CARTES Keynote: PayPal’s Gauthier on Omnichannel Opportunity (May 14, 2014)
Beset by changing consumer habits and the rise of online shopping behemoths like Amazon, brick-and-mortar retail is at a crossroads, according to Patrick Gauthier, PayPal’s head of emerging services. Delivering a keynote address Tuesday morning at the CARTES Secure Connexions America conference in Las Vegas, Gauthier stressed that it’s never been more important for merchants to find out what matters to consumers and figure out how to fulfill those needs. Fortunately for retailers, mobile-driven omnichannel commerce provides a valuable tool with which to fundamentally reshape the in-store shopping experience and communicate more effectively with consumers.
The arrival of widespread mobile penetration “has profoundly changed both consumers’ and retailers’ view of how they interact,” Gauthier said. A significant percentage of consumers now use mobile for some or all aspects of the shopping experience—from browsing for items, to comparing prices, to actually making the purchase at the POS, he noted. “Mobile has become central to the experience of buying and, therefore, to the business of selling.”
One particular benefit mobile offers brick-and-mortar retailers is reducing reliance on checkout aisles, said Gauthier. “For retailers, a checkout lane is an unproductive asset. It’s dead space. It’s [employees], it’s capital equipment—and it’s not exactly the highlight of the shopping experience for most shoppers.” Shrinking the portion of a store devoted to checkout space—even by a small amount—can make a major difference. Gauthier explained that during PayPal’s in-store payment discussions with Home Depot, the retail giant said removing just one checkout lane in every one of its U.S. stores would result in a $50 million annual boost to the company’s bottom line.
But perhaps the most important asset mobile offers retailers is the ability to recognize each customer as an individual, using past buying and browsing habits to deliver targeted offers and other messages. Such personalized communication is a powerful way to increase customer engagement, but mobile’s app-based nature does present some difficulties in this area, Gauthier cautioned. Nearly all of the previous developments that have digitized commerce over the past 15 years have relied on Internet browsers, cookies, secure sockets layer and the like—allowing for easy identification of a particular customer. But apps don’t use a browser or accept cookies, making it harder to identify a particular shopper. And there are the usual privacy concerns. “Recognizing a shopper as a person is a very hard problem,” Gauthier said. It’s essential to make commerce personal, he noted, but you have to be careful of privacy, data and interoperability issues across providers.
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