The Logic Group Blog

Blog: Ubiquitous NFC

2013-04-18T11:51:08.696+01:00

You may have seen our post last year on Apple snubbing NFC (near field communications) technology in its iPhone 5. This year, reports suggest that Apple is including NFC capabilities in its new iPhone design. This further fuels the speculation it will add payments to its Passbook allowing customers to pay, receive offers and collect loyalty points through their mobile device.

The Integrated Retailer recently published an article suggesting NFC-enabled mobile devices will exceed 500 million by the end of next year. It seems the retail industry and its ancillary services are looking at NFC as a serious game changer in customer interactions, from point of sale, up and cross selling, providing customer offers and collecting insightful customer data.

We recently announced our partnership with Proxama to provide in-store coupons and vouchers via NFC-enabled posters that consumers can tap their phone to and redeem at the checkout. The partnership also allows us to create NFC enabled retailer apps that send offers directly to customer devices that are in range and have the store’s app installed. These services can be integrated into a mobile wallet to provide a holistic approach to customer interactions through one device.

The challenge for retailers now is to break down the risk perception consumers have towards NFC technology and using mobile wallets. However, we can see that this is the case throughout history, the most recent being chip and PIN services replacing signatures in payment card transactions, or online banking. People may think it is less secure or more risky than the legacy method, but once it is adopted these worries are forgotten.

The retail industry as a whole must now work to educate consumers about the simplicity of using NFC technology and mobile wallets to dispel any misconceptions customers may have on data security, privacy or ‘spamming’. By illustrating that a mobile wallet will be kept as safe as loyalty card data, online banking data and that offers will be tailored to the customer or be ‘opt-in’, we may alleviate some of these worries and drive NFC adoption amongst end users.

RBTE: Mobile technologies at the heart of customer interaction

2013-03-20T11:16:06.856+00:00

Retail Technology Business Expo (RBTE) this year was jam packed as ever, if not more. The technology for retail industry turned out to showcase the importance of successful omnichannel strategies and the role of new technologies in extending retail presence beyond the store.

The easily noticeable presence of products and services based on new wireless and internet-based technologies signalled the importance of mobile solutions for the retail industry.

For us, it was all about taking it one step further in highlighting the benefits of the mobile wallet. The mobile wallet is a game changer, but it only scratches the surface of what mobile can offer. The focus is all too often around the benefits as a payments mechanism. We were able to demonstrate that for the true value of the wallet to be recognised, retailers needed to understand the customer interaction opportunities it creates through loyalty and real-time discounting.

Our partnership with Proxama creates a complete NFC-based services offering for our retail clients. We are also working with Weve, as one of its first technology providers, to help design and build its loyalty and coupon pilot.

Meanwhile, Jon Worley (our Director of Customer Interactions) and Nick Rudd from Weve secured a lot of interest around the mobile customer journey and the unchartered new world of mobile interactions between retailers and consumers (watch out for the webinar version coming soon).

The bottom line: Customer relationships built on meaningful and targeted interaction will drive growth in the retail industry. Mobile will be the cornerstone of omnichannel customer interaction strategies. When considering mobile wallet services, let’s think beyond payments – loyalty, data, and insights.

Tourists love the UK shopping experience - so should you!

2013-03-04T17:02:31.941+00:00

Despite the UK’s economic status, the country can glory in the fact it’s the world’s most sought-after destination for tourists looking to splash their hard-earned cash. A recent study by VisitBritain indicates that the UK is still luring overseas shoppers to come and spend in its stores. Of the 18 million overseas visitors to the UK, 300,000 tourists only came to Britain for one reason – SHOPPING!

VisitBritain estimates that overseas visitors spent as much £4.5bn a year in Britain’s shops, with more than half of the cash going on clothes. The report shows that 25% per cent of all expenditure by overseas visitors is on the UK’s high streets and in department stores.

This research shows that the UK is one of the top shopping destinations to deliver the most rewarding and enjoyable shopping experiences. To take advantage of this, retailers need to maintain this superior experience and make sure it is also felt by UK shoppers, in order to cement the future of the high street.

At RBTE (stand 520), we’ll be showcasing how retailers can achieve the ultimate shopping experience by placing them in their customers’ shoes. By combining payment, loyalty and reward services across multiple integrated channels, participants will take part in an online experience and understand how they can use their buying journey to get customers retuning over and over again.

