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Surviving post-pandemic retail challenges with subscription models

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By John Phillips, General Manager, EMEA at Zuora

Whilst many organisations are feeling the economic effects of the global pandemic, subscription-based businesses are proving to be resilient. In fact, a recent report found that more than half of subscription businesses have not been impacted by the pandemic, while one quarter are actually seeing subscriber acquisition rates accelerate.

So, what can the traditional retail industry, especially those in Consumer-Packaged Goods (CPG), learn from the strength shown by subscription services?

During the pandemic, in order to follow government guidelines and ‘stay at home’, many consumers took to ordering a variety of products – including groceries and home staples – online, signing up to subscription models they potentially hadn’t thought about before. But, as things return to some semblance of normality, in order to continue to drive this growth and build loyalty within their customer-base, CPG  businesses need to focus on forming direct relationships with their customers.

The strength of subscriptions in 2020 has proven that forming direct relationships with customers and focusing on adding long-term value over short-term revenue is going to be key for retails in surviving the impending recession.

COVID-19: The catalyst for shifting consumer attitudes

Subscription box retailers have enjoyed steady growth in recent years, with 27.4% of Brits signed up to subscription box services as of February 2019, according to Royal Mail Group research. At the time, the UK subscription box market was forecast to reach £1 billion in value by 2022, a 72% increase from its value in 2017. Many early entrance to the retail subscription market are reaping the rewards, including Hello Fresh, Graze and Nespresso.

While the COVID-19 pandemic affected brick and mortar sales, subscriptions enjoyed a fruitful period as millions were stuck at home. In July, new Royal Mail research showed 15% of adults had ordered a paid subscription box online since lockdown began.

Some subscription services were able to turn adversity into opportunity by listening to customers and their changing needs during the pandemic. This compassionate approach is in turn leading to increased loyalty and overall growth. A good example of this can be seen from the restaurant reservation platform Resy. During COVID-19, Resy was committed to providing 100% relief on all fees and billing until the end of June. Since then, they’ve seen customer subscriptions spike. The adaptability offered by subscription-based models is proving to be a lifeline for many retail organisations battling the current period of uncertainty.

The future of CPG is in subscriptions

According to our CPG Subscription Report, 61% of UK consumers who have a CPG subscription have one with a food and beverage organisation, followed by electronics (33%), pharma and beauty (33%) and fashion (31%). This demand is only set to increase as time goes by, with consumers who have a CPG subscription being 2x more likely to get another in the next 3 years.

COVID-19 has provided all industries with an opportunity to re-think the norm, and the same goes for retail. Shifting to a service model via subscriptions will not only help organisations to bounce back following the global pandemic, but it could boost the profitability further down the line.

In the past, CPG brands could let retailers worry about the customer experience; they only had to provide the products. Now, in a direct-to-consumer reality, brands need to forge relationships based on customer experiences they themselves have created if they want to succeed. Creating a seamless and positive experience has never been more important to ensure stability moving forward.

The three C‘s for success – convenience, customisation and customer satisfaction

In an uncertain economy, many consumers re-evaluating where they spend their hard-earned money.  This makes it more important than ever for brands to prioritise customer satisfaction to drive loyalty and reduce churn rates. So, what makes customers stay?

According to the same CPG report, customers value flexibility, convenience and customisation above all, citing saving time (51%) and ease of opting out (48%) as key factors in making a decision about subscribing to a CPG brand.

In terms of delivering this overall customer experience, flexibility is high on the agenda for those signing up to a subscription-based service.  Fear of being bound to a company or service is enough to put 42% of consumers off signing up in the first place. Therefore, companies that enable changes to their subscriptions are likely to see a positive impact on the bottom line. In fact, research from the Subscribed Institute recently discovered for companies where one in 10 subscriptions has a change after the initial sign-up, for example, this could be an upgrade, downgrade or add-on, the growth rate more than doubles to 20% YoY revenue growth.

Another key pillar for success is convenience. In order to meet consumer demands, the delivery mechanism for the subscription must be more convenient than traditional purchasing. It must take the pain out of tackling the high-street but still provide the retail experience at home for customers. There is a common thread that the most popular subscriptions will save time, deliver to the home or be something that the customer would struggle to get hold of under normal circumstances.

Customisation is the third piece of the customer satisfaction puzzle and is likely to be the defining factor which enables a subscription service to stand out from its competitors. Consumers have higher expectations for the relationship in a subscription model than they do with a single purchase and it’s important to meet these. Taking unique preferences into account is likely to enable businesses to build a better relationship with their customers, encouraging a longer commitment and lessening churn.

