadays, there is subscription-based purchasing in different industries such as music, video, groceries and even restaurant meals. This is done by companies such as Netflix, Spotify, and Blue Apron among others.
The shopping environment is moving in an entirely new direction that has not been witnessed by other generations. This is where shopping is not a discreet activity that takes place at a certain place in a certain time. It is instead an ambient activity that is being done everywhere. You can shop on the go; in leisure, at work or even at home. The steps from the occurrence of a need, shopping and consumption are now much more integrated.
As we move towards more of a digital economy, there will be little need for stores as we know them. The retail system will keep changing towards this new reality. And we’ll see more great partnerships such as Vend’s partnership with Square.
Rotem Gal is VP of Marketing at Inbound Junction