To put yourself in the customers’ shoes, register here.

The price of promiscuity

2013-02-26T12:00:30.683+00:00

The Promiscuous Consumer

In this era of consumer fiscal austerity, customer retention and the encouragement of customer loyalty are two essentials in the survival tool kit for every company. One barrier to achieving this are those ‘promiscuous consumers’ who display no obvious loyalty to a store, instead choosing to shop around for the best bargains and, quite often, holding multiple loyalty scheme memberships. Assuming they are going to be profitable, can you tie them into the commitment of a (more) monogamous relationship with your company? The promiscuous customer is most likely to threaten shops and sectors in which loyalty is easily exchanged and in which innumerable confounding variables could explain why someone decides to switch their loyalty, if, indeed, it can be described as ‘loyalty’, elsewhere.

Customer Loyalty Research

Overall, market research has shown that feelings of loyalty have remained fairly stable over the past four years (2009-2012) . Some demographics have, though, been found to be consistently more loyal than others. From supermarkets to cinemas via mobile phone handset manufacturers, women are more likely to say that they feel loyal across the majority of sectors asked about. The only two sectors in which men currently lead the way in loyalty are sports, and bars, pubs and clubs: read into that what you will.

What makes consumers feel loyal?

During the four years that this survey has been running, members of schemes are more likely to be loyal to companies across all sectors; so, certainly, there could be something to be gained by luring in more members to schemes. What our research also shows is that consumers feel loyal for a variety of reasons, of which loyalty scheme membership is only one. Likewise, consumers join schemes for many reasons, of which, again, loyalty is only one, and our promiscuous, opportunistic consumers could be being won over by any one of a number of things. Membership of two flagship schemes in the UK illustrates this perfectly. 2011 data shows that an astonishing 56% of consumers hold both a Tesco Club card and a Nectar card, whilst only 9% have a Tesco Club card alone and 6% a Nectar card alone. This suggests that membership of these schemes at least is underwritten by something other than pure ‘loyalty.’

Improving satisfaction

This leads us into a conundrum: should winning over these promiscuous consumers be the top priority, or should improving satisfaction with loyalty schemes amongst loyal customers take precedent? Undoubtedly, if it were possible to leverage the loyalty schemes in order to convince both parties of the benefits of a long-term relationship with just one store, the gains could be massive. But results from our survey suggest that most schemes still have some way to go before this ideal can be achieved.

In addition, from our survey, it appears as though satisfaction with loyalty schemes is not dependent on whether customers consider themselves to be loyal customers, suggesting that they are not always receiving any additional rewards for their enduring loyalty. Perhaps it is time to be thinking of ways to encourage spending amongst loyal customers, renewing their vows, through more attractive schemes, lest they too become a promiscuous consumer.

Rewarding loyalty

It could be, therefore, that the only way to put an end to, or at least limit, customer promiscuity is not to directly try to appeal to promiscuous consumers with glitzy new loyalty schemes but rather to reward those who are displaying loyalty and, indirectly, show them that, in the long run, promiscuity does not pay.

Is this the future - high street to iStreet?

2013-02-20T17:44:06.146+00:00

It’s unimaginable to envisage a supermarket with no customers, no check outs – manned or unmanned, gondola ends with tons of offers, and even the smell of freshly baked bread. But actually, Tesco has five and walk-in customers aren’t welcome. They’re not on the high street or even on retail parks. That’s because they are ‘dark stores’. They exist to serve the ever-growing needs for online shopping.

It’s ironic really: Tesco opened its latest ‘dark store’ in January and it created 700 jobs. In contrast, BlockBuster and HMV were slow to respond to the fast moving Internet-enabled business model, leading them into the red.

Technology has rapidly changed the high street – although high rents and the changes in consumer behaviour have not helped. Some of this is down to the phenomenon dubbed ‘showrooming’, when people use their phones while out shopping to examine whether their prospective purchases are available cheaper online or elsewhere.

A recent survey found that four out of ten ‘showroomers’ end up making their purchases elsewhere. Indeed, one in five people said they only went into a shop to ‘check out’ something they planned to buy online. Yet, some consumers still value what the high street can offer – the chance to inspect what they’re thinking of buying.

