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May 25, 2017
New wearable technology represents the POS frontline
What do you think? Will the increase in popularity for mobile payments help drive adoption of wearables by shoppers?
You’re probably accustomed to wearable devices that keep tabs on steps climbed, or emails and messages received. In the retail space, however, wearables are reinventing the point of sale – and the industry will be forever different for them.
Due to mobile payment trends, merchants and consumers already have seen the line-busting benefits of POS solutions that use tablets carried by sales assistants. If you’ve been to a theme park, you may have seen how easily a bracelet or other connected device can allow customers to pay without rummaging through handbags, pockets or wallets. What if merchants had the power of wearables on their side?
It’s only a matter of time before wearable technology devices become a regular part of ecommerce. In fact, as wearable technology grows in acceptance and importance to consumers, innovative retailers have already begun to rollout technology that enhances their omnichannel customer experience. The goal is to drive more closed sales and increase payment share, and it should be on the minds of all retailers as they prepare for the next step in customer expectations.
Adoption of wearables by consumers is opening up new and innovative ways for retailers to improve customer experience among key consumer groups. The potential of the smartwatch has opened up a new spectrum of applications, which directly impacts retail – starting with payment.
Envision an environment where a customer can walk into a store, pick up what they want and simply walk out, without the need for checking out. This may result in a future hands-free shopping experience in which the entire journey – from browse to buy – is completed through a wearable device. The time savings could eventually create an expectation that anything from boarding a plane to buying a cup of coffee should be done with, at most, a tap of a wrist. Consequently, we are not far from a time when, if a customer’s favorite wearable app is not available, the corresponding experience will seem like an inconvenience.
Looking a little further ahead in the world of mobile pay, augmented reality applications can help retailers through technology like Google Glass or Sony Smart Eyeglass. The fundamental idea is to superimpose computer generated graphics over the consumer’s environment by using the camera function. It manipulates reality to give consumers a virtual “hands-on approach” to shopping.
Merchants can leverage location-based marketing services on wearable devices by using geo-fencing and beaconing technology to facilitate customer engagement. Visual advertising could evolve from static to personalized messaging, aimed at drawing higher amounts of foot traffic into retail stores. By personalizing marketing messaging – enhanced through visual trigger or targeted offers and coupons based on the data obtained from consumer wearable devices – the likelihood of a purchase increases.
The simplest application of real-time marketing will likely be to notify customers of ongoing relevant promotions as they walk near or into a store. But dynamic messaging could begin to utilize available data such as customer location within the store, products in line-of-sight, etc., to display customized messages and offers to shoppers. Geo-fencing is mainly concerned with externally creating a demand and bringing consumers in. Integrating location-aware marketing mediums with CRM platforms helps deliver highly targeted contextual messages to users at precisely the right time.
Retailers are also experimenting with technology that allows them to determine customers’ profile information or purchase history by synchronizing with their wearable gadgets, then displaying customized messages based on their vicinity to visual displays. Wearables also open up a new frontier for valuable data collection that retailers can use for continuous customer service improvements.
Exploiting line-of-sight wearable glasses could create the opportunity for retailers to provide customers with an improved visual experience in-store. Some potential initial applications are highlighting on-sale or popular products, or providing navigation capabilities for customers looking for a product within a store. This could be augmented by the wearable’s knowledge of the customer’s behavior, highlighting articles that are particularly suited to the wearer based on his or her interests and lifestyle.
Customers love to be engaged, but engaging customers isn’t what it used to be. Beyond delivering great service, merchants can now deliver dynamic retail experiences unlike they have in the past. Further ahead, by using virtual reality technology, retailers can offer customers a genuinely out-of-this-world experience.
The ubiquity of smartphones and endorsement by popular retailers’ use of mobile-payment-ready POS devices in stores has created strong momentum. Consumers who see the benefits of an all-digital wallet may be more prone to adopting wearables.
Within the next few of years, the adoption of wearables could increase drastically. This will be accelerated as more mobile-payment technology is integrated, thus moving wearable devices from simple smartphone extensions to their own importance. As a technology software provider, we cannot help but wonder at all the possibilities that could become reality as wearables are embraced by the masses. The potential to transform retail marketplaces becomes truly exciting.
Vice President of Product Strategy
Dan is a member of FIS’s Payments Product Strategy team and focuses on developing the long-term strategy for U.S. retail payment products. His background spans 19 years in financial services leading co-brand credit card programs in the retail, travel and loyalty sectors, as well as issuer-branded consumer and business card programs.
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