For CPG brands looking to fortify themselves long-term, adopting a subscription-based model is an avenue worth exploring. For those that do, focusing on adding value and improving the overall experience for customers will prove critical in building and retaining loyalty long term. If businesses are able to deliver the right blend of flexibility, convenience and customisation, subscriptions could prove to be a sustainable solution helping businesses to both survive this current time of uncertainty and thrive beyond the pandemic.

Ordo, reshaping payments with Open Banking, enabling low cost, real-time transactions across the UK

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By Ordo

In March, the World Health Organisation (WHO) proposed contactless payments as a countermeasure of COVID-19. The effect is the ever-faster rise of digital payments on web platforms and mobile apps. Digital and contactless payments have seen an increase in usage by more than 50%, and experts are claiming that these new forms of payments are here to stay.

Are you ready to switch for the best alternative in the market?

With the further lockdowns becoming more widespread and threatening everyone’s Christmas, we’re offering three tangible reasons to start using Ordo today. 

1. Saving 90% or more on each transaction: it’s true.

If you’re still using card payment processors, you are likely to be paying high fees: around 2-4%. That means that every time you make a sale of £200, you could be paying around £4 – £8 in transaction fees; that’s the cost of a lunch, every time you process a payment. Why not save all these lunches for yourself and your loved ones instead?

Using Open Banking technology (ed. it helps securely and safely move, manage and make more of your money), Ordo can process your payments at a fraction of the cost (20p as a single flat fee, no matter the amount). Learn more 

2. Real-time payments: it’s like cash, but safer.

With widespread concerns about delayed or cancelled orders, businesses are experiencing a high volume of cancelled transactions. Card return and chargeback volumes are starting to see significant jumps which can become a key concern for many companies. Ordo can help your company at no extra cost – when you receive payments through Ordo, they are irrevocable, it’s just like you’ve paid cash into your bank account, nobody can take them back again. Plus, all the Ordo payments will hit your bank account in real-time, as soon as your customer has paid, 24/7, no matter what.  As cashflow becomes tighter, every single payment will count even more, and Ordo could be the partner you were looking for.

3. Reconciling: stop wasting time!

A recent survey showed businesses spend nearly 10 hours per week on payments admin. Now more than ever that is time you need to spend on driving your business. With Ordo you include a reference with your payment request that means something to you and that will always appear on your bank statement with the payment, exactly as you entered it. This reference can also link back the payment to accounts software like Quickbooks, Sage, or Xero. Also with these accounting packages you need to spend even less time doing payments admin, as Ordo will create your payment requests directly from the customer and transaction information you’ve entered into your accounts, including the invoice. Learn more

The change is here: more payments security for you and your customers.

Even if you’ve avoided the costs of card payments, are you exposing yourself and your customers to fraud by just using stand-alone bank transfers?. Common scams emerging include impersonating as relevant authorities and financial institutions to demand payments from unsuspecting consumers, and fraudsters hacking into emails and changing account numbers on invoices to their own. Where you can’t be sure of the owner of the account you’re sending money to, the result is an increase in fraud – to the tune of £451m in 2019 alone, with £114 million of that being invoice frauds.  

With Ordo you are taking positive actions now while there’s still time to avoid the embarrassment, the damaging headlines, the explaining, the compensation and the rebuilding of your business, customer base and reputation you’ll need to do if you just hope that you and your customers will be lucky.  Ordo has been designed and built with privacy and security as part of its DNA. It protects all you and your customer’s data at all times using the latest security techniques and messages go across our own secure channels to and from banks. This means that the whole communication is secure and less vulnerable to hacking and fraud.

What about your customers: are they ready to switch?

We’ve all lost things in 2020, for some it’s been deeply personal, for others it’s been equally as dramatic in other ways finding their jobs gone, the loss of childcare and teaching has meant trying to do two full time jobs at the same time along with the pressure of re-learning algebra; support networks have gone virtual and our freedom has been curtailed with the need to remember your mask if you just want to pop to the shop, or the chore of booking in advance whether you want to go for a quick drink or a swim. 

The things that we once did freely have become complicated and everyone has some kind of trouble on their mind.

Ordo makes it easy and convenient for your customers to pay you, within just a few taps from their phones, all secured by their own bank. 