Various market research studies indicate that on average four of ten ‘showroomers’ end up making their purchases elsewhere – with some consumers even admitting that they only go in-store to ‘check-out’ things they planned to buy online. There is an argument that consumers still value the high street – even if to inspect goods that they may eventually purchase online.

However, reflecting directly on the high street itself, technology can strengthen retention and sales. Firstly, being able to visualise and feel products is a big tick mark for the consumers. Retailers can capitalise on this and offer real-time discounts and incentives – increasing the likelihood of completing a purchase. John Lewis, for example, offers free Wi-Fi to customers' in-store, which allows the retailer to match and improve offers as well as provide complimentary products or services using its multichannel infrastructure. John Lewis encourages consumers to do what most of us already do, go into the store, then look online to check if you can get it cheaper or with an offer.

Secondly, data is a key benefit for high street retailers. The more you know about your customers, the better they can be targeted with promotions and offers, giving you better ROI. Take voucher sites for example. Various websites today offer coupons and money back to an anonymous customer, making it difficult to tie that back to the person who redeems it. Alternatively, if this is issued through a mobile, it is unique to that handset, so you know the demographics of who is using the voucher, their location and when they use it. Retailers can instantly know if the unique voucher code has been used or not, and by who. Access to such customer buying behaviour data gives the retailer much better control over its marketing budget. But it’s not simply the data they collect on consumers – it’s also the data they can provide to their customers for future tailored deals.

High streets need to make available the tools consumers desire to interact in-store. This will allow the consumer to not only browse in-store, it will also encourage them to complete their purchase and take their shopping away with them.

The Dynamics of Customer Service and Loyalty for Hoteliers

2013-02-18T10:02:07.48+00:00

A recent study by Deloitte found that in the hotel industry travellers’ purchasing decisions are being driven by having the best deal, with roughly 30% of hotel loyalty scheme members being “at risk” of switching their preferred brand for a better offer. This seems to be the case with an average of 50% of holiday makers’ annual hotel not being with their preferred brand.

This doesn’t come as a surprise when consumers are tightening their purse strings, as disposable incomes come under more pressure. As a result, hotels have been forced to consider discounting, couponing and throwing in freebies (four nights for the price of three, for instance) to retain and attract business. However, as seen in the retail industry, discounting is not a sustainable practice – and the hospitality industry also needs to explore long-term customer interaction strategies based on actionable insights.

The Logic Group’s Loyalty Survey 2012, conducted by Ipsos MORI, found that just over 10% of British consumers were members of a hotel loyalty scheme, and as such feelings of loyalty towards hotels ranked the lowest amongst the 19 sectors polled.

The good news is that the only way is up for the hospitality industry. Consumers prioritised honesty & integrity and customer service as the top two criteria when judging the reputation of the business. This represents a great opportunity for hoteliers to grow their business and differentiate themselves in the market by offering tailored benefits to loyal customers.

Instead of creating a ‘one size fits all’ scheme, for example ‘stay four times and get your fifth stay free’, hoteliers should be looking at offering their customers something they will personally value, based on their behaviours. If a guest stays once a year they could have a ‘complimentary champagne breakfast on your birthday’ deal, whereas more frequent customers could have a ‘complimentary room upgrade on your third stay’. This will make customers feel understood and valued, a customer service aspect that is very important in the hotel industry.

The ability to capture, combine and analyse customer interaction data to deliver personalised, value-add engagement to customers will drive and distinguish successful hoteliers.

What makes you fall in love?

2013-02-14T10:18:59.216+00:00

At this time of year Valentine ’s Day is surrounding us all. But it’s not just on 14th February that you want your customers to love your business. Customers who positively value your business are more likely to spend more and return to you more regularly (Loyalty Report 2012) adding value back into your business. So, understanding what makes that happen is crucial to growth.

Is Loyalty important?

Some consider loyalty as being part of a scheme; but just because you are a member of a loyalty scheme doesn’t mean you are satisfied. So what does it take to ‘fall in love’? The Logic Group and Ipsos MORI carry out an annual Loyalty Report, and in 2012 the results showed that the most important areas that affect satisfaction with a loyalty scheme specifically are Points (27%), Rewards (22%), Vouchers (18%), Discounts (16%), Convenience (15%), Freebies (15%), Price (11%), Products (11%), Service (10%) and Offers (9%). Consider these areas and your loyalty scheme members should be more satisfied. But does this also reflect upon those customers that are not members of the scheme?

