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Brick-and-mortar irrelevance?

BY Dave Wendland

Many fresh ideas and forward-looking visions were shared during the recent — and highly impactful — Drug Store News Industry Issues Summit. For the 12th consecutive year, I had the distinct honor of moderating a panel focused on chronic care and retail health. What a pleasure to learn of the collaborative efforts underway among the suppliers and retailers on the panel. How exciting to discuss the CDC’s recent report citing a decline in the incidence of diabetes in our country. And it was inspiring to hear how technology, advanced science, and the evolving role of pharmacists are poised to improve outcomes for patients stricken with chronic conditions.
 
Then, we heard from the keynote speaker, Gary Vaynerchuk, and members of the audience were shell-shocked. Mr. Vaynerchuk challenged everyone to consider whether they are “operating in the past” or “living in the moment.” Truthfully, many in the audience have not yet accepted the realities of today’s marketplace. A market dominated by speed, agility, omnipresent access, reasonable prices, and always in-stock demands.
 
This holiday shopping season has certainly underscored the significance of the Internet and mobile-shopping at the expense of brick-and-mortar. For some, Black Friday became masked in embarrassing and financially-troubling streaks of red. Sales at retail stores on Black Friday fell 10 percent to $10.4 billion this year, down from $11.6 billion in 2014, according to research firm ShopperTrak.
 
I am confident that unique end-to-end models will emerge within brick-and-mortar retail. The idea that it is an “either-or proposition” to have both a traditional storefront and online presence is yesterday’s news. It is no longer a question of whether to add e-commerce capabilities — I believe it is necessary. It is also impractical to consider mobile, social media or seamless shopping across every channel luxuries that only a few can deploy. These new building blocks have become essential to the very foundation of any retail operator.
 
So have brick-and-mortar stores become irrelevant? Well, if they are operating as they have historically functioned and not risen to the challenge of today’s shopping demands, I’m afraid so. But for those willing to adapt, evolve, and meet shopper’s needs today — and tomorrow — there is a bright future indeed. 
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Walmart looks to disrupt mobile payments landscape with Walmart Pay

BY Mike Troy

BENTONVILLE, Ark. — Shoppers at Walmart stores will soon be able to pay with their smartphones as the retailer has developed a unique solution to become the newest entrant in the crowded world of mobile wallets.

Branded as Walmart Pay, the service is a uniquely Walmart solution to the rapidly evolving world of mobile payments that is likely to increase downloads and utilization of the retailer’s mobile app. By adding payment functionality to its app, Walmart said it is the only retailer to offer its own payment solution that works with any iOS or Android device at any checkout lane, and with any major credit, debit, pre-paid or Walmart gift card.

“(Walmart Pay) is about how we can use payment to create a better shopping experience for our customers in our stores,” said Daniel Eckert, senior vice president of services for Walmart US. “When we looked across all the solutions that were out there, many are limited to only certain types of phones or certain device operating systems or only to certain payment types.  In some instance all three of those constraints are placed upon a customer. We needed a solution that offered mobile payment access to as many of our customers as possible. The result was Walmart Pay.”

Roughly 140 million customers shop Walmart store each week and 22 million of them actively use the retailer’s app each month. With the addition of payment functionality the retailer is likely to see its app become even more relevant to shoppers for whom the mobile devices have become an indispensable part of daily life.

“The beauty of Walmart Pay is its simplicity. It makes the app even more valuable to our customers and helps us build a deep relationship with them. Soon, customers can leave home with only their keys and a smartphone to shop at their local Walmart,” Eckert said.
A nationwide rollout is due next year and according to Neil Ashe, president and CEO of Walmart Global eCommerce, the timing couldn’t be better given the trends Walmart is seeing this holiday season.

“Millions of our customers used their smartphones to simplify the shopping experience,” Ashe said regarding Thanksgiving weekend shopping behaviors. “Nearly half of customers bought their online orders on a mobile device. That is double last year, and significantly higher than the industry average. And when they were in our stores they used the Walmart app at twice the rate as last holiday.”

Walmart’s decision to add payment functionality to its app is the latest development in the rapidly evolving mobile payments landscape where brands such as Apple, Samsung, Visa offer solutions and a retail consortium MXC has introduced an app called CurrentC. Acknowledging the crowded landscape, Eckert said Walmart Pay is designed in a way to work with other solutions and perhaps accelerate what to date has been a tepid pace of consumer adoption.

“We’ve even designed (Walmart Pay) to allow for the integration of other mobile wallets in the future as these capabilities mature in the marketplace,” Eckert said. “We believe Walmart pay will make the ease of mobile payment as reality for millions of Americans while improving the checkout experience for our customers.”

To see how the sign-up process works, click here. To see how the checkout process works, click here. And to listen to Ashe and Eckert discussing the launch of Walmart Pay, click here.

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Deloitte: In-store mobile payment on the rise

BY Dan Berthiaume

NEW YORK — Consumers are increasingly using their mobile phones for one specific retail-related purpose.
 
According to the Deloitte 2015 Global Mobile Consumer Survey, the use of mobile devices to make in-store payments has nearly quadrupled in the past year. In-store mobile payments have increased from 5% of total in-store payments 2014 to 18% in 2015.
 
The most popular uses of mobile payments were for public parking (19%), gas station purchases (18%), coffee shops, and fast food dining (17% each). The 25-to-34-year-old demographic is driving the majority of this activity for in-store purchases at 36%.
 
At the same time, half of consumers said that they don’t view mobile in-store payments as secure enough. Moreover, 36% of consumers simply do not see any benefits to using mobile phones for in-store payments.
 
Other notable findings include:
  • Sixty-one percent of American consumers indicate that they sometimes, if not often, use their smartphone while out shopping.
  • More than one-third of all consumers use their smartphones predominately without the prompt of an incoming message or alert.
  • Four percent of consumers in the U.S. look at their phones more than 200 times a day.
  • Nearly half (48%) of consumers check their phones up to 25 times per day.
  • Ownership for fitness bands doubled year-over-year, with approximately 10% of consumers owning a fitness band.
While more consumers own fitness bands than smartwatches, smartwatches drive greater usage. Seventy-four percent of consumers use their smartwatch on a weekly basis, compared to 66% who use their fitness band weekly.
 
“We believe that education of consumers on the benefits of advanced security features of some forms of mobile payment technologies could yield additional growth opportunities for the sector,” said Craig Wigginton, vice chairman and U.S telecommunications sector leader, Deloitte & Touche LLP.
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