Your clients can tap and pay without the need to register, find paper bills, login to portals with memorable information they instantly forgot, or look up references to ensure payments get credited against their account with you. You make it as easy as possible for them to pay you meaning you are at the top of their to-do list. Learn more

How we could help you

Ordo is the payment solution you cannot afford to be without. We are regulated by the FCA (FRN 836070). Nationwide Building Society is an investor, and along with CGI and AND.Digital partners, it will make your billing and payments easier.

Its free to trial, for smaller businesses can be used independently and with QuickBooks, Sage or Xero. For larger businesses Ordo can be integrated with any systems with our simple suite of APIs and robotic automation tools.

You can learn more, book a demo or signup here.

www.OrdoHQ.com

The Hidden $20.3 Billion: The cost of disconnected payments

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By Checkout.com

How can your payments perform better? And what can you do to stop leaving money on the table? Checkout.com decided to find out.

In partnership with Oxford Economics, Checkout.com analyzed data from 5,000 consumers and 1,500 merchants to piece together this complex puzzle.

Black Boxes and Paradoxes: The True Cost of Disconnected Payments

Checkout.com’s exclusive report shines a light on the biggest untapped payments opportunities for companies today. It reveals what customers are willing to pay for more secure transactions and how fast-growing brands like Deliveroo and TransferWise, approach payments.

Report insights:

  • False declines cost merchants $20.3 billion last year, with $12.7 billion given away to competitors and $7.6 billion -written off
  • 60% of merchants don’t think that their payments data that they receive is robust enough to inform their business strategy nor their innovation
  • Super high growth (41%+ year on year) companies are more likely to have an authorization rate of 96-100% than other businesses

Who are Checkout.com?

Checkout.com’s flexible payments solutions help global enterprises — like Samsung and adidas — adapt, innovate and thrive with more value from every transaction flowing through your business. They’re on a mission to empower merchants by building the connected finance they deserve.

Download the report now to discover the hidden value of payments.

Chargebacks should be a crime

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By Utrust

Every year, businesses lose $40 billion in chargebacks. A lot of them are fraudulent, but the banks hold all the power. If business owners want protection, they have to pay for it. Every bank, every card, every contract, has different rules. And your business is in the crossfire. It’s one of the most anarchical and outdated practices in payments.

We have decided to fix this.

Utrust uses the power of the blockchain to completely cut out the middleman. You deal directly with your customers, and all sales are final. No chargebacks. Period.

Simple as it should be.

Reach out to us by clicking here.

How to provide the best customer service when couriers are delayed

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By Starshipit

The beauty of online shopping is that a customer can buy almost anything they want without getting out of bed.

But when couriers are delayed (frequently during high-demand periods), customers are often left out of the loop. As a result, online stores receive a lot of complaints about delivery problems that are completely out of their control.

How to manage delivery expectations when couriers are delayed

Purchasing online doesn’t provide the same instant gratification that comes with going into a store. Therefore, a customer’s service expectations are naturally higher when they pay for something that they don’t get to experience immediately. When couriers are busier than normal, it can be hard to manage your customers’ expectations.

The key? Communication.

  1. Be upfront

During high-demand periods, be open and honest. It’s better to warn your customers that their orders might be delayed before they head to checkout, than it is to tell them afterwards.

Add a banner to your homepage that warns of possible delays. Include timeframes if you can. Add reminders to product pages and at checkout. Post about it on social media and include it in EDM and promotional communications. Encourage your customers not to leave their shopping to the last minute, so they’re more likely to get their order on time.

  1. Offer choice at checkouts

If you only offer standard shipping at checkout, your couriers will be swamped with orders that all have the same degree of urgency – even if your customer wants it the next day .

By offering delivery options like standard, express, overnight or Click & Collect, along with different rates for each of them, you encourage your customer to consciously think about when they want their order to be delivered versus when they need it to be – and how much they’re willing to pay for the convenience.

For example, if they need to buy paracetamol online because the chemist isn’t open, they might select a fast delivery option. But if they want to take advantage of an unbeatable deal five months before Christmas, they will be more likely to select standard shipping because it isn’t urgent.

  1. Send tracking pages

When a customer buys something online, they want certainty that it will arrive. Tracking pages empower customers to track the status of their orders, so they know where they are at every stage of the delivery journey.

But by using the default tracking pages supplied by couriers, you miss an opportunity to promote your own store.

Branded tracking pages enable you to engage with your customer long after they’ve hit the ‘Buy’ button. Use branded emails to give your customers a visual indication of where their order is. Direct customers to specials on your website or your social channels. Provide discount codes for their next purchase. Encourage them to sign up to your email database. You could even add a reminder that couriers are currently experiencing delays so be patient.

