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The
retail industry is continuing to experience challenging
times and this year’s Retail Solutions exhibition
at the Birmingham NEC did very little to prove things
will change in the near future.
With most retailers having completed the rollout of
chip and PIN, many of them may feel that they can
rest easy for a short period before looking at the
next large spend out of their IT budgets. However,
this really could not be further from the truth.
The Payment Card Industry: Data Security Standard
(PCI:DSS) is a piece of legislation which if ignored
by organisations could have very large repercussions.
In a presentation entitled: What is PCI:DSS and what
does it mean for retailers? Gareth Wokes, chairman
of The Logic Group, and Paul Baker, business leader,
advanced payment solutions at Mastercard outlined
what organisations need to be doing and how they cannot
afford to ignore the deadline of 30 June 2007.
PCI is concerned with looking at card data and the
details of customer information. Baker describes it
as a necessary evil to protect card data and provide
consumers with confidence. The solution is a global
initiative which is not just focused on technology,
it also looks at the importance of processes and training
of staff.
The 12 areas of the standard focus on issues concerning
stored data, such as cardholder name and a card’s
expiry date. However, Baker stresses the issue of
PCI does not concern retailers alone. “It affects
anyone who is in the business of storing data,”
he says. “Besides protecting data and preventing
security breaches it also seeks to protect brand reputation.”
With retailers only having 12 months to get their
processes in place The Logic Group’s Wokes says
it is important that organisations understand where
they are now and where they need to be. “Getting
compliant is not merely about technology. It is about
the whole operation,” he says. Firstly, organisations
need to go through a pre-compliance assessment and
here you must begin by understanding what you need
to do. Once you complete this you need to go through
remediation and when this is complete you will be
ready for audit, where a report on compliance is produced.”
Wokes also points out that time is against organisations,
so businesses need to act fast. “Companies must
start now, establish where they are, then inform their
board of directors and make informed decisions,”
he says.
Money’s
too tight to mention
Many retail organisations are claiming
that they have very little money available to spend
on their IT. Bill Waterson, head of retail at Fujitsu
Services, revealed the company’s results of
its analysis of 75 retailers and how they intend to
invest in EPoS over the years to come in a presentation
entitled: Technology and the customer experience.
The report saw Fujitsu speak to 75 retail operations
directors and all the organisations had a turnover
greater than £100m. The main questions were
how are these retailers using technology? And what
do they plan to do over the coming years?
Waterson found the results disappointing. “Many
respondents felt that consumer behaviour is changing
and the key to success is cost cutting,” he
says. “There are very few investment opportunities
planned for the next five years. Many retailers have
given up the fight and are not looking to enhance
top line growth.”
It appears that the primary focus of technology is
the issue of cost saving.
Seventy-one per cent of those questioned claim it
is the most important issue, while improving the customer
experience is crucial to 29 per cent. “This
may be true in the short-term, but it’s not
appropriate over the next five years,” he says.
“Cost reduction will always be key, therefore
this can have a limited impact.
“The largest investment is in the e-commerce
space. It is risky to say that further investment
will not come in the future. If retailers had not
planned ahead five years ago they would not have invested
in the internet, EPoS or self-checkout.”
According to Waterson there are two dynamics in retail
at the moment. “The two areas concerning consumers
are value orientation and price sensitivity,”
he says. “There is also very little difference
between food and non-food sectors and service can
carry a premium.
Also consumer knowledge is increasing. Shoppers are
becoming more sophisticated and are using multiple
channels and self-service solutions.”
There are opportunities but innovative retailers are
required to push them forward. “Opportunities
are available to retailers who look to differentiate
themselves from the competition,” adds Waterson.
“Technology needs to be viewed as a tool to
develop the business rather than just to cut costs.
It is important that the gap is bridged between IT
and operations. It is necessary to combine the retail
strategy with technology. We need to look at the whole
customer experience rather than just the point of
purchase.”
Touching
tribute
Bill Laird, the former COO retail at Midcounties Co-op
and now managing consultant at Future First Consultants,
spoke about the introduction of Pay By Touch (PBT)
at the Three mid-counties Coop. PBT is a free consumer
payment service. This allows shoppers to access their
financial and loyalty accounts with a simple finger
scan.
For initial ID verification a driving licence or passport
is required and the fingerprint is held with a unique
data points on the finger. Shoppers can enrol at paybytouch.com
The
payment process can begin at any stage in checkout
transaction. The additional costing requirements,
as opposed to chip and PIN, are relatively small.
The customer initiates PBT transaction by placing
the finger on a sensor and entering the code. A match
is then found and the consumer then confirms the transaction
total.
Co-op is looking to rollout PBT technology in three
stores across the business. “In the UK we are
having to use a debit rather than credit card system,”
says Laird. “Following rollout a survey was
carried out interviewing 1,000 consumers in and around
the store areas.
Of
those questioned, over 50 per cent are enrolled or
plan to enrol, while 75 per cent want it in other
stores in the area. Also, 85 per cent felt it was
more convenient than chip and PIN and 76 per cent
felt it was more secure.”
However, it is important to consider that without
widespread take up, it has the potential to stall
as a technology. “This won’t work if just
one retailer takes it up. It needs more retailers,”
adds Laird.
Fighting back
With the issue of online and CNP fraud continuing
to grow, Ian Green, director of Fraud solutions at
192.com Business Services, highlighted the way organisations
need to work together to beat the fraudsters. “These
criminals are highly sophisticated team who often
operate in networks,” he says. “They are
not brand sensitive and as well as being organised
across multiple geographies they are highly mobile.
Fraudsters are persistent offenders and if they are
only successful in one in 100 transactions it’s
still worth their while.”
Green advises that it is essential that retailers
should be sharing information with each other, just
as the fraudsters do. “Organisations need to
be as organised as the criminals are,” he says.
Communication between retailers and partners can play
a key role in beating fraud and liaising with the
police can also be beneficial. Retailers must ensure
that their systems have the best defence and that
they are better organised than the criminals. Ultimately
greater ID protection gives greater brand protection.”
However, despite the show having some very serious
business to deal with the exhibition did have some
lighter moments. One such example was the attendance
of Sir Geoff Hurst on the Ergonomic Solutions stand
for the company’s ‘Pink Champagne’
reception. Sir Geoff took the opportunity to talk
about his football days, while also making his own
predictions for the World Cup. Although picking a
winner for this year’s final is probably much
easier than predicting what’s in store for the
retail market over the forthcoming months.
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