Retailer/Customer Relationships: What Retail 2012 Can Learn From Retail 1912

3 Online Payment Players
For all of this advancement, the application of technology to make the shopping process both efficient and the consumer/merchant relationship more personal still seems elusive. Three players, none of whom are either a traditional retailer or payment firm, are now working to change all of that.

1. PayPal. PayPal’s portfolio of capabilities is designed to streamline the shopping experience for consumers and merchants alike. Its geo-targeted application serves offers via the phone from merchants when consumers are in striking distance. Other apps such as Milo and RedLaser enable inventory checks and pricing information by scanning a product code inside or outside of a store. Others provide product reviews and other relevant information before a purchase is made.

In-store checkout will leverage the more than 60 million active U.S. PayPal accounts. What’s more, it can be done without a card by simply typing in a phone number and PIN at the POS, leveraging devices that merchants already have. PayPal is perhaps the most powerful force today in blurring the online and offline commerce worlds. It will no doubt use these assets and others to enable merchants and consumers to have a more personal — not just more efficient — relationship.

2. Square. This app has evolved over the last year beyond a micromerchant processor into a consumer and merchant network. Square’s Card Case customers, who opt in, have their faces and shopping histories visible on tablets that operate Square’s register application, enabling that merchant to better serve that customer when they enter their store. Purchases are made “on account” without producing any card or identification since authentication happens via visual identification.

Also, digital receipts promote other Square merchants in the area, helping drive traffic to their storefronts. Square’s “cardless checkout” has less to do with shopping efficiency and more to do with enabling a better experience in-store for consumers and a deeper relationship with that merchant. Square’s road map no doubt includes capabilities for merchants and consumers to both broaden and deepen those relationships.

3. Google Wallet. By comparison, Google Wallet seems a bit out of sync with the other players. It leverages the powerful Google ad platform that technically makes it easier for merchants to reach consumers with offers. Its economic proposition makes it attractive for merchants to play along too. But its value proposition to consumers is wrapped around a mobile wallet technology that only works on certain phones and with certain merchants that can interact with its technology and those phones.

Its wallet is open, so the technology can accommodate a variety of cards, but it still requires the phone to be used at checkout to complete a purchase. Google Wallet uses the power of the web to drive traffic to storefronts, but it’s focused almost entirely on a consumer and merchant value proposition wrapped around ease of checkout. While claims of “customer delight” ground its mobile shopping proposition, at least for now, the experience seems to fall way short of either making the shopping experience more efficient or making the consumer/merchant relationship more personal.

What PayPal, Square, Google Wallet and many others who are trying to reinvent the retail experience must bear in mind is that from a shopping experience the Mary of 2012 isn’t much different from the Mary of 1912. What is different is the set of tools that consumers and merchants have at their disposal to make that experience a cost effective and relevant reality. But tools that create efficiencies alone aren’t enough; they also have to drive a personal relationship between consumers and merchants. Ironically, it will be the IP-enabled revolution that started roughly six years ago that will move consumers closer to the experience that defined retail more than a century ago and that will fuel its reinvention for the next 100 years.

Karen Webster is president of management consulting firm Market Platform Dynamics. Reach Karen at karen.webster@marketplatforms.com.