  1. Send notifications & emails

Because of the time it takes between paying for an order and actually receiving it, customers want reassurance about where their orders are. Sending email or SMS notifications at key stages of the delivery journey, like ‘printed’, ‘picked up’ and ‘out for delivery’, is a great way to keep them informed.

If you know that your customers are being impacted by delays, consider sending a ‘we haven’t forgotten you’ email too. It doesn’t have to be long, but it should tell them that you’re aware of delivery delays and that you’re doing your best to keep everyone informed.

  1. Bend over backwards

While courier delays are out of your control, they could give your company a bad reputation. A late delivery or bad experience may result in losing that customer, so consider offering refunds, store credit, discounts, or free shipping next time around.

Don’t bend over backwards too far though. Delays aren’t your fault and during high-demand times you probably won’t be able to do much about them. If you take a financial hit on every delay, you probably wouldn’t remain profitable for long.

Stay ahead of delivery delays

When delivery is delayed during high-peak times, the best you can do is keep your customers informed. The more you keep them in the loop with open, honest and transparent communication – even if it’s not good news – the more they’ll trust you.

Starshipit’s smart fulfilment automation enables online retailers to add options at checkout and send customers branded tracking pages and notifications at key stages of the delivery journey.

Ready to enhance your customer experience during the delivery process? Sign up for a free 30-day trial with Starshipit and get started today.

Getting paid during the post-virus crunch

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By Ordo

Many businesses spent lockdown offering a lifeline of payment holidays while customers financially struggled. With cash tight, now is the time businesses need efficient, effective, but polite, payment processes.

The country went into lockdown and businesses were asked to provide financial healthcare for customers. Many businesses rose to the challenge, despite staff working remotely, reduced work forces due to furloughing and accommodating colleagues left with zero childcare. That generosity has come at a cost…

Generosity hits revenue

There were plenty of offers, discounts and payment deferrals, and now that generosity is showing on the bottom line; businesses need to be smarter when collecting payments.

Existing bills may remain unpaid and/or take longer. Cashflow is more important than ever.

How to ensure you get paid

As businesses knuckle down, tricky payment conversations are inevitable. Here Ordo’s top tips for getting paid:

  1. Keep customers happy: make it easy for them to pay, straight from their phone without having to look up amounts and references, give them no reason to delay paying;
  2. Get money instantly and ensure automatic reconciling – new payments regulations mean payments services can be slick and efficient, meaning businesses are paid instantly, with money landing in your bank account immediately, and automatically reconciled;
  3. Cut costs – especially the hidden ones – do you know all that you’re paying to receive payments? Companies often take a percentage of the value of every transaction, 1-4% typically, and on a £2,000 bill that’s £80 – nearly a year’s worth of Netflix you’re giving Visa, Mastercard, PayPal or Stripe on every Make sure you know what you’re being charged, work out what the percentages really cost, including any rental/subscription for card readers or minimum/standing fees, and decide whether you’re happy; and
  4. Stay safe – think holistically: physical, mental, and online. We still need to be physically (not socially) distant from those outside our household, we need to keep active and try to forget the biscuit tin, and connect with people however possible. But the fraudsters are profiteering too – hackers fish for emails attaching invoices, the account details of which they change to their own, meaning when your loyal customer pays, it’s the fraudster that benefits leaving two innocent victims – in 2019 UK fraudsters made >£114m from invoice fraud. Find a secure platform that allows for secure bill sending, giving you and your customers confidence money will end up in the right place.

The post-COVID go-to payment method

Ordo is an end to end encrypted request-for-payment service, and is making getting paid easy. It’s free to trial, and can be API integrated with any system or used independently; with instant payment and reconciliation together with fraud prevention and low costs, it’s the game changer for businesses trying to survive the impact of coronavirus.

Find out more at www.ordohq.com/enterprise or try for free at www.myordo.com.

PCI DSS: The forgotten superhero and the case for Agent Assisted Payments

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As millions of pounds are lost to Coronavirus scams, the Payment Card Industry Data Security Standard (PCI DSS) is enjoying a well-earned revival. Rob Crutchington (pictured), Managing Director at Encoded, shows how to drive compliance and build customer confidence using Agent Assisted Payments…

 According to UK Finance, card payments accounted for half (51%) of all payments in the UK in 2019 while consumer use of credit cards rose by 7% to 3.3 billion payments over the same period[i].  Fortunately, these trends in payment habits have proved invaluable during lockdown when record numbers of consumers rely on debit or credit cards to pay for essential shopping.  Unfortunately, the COVID-19 health crisis has also highlighted the darker side of human nature with credit card fraud surging 35%[ii] and reports that £4.6 million has already been lost to coronavirus-related scams since lockdown started.[iii]

If these alarming statistics are anything to go by, widespread consumer fears about the vulnerability of sensitive card data are fell-founded.  Contact centres should take charge now, reassuring customers that it’s safe to make card payments by getting back to basics and embracing the functionality of secure Agent Assisted Payment solutions.

