In last blog, we have talked about why many major retailers are beginning to use mobile payments.

Now let’s take a look at the latest report about the volume of mobile payments. The global volume of mobile payment transactions in 2009 was $37.4 billion and total number of users stood at 351.4 million, according to a study by the IE Market Research Corp (IEMR). So far, so good, we’ve already seen such numbers, so there is nothing extraordinary about this report. Right?

Well, not so fast. The IEMR researchers goes on to predict that in North America alone mobile payments will rise to $288.4 billion in 2014, at a compound annual growth rate of 98.7%, which means until 2014 total transaction volume will grow to multiply by 30 !

Thus, if you are not ready for mobile payments, then be ready to lose many more sales opportunities in the near future.

If your current POS system accepts Visa, MasterCard and American Express, your future POS should also include these major mobile payment providers in the market:

Paypal

Paypal has been in the mobile payment market for a few years and it processed $4 billion in mobile payments in 2011, increased from $750 million in 2010.
Pros:
Full-featured mobile app on iOS and Android, including the ability to scan checks for deposit.
Cons:
Often criticized for high fees.
PayPal tends to lock down accounts for investigations with a guilty-until-proven-innocent approach.
Terms of service disallow many actions, and are quite obtuse in important sections.

Dwolla
Fourteen months after its December 2010 national launch, it moved $30-$50 million a month across its network.
Pros:
Dwolla charges only $0.25 per transaction, no matter how much money is being transferred.
A highly-secure mobile app is available for Android and iOS.
Instant transfers to and from your bank account, if your bank is part of the participating network.
Dwolla is integrating with merchants, allowing you to pay directly from your bank account. They even have a feature called that will “loan” you up to $500, charging a $5 fee only if you don’t pay it back before your statement is over.
Cons:
This could be a pro, depending on how you see it. Dwolla has no debit card function. It’s intended to be used as an extension of your existing bank account.

Mobile payments are the next frontier of retail technology. New products and services that let consumers pay for products using a Smartphone instead of a bank card or cash are emerging.

For instance, Starbucks says that last year more than 26 million in-store transactions were paid on mobile phones. Customers can use their phones to make purchases at more than 9,000 locations.

Clothing retailer American Eagle Outfitters, Toys R Us, Foot Locker, and Macy's also support mobile payments.

Meanwhile, The Wall Street Journal recently reported that Target, Wal-Mart, and other retailers are working on mobile payment system.

How do mobile payments benefit consumers versus using credit cards?

The main selling point of mobile payments is its ease of use - consumers have their phones handy, why not process transactions with them? In addition, according to Pew Internet & American Life Project, 35% of American adults own smartphone (58% of Americans between the ages of 25 and 34 now own a Smartphone), and more and more adults begin to use smartphones as the cost of owning one is decreasing. Additionally, customers can easily pay for these transactions–they just show up on their monthly carrier bill.

A recent eMarketer study pointed out that 66% of 18-44 year old adults said they were somewhat likely to try mobile promotions (such as coupon). 31% said they would be willing to give their mobile number in exchange for mobile promotions. When you reduce the age range to 18-34 year adults, the number jumps to 50% willing to receive promotions on their mobile phone by giving their number to a business.

The redemption rate of mobile promotion is also very impressive.

A recent Exposure2 report shows that mobile coupon redemption rates often exceed 50 percent, while paper coupons typically have a redemption rate of only 0.2 percent to 2 percent.

Sounds very attractive, right？Are you ready to get mobile marketing?

Before your start, you should be aware that there are three crucial phases to consider when adding value through the mobile medium:

Phase 1: Customer data acquisition

Add simple mobile engagement campaigns to your existing strategies to help build a mobile CRM database. Simple text-in campaigns for an immediate in-store offer is a good place to start – all offers redeemable at the point of sale.

Phase 2: Generate repeat business

Use insight gained from your mobile CRM database to conduct tactical marketing.