Is it more about service?

As we see above, service was 9th of the list of reasons for satisfaction with a scheme (10%). However, when asked for reasons for dissatisfaction, consumers cited service far higher on the list, with only a 5% difference from the number one reason; rewards. Furthermore, when looking at this in more detail, addicts of loyalty schemes; those people really in love (top 10% who have the most schemes), put even more emphasis on service as a reason to be dissatisfied than the average respondent; 16% versus 10%. This suggests that service should be considered an important part of your business, especially as it can impact loyal customers the most; the customers you really don’t want to lose!

Do you provide value?

Value, in terms of points and rewards, is considered highly important for members of a scheme when measuring satisfaction, but it’s not just consumers that are members of schemes who are looking for value for money. So, delivering value is subjective. The answer could be in targeting, and that can be achieved through data, and turning that into knowledge that drives your campaigns, offers, and promotions to grow your business, and make your customers feel like they want to return time and time again.

In a nutshell, falling in love isn’t based on one thing, you need to provide value, good service, and remember that your customers are individual.

As a business that provides products and services, we recognise the importance of delivering what our Clients require, and therefore we always welcome your feedback about how that can be improved. To that end we have launched an annual client satisfaction survey to gather your feedback. If you are a client of The Logic Group, and have not received your copy by 20th February, get in touch and we can make sure you can have your say.

In the meantime, find out more in the 2012 Customer Loyalty report.

British Retail: What’s all the fuss about?!

2013-01-24T13:30:01.503+00:00

December retail sales have disappointed.
British music industry loses the high street presence of HMV.
Another few bite the dust.
Britain gets a chilly welcome to 2013.

If you still need more evidence that the Internet has necessitated a rethink of customer engagement strategies, then you may as well shut shop and protect the few assets and cash-in-hand available to you. The onset of the Great Reinvention (as we’d like to refer to the economic depression that started in 2008), marked the beginnings of the evolutionary process that would be driven by the Internet and the shift to online business and shopping. To feign ignorance to the fact that we’re through the evolution phase (of four years) and are now stood at the chasm, would demonstrate poor judgement and a clear lack of understanding of the stark reality that faces us.

The jump across the chasm will require a rethink of customer interaction and engagement strategies – and, an in-depth understanding of how consumers think, shop around and buy.

Blockbuster, Jessops, Morrisons and Comet have taught us that speed and agility are important considerations when adopting a multichannel retail strategy. For those who’d like to argue that online shopping reduces the lucrative profit margins (that retailers have enjoyed in-store), should be inspired by the 44% y-o-y growth in web sales at John Lewis – a major contribution to the 13% growth in revenues in December 2012.

British high streets will get a face lift in 2013. An experiential high street will start to emerge – one that caters to niche brands and customers and provides a face to virtual shopping experience. Brick-and-mortar shops will adopt a lean presence as they rapidly embrace a multichannel environment. Online only retailers will bring pop-up shops and digital windows to the high street – using tools such as augmented reality, QR codes and mobile apps to bring in customers. eBay has already put this into practice by testing pop-up shops in 2012.

This experiential high street, with its multichannel infrastructure, will be driven by actionable insights – the ability to capture, combine and analyse customer interaction data to deliver personalised, value-add engagement to customers.

So, if you haven’t already, it’s time to embrace the Great Reinvention.

Sunny and Disruptive: Outlook for Retail Industry in 2013

2012-12-24T10:06:02.419+00:00

2012 has been a tough year for the high street, with retailers struggling to drive sales and many high street stores shutting their doors permanently. By contrast, the online high street saw resilient growth. In fact, the latest figures of the annual IMRG e-Retail Sales Index have revealed that online sales in November are up 18 per cent from last year, as the festive rush has encouraged consumers to reach into their digital pockets. So, 2012 was a year of “Bricks vs. Clicks”, but what will drive retail in 2013?

Here are some of my thoughts for starters, or perhaps predictions for 2013:

Mobile

The choice of payment methods that retailers can offer to consumers seems to be constantly evolving and it’s often ‘make or break’ in a purchase decision. As devices and network speeds improve and more brands take on a mobile-first approach, m-commerce will continue to accelerate and build momentum in 2013.