Back to basics with PCI DSS
Even though the first version of PCI DSS was introduced a long time ago (December 2004) the international standards framework still matters for three simple reasons:

  • Worldwide weapon against a global threat – the ultimate aim of PCI DSS of reducing the incidence of card fraud and promoting best-practice in information security is now more important than ever before.
  • Strict rules, punitive actions – it’s a violation of PCI DSS to record or store any CAV2, CVC2, CVV2 or CID codes after authorisation even if that data is encrypted.  Failure to comply means hefty penalties and we all know there’s no greater incentive to follow the rules than a severe dent in the pocket.
  • Trust across the entire payment ecosystem – PCI DSS affects everyone from the contact centres offering card payments to their partners, suppliers and customers.  The simple truth is organisations that have successfully achieved PCI DSS compliance are more likely to choose their third-party service providers carefully, conducting proper due diligence and risk analysis to establish whether they have the right skills and experience to deliver secure automated card payments.  This triggers a snowball effect to raise standards all round.

Introduce clever technology behind the scenes
Once re-acquainted with the importance of PCI DSS, why not introduce technology that enables PCI DSS compliance?  The latest Agent Assisted Payments allow contact centre agents to process card payments without being exposed to sensitive card data.  After the customer has used their telephone’s touch-tone keypad to tap in their card details, all an agent sees on their screen is whether the payment has been approved or declined.

Look for a partner who is Level 1 PCI DSS accredited, which means you and your customers can rely on their technology with absolute confidence.  They should offer Agent Assisted Payment solutions that are carrier, phone and CRM system agnostic so they integrate seamlessly with your existing contact centre infrastructure to enable real-time reconciliation of payments, maintain ‘business as usual’ contact centre operations, even when working remotely and deliver a joined up and exceptional customer experience (CX).

Three ways to use Agent Assisted Payments:

  1. De-scope your contact centre – for PCI DSS compliance purposes.  Implementing Agent Assisted Payments significantly reduces the time, cost and resource required to complete PCI DSS Self-Assessment Questionnaires (SAQs) for a company to become PCI compliant.  In fact, of the controls covered in version 3.2.1 of the standard, Agent Assisted Payments places 51% completely out of scope and 30% of the remaining controls are heavily reduced.
  2. Offer Tokenisation – for multiple payments, recurring payments or returning customers, Agent Assisted Payments linked to tokenisation enhance CX.  Tokenisation is the innovative process that allows contact centres to be outside PCI DSS scope, as no real cardholder data enters the environment and makes it a less attractive target for data hacking and stealing data. Meanwhile, returning customers are not required to enter card details over and over again.
  3. Educate customers about the value of PCI DSS – the chances are that most customers will have heard about Verified by Visa, 3D Secure or MasterCard SecureCode but draw a blank at PCI DSS.  The beauty of Agent Assisted Payments is that contact centre agents can continue to talk to the card holder throughout the entire payment process.  This gives them the opportunity to talk about the important steps their organisation is taking to keep customers’ card details safe.  They can also introduce new ‘accessible for all’ technologies such as virtual terminal payments specifically designed for disabled or elderly customers who may feel embarrassed when they cannot use traditional automated payment systems and prefer the human touch.

Now is the time to renew your acquaintance with PCI DSS and use Agent Assisted Payments to drive all-round compliance. Learn how to bridge the gap between providing personalised CX and enhanced security, while significantly reducing the time, cost and resource required to comply with stringent PCI DSS rules.

Nuapay your payments and enjoy Speed, Security and Savings

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Nowadays with changes to SCA, providing the right payment options is arguably the most important decision. Nuapay takes you away from the hassles of card processes, giving you access to a SCA compliant solution with no PCI requirement.

Keep up with the shift to mobile payments, open banking or recurring billing using our simple and secure solution. Explore our suite of non-card payment options, including open banking, direct debits and instant pay-outs.

We power many of the industry’s biggest players and would love to give you that same strength and depth. Book a meeting with our experts today.

Join our next  webinar.