Based on your customers’ previous behavior, you can use tactical mobile coupons to bring past customers back into the store. Keep in touch with your customers by using mobile newsletters introducing new product ranges. Promote viral marketing by getting your existing customers to recommend their friends.

Phase 3: Loyalty

Build a regular mobile relationship with your customers, and communicate previews of new products and services on mobile. You can identify your most profitable customers and enable them to receive exclusive VIP offers with all communications delivered on mobile.

This three-phased approach is made considerably easier through an end-to-end mobile marketing offering which is easily integrated into your current marketing activity.

Based on a recent survey conducted by Cisco's Internet Business Solutions Group (IBSG), over half (51%) of U.S. shoppers now use or want to use in-store kiosks for self-service access to the Web.

The survey also provided further proof about the rapid rise of tablets as a shopping technology: 35% of U.S. respondents use or are interested in using tablets for in-store digital content delivery. Mobile phones are ahead only slightly, identified by 40% of respondents.

Consumers' hunger for digital content as part of their brick-and-mortar shopping experience is having an impact on conversion rates.

"Content is critical for all areas of the retail business, not just e-commerce," said Lisa Fretwell, senior director of Cisco's IBSG. "The key for retailers' survival is to reinvent the store by bringing online content into the store and creating engaging, personal and emotional experiences that encourage shoppers to buy. We call it a 'catch 'em and keep 'em' strategy, getting both footfall and fingertips from shoppers to drive sales." Use digital content to drive sales at your store:

Consumers want to view and find items from networks in real time through digital point of interaction such as kiosk or smart phone. Some large chain stores such as Target and Best Buy have already adopted mobile POS, a mobile digital point of interaction.

You can cross sell or up sell related products through digital point of interaction at your store such as a kiosk. This is like how customers do shopping online, they want to see what other customers buy or what is the most popular item before they make their purchases.

The pace of cloud adoption may surprise some leaders, but 12% of retail respondents to the 2011 Annual IDC Insights Survey reported that they are already using or currently implementing a cloud-based capability. Altogether, 30% of the survey said they would be leveraging cloud within three years.

Why more and more retailers are interested in cloud based technology?

Leslie Hand, research director of IDC Retail Insights pointed out ‘Cloud-based technology enables better, faster and cheaper innovation’

Better: SMB retailers sometimes struggle to introduce new capabilities because of internal skill sets or capacity doesn’t accommodate the change. In a managed service environment, the right capabilities can be brought to bear to build better, more sustainable systems.

Faster: Outsourcing technology ensures the business can add capabilities as often as the market demands. Cloud-based enterprise will also scale up and down easily to adjust to market and business demands.

Cheaper: Cloud-based platforms enable SMB retailers to pay as you go, avoiding the capital cost barriers to renovating IT platforms.

With just 10 days until Christmas, the National Retail Federation has revised its holiday forecast upward, expecting holiday sales to rise 3.8 percent this year to a record $469.1 billion.

The forecast revision comes on the heels of two promising pieces of news. On Tuesday, NRF announced that retail industry sales for November rose 4.5 percent year-over-year. In addition, NRF's most recent holiday survey found that the average American has completed far less of their holiday shopping than in previous years — an indication that many shoppers bought for themselves in November and have plenty of holiday shopping left to do.

In the last 10 days, what you should focus on to get a bigger piece of the cake?

Use more gift card promotions: in the holiday season, your inventory moves mush faster. In order to make inventory moves much faster, many retailers reduce price in many ways including gift cards, coupons and discounts. However, gift cards are a much better choice than coupons and discounts. The reason is simple: gift cards bring your customers back and use the credit at your store. That is what big winners such as Amazon did on Black Friday.

Real-time inventory visibility: some of your items go much faster than other do. Sometimes, the hottest items will be out of stock in minutes. If you do not have real-time inventory visibility, you will lose a lot of potential sales which will be a big loss for you. Use real-time inventory to monitor your inventory so that you can restock in time to maximize your revenue.

