OAKBROOK TERRACE, Ill. --As retailers climb the technology curve moving into 2016, several potentially pivotal developments went down in 2015 that may alter the path ahead.
Like droplets from an incoming storm, these five events both hint at what’s ahead and confirm the onset of a larger downpour that will undoubtedly deluge the industry.
1. EMV. The liability shift for credit-card fraud to merchants without Europay MasterCard Visa (EMV) terminals in their stores passed on Oct. 1, 2015. The credit-card companies’ decision forced retailers to invest millions in new equipment and suppliers to rebuild and deploy entirely new product lines. Such was the case for San Jose, Calif.-based Verifone which introduced its new Commander site controller.
“EMV and PCI [Payment Card Industry] efforts will continue to suck up resources from both vendors and merchants that might have otherwise been used to explore other technologies,” said Phil Schwartz, manager of information systems, Valero Payment Services Co., Antonio, Texas.
That said, Schwartz told CSP Daily News that EMV will probably speed up another impending trend: mobile payment. New EMV terminals also have near-field communication (NFC) capabilities, which facilitates several mobile-wallet platforms, and secondly, the EMV transaction is longer than mag stripe and may convince consumers to try mobile payment.
2. Plenti. American Express introduced a coalition-style rewards program involving retailers as diverse as ExxonMobil, Rite Aid, Enterprise car rental and Hulu. The Plenti rewards program started in May and in six months signed up 30 million users.
For Pat Lewis, CEO of the coalition-based loyalty firm KickBack RewardsSystems, Twin Falls, Idaho, the move was a validation of KickBack’s core model. Further validation comes from Houston-based Shell, which is seeking partners to do a similar program, Lewis told CSP Daily News.
“There will be room for more than one coalition because most programs have a level of exclusivity,” Lewis said. “Consumers can choose what best fits their lifestyle.”
3. Amazon Fresh rollout.The Seattle-based web retailer expanded on its Prime Fresh grocery delivery service in test cities including Seattle, Los Angeles, San Francisco, New York and Philadelphia. Amazon reportedly tweaked its pricing strategy, having struggled to hold down delivery costs while keeping to what consumers are willing to pay.
While other online service and grocery chains have gotten into the delivery business, Amazon’s highly publicized determination continues to reshape the definition of convenience.
The c-store industry itself has been toying with the idea of home-delivery with notable efforts being Ankeny, Iowa-based Casey’s General Stores and its online ordering and pizza delivery program, as well as Dallas-based 7-Eleven and its partnership with Palo Alto, Calif.-based DoorDash.
4. Samsung Pay.The launch this fall of Seoul, South Korea-based Samsung’s mobile-payment option, Samsung Pay, rivals the efforts of Cupertino, Calif.-based Apple and Mountain View, Calif.-based Google, further stirring the heat around digital transactions.
“Mobile payment has not yet achieved critical mass, but it is accelerating toward that event,” Schwartz said. “We are seeing a significant broadening of the number of consumers who have the opportunity to use their phone for brick-and-mortar transactions.” Schwartz said that payment is just one part of the mobile solution, with successful merchants tying in loyalty points, rewards and discounts.
5. Driverless cars.Seoul, South Korea-based Kia is the latest company testing driverless cars in Nevada, a state that allowed testing as of 2012. Google and Ingolstadt, Germany-based Audi are two other companies already testing automated vehicles.
In a new report, the University of Michigan Transportation Institute, Ann Arbor, Mich., calculates that in an age of driverless cars, traffic counts will rise 11%, as a younger generation that’s indifferent to driving and more of the elderly take to the road. The study found that the number of 18-to-19-year-olds with driver’s licenses dropped 18% over 30 years to 66% in 2013. Disabilities and visual and medical problems were another big reason people don’t drive, a barrier that evaporates with driverless cars.
For a look at technology themes set to dominate in 2016, watch for the January issue of CSP magazine.
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