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Table of Contents

Lead Story

The shifting landscape of merchant acquiring

Patti Murphy

News

Industry Update

Merchants, courts debate credit card surcharging

Merchant groups press on for lower Durbin cap

Amazon unveils exclusive e-commerce program

Features

How tax fraud impacts your merchants

Andrew Altschuler

Views

The showroom effect

Dale S. Laszig
DSL Direct LLC

What to disclose to underwriters

Ken Musante
Eureka Payments LLC

Education

Street SmartsSM:
The merchant cash advance

John Tucker
1st Capital Loans LLC

Getting legal with millennials in payments

Adam Atlas
Attorney at Law

A great leader may not be your friend

Steven Feldshuh
Merchants

Facilitating collaboration to safeguard sensitive data

James Daube
Global Legal Law Firm

From EMV to CNP: A look into U.S. authentication

Christoph Tutsch
Onpex GmbH

Company Profile

Go4Payments

New Products

Internet failover for high-volume merchants

OptConnect duo
OptConnect

Comprehensive, proactive ID theft protection

BFR SecurID
Business Financial Resources LLC

Inspiration

Brush up your phone manners

Departments

Letter from the editors

Readers Speak

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

April 25, 2016  •  Issue 16:04:02

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The very point of sale:
The showroom effect

By Dale S. Laszig

What's different about the new retail showrooms? Everything. Their elegant sparseness is a refreshing antidote to the low-tech world of mass merchandising, cash registers and checkout lines. Consider the airy weightlessness of an Apple retail store, where associates move around freely, help guests and discreetly process checkouts on handheld devices, eliminating wait lines. Many retail showrooms have a similar ambiance. Minimalist displays have replaced monotonous rows of merchandise, enabling shoppers to view entire seasonal collections.

Viewing a collection was once a rarified experience reserved for store buyers and elite shoppers; it can provide insights into the designers and concepts behind the brands. Fashion designer Rebecca Minkoff wanted her showrooms to reflect her global lifestyle brand. Her stores in New York, San Francisco, Los Angeles and Tokyo denote a fashion forward aesthetic, using interactive, mirrored walls where shoppers can order a free beverage, request a fitting room, order clothing online and learn more about products through curated content and videos.

Blending in-store, e-commerce

Minkoff's company teamed with eBay Inc. to build tech-integrated stores, blending e-commerce with in-store shopping. Minkoff credits her brother Uri Minkoff, company co-founder and Chief Executive Officer, with the connected store concept. "He had a Vulcan mind meld with eBay," she said. "I just shared what I like least about shopping." Minkoff's clothing sales reportedly tripled within a year of introducing digitally enhanced showrooms and fitting rooms.

"In the fitting room, the technology, powered by eBay, again overlays the mirror; no cameras are involved in the tech integration," wrote journalist Hilary Milnes in a September 2015 post in Digiday. "RFID tags recognize each item brought in, and shoppers can pull up product screens that show the item styled with different looks, as well as other available sizes and colors, much like you would find when shopping online."

Buy now, wear now

Minkoff stunned the fashion world in February 2016 by debuting a spring collection on the verge of Spring, enabling followers to see something they like and immediately purchase and wear it. Minkoff hopes her pioneering "buy now, wear now" practice, which is promoted on social media as #seebuywear, will ultimately boost U.S. manufacturing and reduce retailers' carbon footprints.

"I think the key here is that by cutting off 'fast fashion' at the knees with them not being able to see new collections ahead of time and knocking them off before my goods hit stores, my hope is that over time the consumer will buy the designers' goods, and fast fashion will become less relevant and less wasteful," Minkoff stated in a Reddit AMA (ask me anything) interview.

It's common to see shoppers use smartphones to research products and bargain hunt. Retail analysts were initially wary of the practice, known as showrooming, fearing it would take a bite out of physical store sales, possibly even putting some smaller merchants out of business. But retailers embraced it, surprising customers and analysts alike by getting into the game.

Many retailers rose to the challenge by designing the most cutting edge showrooms imaginable. While styles may vary, today's retail showrooms have found compelling ways to connect their physical and virtual stores to create a seamless customer experience across all channels. Mobile technology has made shopping, and even showrooming, more of a journey than a destination.

The net effect of showrooming doesn't always lead to someone walking out of a store and buying something online for less. Many customers search for items online and buy them in physical stores. This practice, originally dubbed reverse showrooming, has become known as webrooming.

Mirror, mirror on the wall

Cash registers and countertop terminals, like other single use devices, are not always visible in the new retail showrooms. Many, nearing the end of their useful lives, are placed in backrooms and behind curtains. In his article "Find the Missing Cash Register," Wall Street Journal reporter Ray A. Smith noted a sharp decline in designated checkout areas at many high-end stores.

While cash registers may soon be relegated to the Smithsonian Museum, magic mirrors and handheld devices designed to facilitate fetching coffee, sending items to a fitting room and creation of personalized messages can also handle payments. Magic mirrors can also be a boon for mother-and-daughter shopping, as one mother attending a recent retail conference noted. "As mothers, we can't say, 'That dress doesn't look good on you,'" she said. "But with a computer or interactive mirror, that's where real magic can happen."

It's attitude

Even small retailers understand they need an online presence to remain relevant in the digital age. Fortunately, advanced technology has democratized the retail landscape, making it possible for the smallest mom-and-pop stores to create websites, online ordering systems and mobile apps to help drive traffic to their stores.

Today's merchants need more than technology; they need partners to help them scale their brands. In an age of personalization, even small retailers can leverage big data to send personalized messages to their customers. These merchants deserve the same kind of personalized experience from their payment processors: affordable, integrated systems that enable them to manage inventories, understand customers, and facilitate commerce at any point of interaction, whether online, in-store or on the mobile web.

Showrooming and other forms of digital behaviors can create both hazards and opportunities. In large part, the outcomes depend on how merchants choose to react. Is the glass half empty or half full? Does one obsess about shopping cart abandonment or focus on boosting conversion rates? In the end, it's all the same process, but in retail, as in life, attitude is everything.

SIDE NOTE:Showrooming versus webrooming

Webrooming, a trend brick-and-mortar retailers are bound to appreciate, has emerged:

"With showrooming, retailers are faced with the challenge of customers coming into the store to browse and test products, only to subsequently go home and actually complete their purchase online (often through a competitor)," wrote Dr. Gary Edwards, Chief Customer Officer at Mindshare Technologies. "Webrooming, on the other hand, is when consumers research products online before going into the store for a final evaluation and purchase."

Dale S. Laszig, Staff Writer at The Green Sheet and Managing Director at DSL Direct LLC, is a payments industry journalist and content provider. She can be reached at dale@dsldirectllc.com and on Twitter at @DSLdirect.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

USAePay | Impact Paysystems | Electronic Merchant Systems | Inovio | Board Studios, Inc.