From the survey conducted by Integrated Solutions for Retailers in December 2011, 56% of retail executives feel that the biggest ROI in supply chain and logistics will come from inventory initiatives, a key to all-channel fulfillment.

You could make the case that inventory is always important, but this year executives have realized that their inventory systems are out of step with the new realities of all-channel fulfillment.

Real-time visibility across the whole enterprise is paramount. This includes what is in the store, what is in transit, what is in warehouse as well as where the inventory is located in the store or warehouse. Retailers need to have the visibility into inventory sitting in a store which is available for sale by another store or can be fulfilled through internet orders, allowing retailers maximum return on their investment. 30% of retailers are attempting to do this (estimated by retailsolutionsonline).

Unless you are capable of maintaining perpetual inventory, in most cases, the inventory information may not be accurate to guarantee all orders can be fulfilled within the right timeframe. Customers will not be happy!

For this reason, we are seeing a lot of retailers seeking real-time enterprise-wide inventory visibility solutions. Get a real-time enterprise-wide inventory system to maximize your ROI!

For all but the smallest retail organizations an ERP solution promises big gains, helping to grow revenue, increase productivity and improve efficiency. ERP integrates a variety of disparate systems, automating time-consuming processes and streamlining operations by controlling many of the business activities through a single consolidated database.

There are “must haves” that are integral to an ERP system which has been specifically designed to address the needs of an SMB retailer:

Inventory Optimization: The ability to utilize tools within the ERP solution to make important buying and selling decision with the goal being: the right product, at the right time, at the right price in the right place.

Revenue Management: The ability to utilize selling history and current consumer purchasing trends to market and promote products at the right price at the right time.

Inventory Management: The ability to control and monitor products throughout the supply chain process, including monitoring quantities on hand, in transit, and purchasing requirements and ensuring purchasing of product at the right quantity and cost.

Sales Management: The ability to ensure reliable transmission between head office and stores with confidence that the advertised price, shelf talker price and POS selling price match. Loss Prevention also falls into this grouping, insuring that detailed POS sales activity can be monitored and analyzed at the head office.

Reporting and Analysis: The ability to incorporate all activity from all business operations where upper management can analyze and make informed business decisions and take appropriate actions.

As a SMB retail business owner you cannot dispute the fact that all shoppers think and spend differently and therefore each shopper brings in a different value to your business.  Call them as you wish the Loyal Shopper, The Impulse Shopper, the Utilitarian Shopper, the Bargain Shopper, your Baby Boomer Shopper, your Gen X, Gen Y and your next Gen shopper and so on…As a retail business owner implementing these 5 steps can create not just an analytical but an emotional connection to engaging your shoppers on an individual basis based on their unique shopping personality that will result in creating opportunities for optimal interaction at the Point of Purchase while increasing potential sales revenue.

Loyalty Program: Setting up a Loyalty program can be a simple process based on how a retailer wants to use the information to offer incentives to their customers to keep the returning to their establishment.  A tremendously valuable program to keep your customers engaged.  Airlines seemed to have started doing this best with keeping their passengers returning to them as you climbed up the tier the benefits were so valuable you did not want to start again anyplace else?  How are you enticing your shoppers to return- what benefits are you offering them that they can’t get anyplace else?   Keep these shoppers engaged at the point of purchase by showing them how close they are to their next tier, for example if they  purchased one more item (sale item) or an additional $10 more they would be eligible for the next level of the program.  This type of engagement will appeal to your shoppers across the board.

Text Marketing: You can easily say that most Americans today arm themselves with a cell phone and it’s used for just about everything except to talk on.  It is their connection to their family and friends and also connects them through various social media channels.  Statistically more Americans tend to open a text over an email they get the message immediately and will likely react to a call to action quicker.  Adding text marketing can help retailers initiate a call to action.  Send out a text alert for a lunch time special sale, or a happy hour sale, friends and family special or an after hours VIP sale based on your loyalty program.  Again if done correctly based on your loyalty and analytics this can be very engaging and rewarding to the shopper and the retail merchant.  Text Alert marketing can be used in similar ways that groupon or FB uses deals….having the shoppers coming in at a certain time can help with staffing and creating an amazing shopping buzz!  You have to give this a try!!