Alongside the growth of mobile transactions, NFC and contactless payment methods are set to dramatically change how people pay for products and services. However, with slow consumer adoption, pay by reference and cloud based payments (e.g. PayPal and Starbucks) are seen as the disruptive forces in the future market. It seems inevitable though that being able to accept mobile payments online or in-store will be invaluable for merchants of all sizes in the coming years.

Mobile Wallet

The digital or mobile wallet will offer more than just another payment option. Focusing on the mobile wallet from a pure payments perspective massively undervalues the impact mobiles can have. It could be said that tapping a phone is as useful as tapping a card, and as such, there’s no real benefit to the customer. Thus, in 2013 payments will finally merge with loyalty and rewards. These three separate businesses will converge to make it easy for consumers and merchants to automatically leverage appropriate coupons and offers.

Consumer data

Loyalty schemes and purchasing habits are two sides of the same coin when looked at from a data perspective. If approached correctly, this data can be incredibly valuable for brands in 2013, not just to build relationships with consumers but to drive sales.

Loyalty schemes such as Tesco Clubcard, Nectar and Superdrug Beautycard are heading towards the point where they can connect up their huge data repositories with smartphones, in-store WiFi, geo-location data, mobile coupons and purchase technology.

This kind of inter-connected data, and the pre-requisite opt-in from consumers, means brands can target shoppers with personalised offers based on their own purchase behaviour. 2013 will see this sort of data turn consumers into fans and drive sales.

Multichannel – in reverse

Online only retailers such as Asos, Amazon and eBay are still very much the darlings of the e-retail world, and have in the past cast doubts on the future of the high street. Most high street retailers would do anything for the kind of growth reported by the likes of Asos, but the shift to multichannel by the high street means that online only retailers are now missing a key element, a high street presence.

2013 will see multichannel in reverse where online only retailers will bring pop up shops and digital windows to the high street – using tools such as augmented reality, QR codes and mobile apps to bring in customers. eBay has already put this into practice by testing pop up shops earlier this year.

On the whole, 2012 has been a tough year for the world of retail. In 2013, we will see some significant disruptions in the retail sector, and here at The Logic Group we are looking forward to playing an integral role by solving real problems for merchants, retailers, marketers and consumers.

Wallet Services Move to Gain Consumer Trust

2012-12-21T09:50:05.081+00:00

There has been a lot of momentum behind mobile payments, NFC-enabled PoS terminals and wallet services in 2012. Technology providers, retailers and merchants, as well as payment service providers are now quite openly supporting the case for multichannel customer experience management. Consumers too have shown some appetite for mobile payments and NFC-enabled cards, although they appear to have even bigger willingness to shop online. However, for consumers to readily adopt and widely embrace the new technology-enabled payment and interaction experience, the retailer, merchant, technology and payment provider ecosystem needs to understand consumer expectations from multichannel customer interaction systems and instil the confidence to trust new payment technologies to protect their identity credentials in any environment.

Earlier this week MasterCard took a step in the direction of building that confidence and trust for the consumer. The Logic Group and nine other leading payment service providers have committed to MasterCard’s PayPass Online Wallet Services – allowing them to securely accept electronic payments across multiple channels, no matter what device is used to make the online purchase – desktop, laptop, smartphone or tablet. The online and mobile commerce market will likely make up 45% of UK retailer total revenue by 2014. The MasterCard PayPass Wallet Service is leading the charge in making the mobile phone just one of the accessories in the multichannel ecosystem. PayPass as a platform (unlike a product offer) will cut across the multiple channels, devices and PoS terminals, as well as operating systems – liberating the customer interaction experience in the true sense.

As consumer confidence builds in 2013, the PayPass platform has the potential to become an integrated service that not only allows you to make secure payments, but also the one virtual wallet that contains your credit, card, debit card, loyalty schemes, discount coupons and vouchers, and air miles – all in one place. Safe, easy to use and hassle-free for the consumer. Rewarding for the retailers and payment service providers by helping them retain and grow their loyal customers.

At The Logic Group, we’re all excited about the potential of wallet services in 2013, and look forward to extending our relationships within the multichannel ecosystem.