Relevant Marketing: I am one of those that is likely to sign up for email, but more often than not I will tend to delete emails that are not relevant to my interest.  They may have initially caught my interest but will have failed to keep me engaged.  Again this marketing is very important especially to neighborhood stores that rely on their marketing campaigns. These stores will most likely tend to mass market their email campaigns where the information is irrelevant to the recipient and therefore lose their engagement.  Use your loyalty program and analytics to carefully market to your right shopper- will my Utilitarian Shopper benefit from the same email marketing than my next gen shopper.  Or another example, a shopper willing to purchase full price on a must have item; will likely not be interested in your clearance mailer.  Relevant Marketing can save retailers hundreds of dollars in unnecessary spending on advertising, by focusing on their existing customer base and marketing to them accordingly.

Quick Response Codes: – Commonly known as QR code, this is a great interactive way to keep your customers engaged while adding to your brand.  It offers them a surprise that they will only receive from you for them. It promotes excitement as to what will the reward reveal!  Remember Lets Make a Deal; door number 1 or 2 or 3?  Well consider multiple codes that a customer can select and scan to redeem their reward.    QR codes can be marketed in different ways from promotional t-shirts, store bags, receipts and even at the checkout counter.   Initiate QR codes based on your Customer loyalty or spending habits, so again marketing to relevant information to the right customer.   QR codes can be customized to change the message at any time, and having a system that will allow you immediate price changes can really keep your customers excited for shopping.   QR codes can also be programmed to be password protected.

Go Green: I loved this feature when I had purchased my apple products from the apple store.  A win win for both retailer and customer.  Start with getting the customers email address, to email the receipt, this email address will also be a good start for gathering data on your customers spending and interests, and can be used for relevant marketing and loyalty program.  It’s environmentally friendly by reducing the paper trail with receipts.  It’s convenient for the customer to receive it to their email and have it available at any future time when needed.  In the event a return or exchange needs to be done, the retailer will have the data under the customers email address provided, eliminating any guess work as to the pricing of the product, missing receipts etc.

Your inventory is your money, it’s what you spend the most on in your business, and it is what you rely on to recover and profit in your business.  Improving your inventory management in 5 simple steps could lead to efficiency and profits.

1.    Always have real time knowledge of your Inventory. Knowing what inventory you have in stock is knowing how much money you still need to recover from your products.  Use a reporting system that automatically updates your inventory balances to reflect moment-by-moment changes as inventory is sold at the store level.  This helps reduce costs, increase inventory-turnaround and cuts back on over ordering!

2.    Set Reorder Level Settings:  Popular items should never go out of stock so be sure to set your system with reorder level settings. Select a reorder level setting that best suits your specific store or venue.  Reorders should automatically take place after a certain number of days, or to take place once the inventory reaches a predetermined, fixed quantity for that specific product.

3.    Offer Related Items Recommendations:  When a customer is purchasing a product at the cash register, the cashier should be able to recommend products based on actual items previously purchased by customers along with the particular item, or items the store owner has recommended. For example, if a customer is purchasing a winter coat, the system will offer recommended items such as gloves, a matching scarf, or boots.  Effective cross-selling can boost inventory sales around 20%.

4.  Classify your Inventory:  To achieve inventory management excellence, you must feel confident that your inventory is accurate. You can validate the accuracy of inventory by organizing each type of product into Bin Locations (where) and size bricks (different sizes/colors ordered) .  This allows you to know what you have ordered, the quantity, the availability and saves time on reorder.

5.    Consider an instant sale! This creates an instant buzz to move your inventory.  Save time by using mass item modifications to change prices for over 100 different items in your store.  Using this type of capability helps you to change prices or other information for large amount of products in seconds. It saves your time on editing product information and reduces errors compared to manually modify product information one by one.