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Table of Contents

Lead Story

Helping merchants thrive during holiday season 2017

News

Industry Update

News Briefs

Views

Five rules of working with creatives

Dale S. Laszig
DSL Direct LLC

Education

Street SmartsSM:
The sale of a portfolio

Steven Feldshuh
Merchants' Choice Payment Solutions East

What if a regulator says you are an MSB?

Theodore F. Monroe
Attorney at Law

Make merchants love you - and avoid litigation

Jake Greenberg
Ehrenstein Charbonneau Calderin

Five-step plan for cross-selling to merchants

Barry Davis
Womply

Company Profile

National Benefit Programs LLC

New Products

Full-service payment platform for merchant aggregators

Payrix
Payrix LLC

Inspiration

Become a believer

Departments

Letter from the editors

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

October 23, 2017  •  Issue 17:10:02

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Helping merchants thrive during holiday season 2017

Year-end holiday shopping has transformed from the days when most retailers kicked off the season by closing their doors on Thanksgiving and welcoming voracious crowds on Black Friday. When online shopping emerged, Cyber Monday became another benchmark. Now, many retailers offer discounts before Thanksgiving and remain open on the holiday. Consumers increasingly shop online 24/7 wherever they are from a diversity of devices, and merchants are offering new ways to pay.

With this in mind, we asked members of The Green Sheet Advisory Board these questions:

  1. What do you think the future holds for the season? How might shopping and payments be different?
  2. What's your biggest concern going into this year's holiday season?
  3. How you are helping merchants prepare now for this busy time? Have you entered into new partnerships that help merchants better serve their holiday shoppers?
  4. What are the top holiday-season issues you've had to solve for merchants, as well as for your team?
  5. Are there actions you’ve taken to assist merchants during lackluster holiday seasons? If so, what are they?

Following are perspectives they shared. Many thanks to those who took time from their busy schedules to participate.

Lane Conner, Fuzse

This question is interesting as we continually move toward a digital economy. Consumers are becoming increasingly comfortable with online retail giants like Amazon. That being said, the media will still run the stories on their nighttime news about long lines at big-box stores like Walmart, Target, and Best Buy. We will see the same footage we see every year of people camping out to get the next, greatest gadget or the people running into Walmart to get the good price on the television.

The interesting thing is that most of the deals are smoke and mirrors anyway. We see the same (if not very close) discounts online, and that is where savvy shoppers that have done their research go. As consumers, we do not rely as heavily on the person at the store being an expert on a certain product set anymore. I remember growing up and my Dad taking me to Best Buy (or a similar electronics location) if he had questions about an electronics purchase before he made it. Today, we can do all of our research online and come to a decision from the comfort of our homes or offices. Online purchasing will go up again this year and will continue to rise year over year.

With the influx of online shopping, I would not be surprised if we see a higher rate of fraud. EMV (as badly as it was rolled out) has helped at large retailers, but it does little to mitigate fraud from online purchases. This is not a holiday shopping thing for us – it is an everyday thing. We continually try to find ways to better equip our merchants with the newest technology or fraud mitigation tool. If you are waiting until the holiday season to help your merchants for the busy time, it is too late.

We, at Fuzse, now deal mostly with card-not-present transactions, but when we did a good deal of work with retailers, our biggest concerns were outages or a lapse in processing. The worst thing for any merchant at any time of year is the inability to accept cards.

Allen P. Kopelman, Nationwide Payment Systems Inc.

  1. Shopping online is getting more and more popular every day – especially from Amazon. People who need last-minute gifts will go to the stores. And stores that sell specialty items are still showing strong sales. In fact, I think we will see a trend where retailers try to sell items not being sold online – and making agreements with manufacturers in order to get specific items that are only sold "In Store."

    I have seen this a few times: "Web Special" you can only order online to get the price, or "In Store Special only".

  2. Fraud at smaller merchants’ websites. They see big sales and their eyes light up. Even though they think a sale might be fraud, some merchants push it thru and roll the dice to make money.
  3. Merchants with locations need to start adapting to using social media and using apps - or they will become irrelevant in a few years. We try to make sure merchants understand the need to: watch for telltale signs they are going to get ripped off either in-person or online, such as someone using multiple cards to make a purchase. They should check all the names on the cards – if they are different, red flag; check shipping addresses – do not ship to mail box stores, office suites, etc.; get AVS and CVV2; and look at sale sizes.
  4. We make sure we are available to answer questions, and we start sending them info about the holiday season starting in the beginning of October, including fraud reminders and ways to identify fraud. We also make sure merchants order additional gift cards now and not wait until the last minute.
  5. We always suggest selling gift cards – it's been the No. 1 gift for years – and watching for fraudulent activity. More then ever, bottom lines are tight; they can't afford to lose money.

    The average merchant can't compete against Amazon. They have to get creative. We send out info about fraud and about doing promotions. Retail is shrinking. I see more and more shopping centers going up, but in the end they are all starting to look the same: a lot of restaurants and chain stores, fewer mom-and-pops, and now a lot of service type businesses (no inventory ) for example, realtors, insurance offices, doctors, etc., going into shopping centers instead of into traditional office space.

Steven Feldshuh, Merchants' Choice Payment Solutions East

When it comes to the holiday season, shoppers will continue to purchase the gifts they need for family and friends and will also purchase some items for themselves because these items have been drastically reduced. The holiday season seems to expand each year, with sales before Black Friday or Cyber Monday.

Some people enjoy the art of shopping on Black Friday and are convinced by the onslaught of ads that they have to go on that day. But for many shopping on Black Friday is substituted by shopping the sales whenever they are offered.

Each year, it seems there is a small sales growth for the season. Some large department stores may see declines due to the growth of discounters and off-price centers, but upscale department stores still get the crowds coming in. Sales at outlet stores continue to grow simply because people perceive they are getting established brand name at a discount. But most of us in the ISO world do not have these large, multidepartment or discount chain locations in our portfolios.

What we see is an uptick in people eating out at healthy fast-food places, sit-down dining and small-plate restaurant-bars. Though people say they are health conscious, the sit-down pizza restaurants, hero shops and burger joints seem to be doing well. Business during the holiday season for these food establishments does pick up, because more people are on the street shopping.

We are also seeing some growth in specialty food markets, and new business additions such as vape stores, creative gift stores and better retail stores. We also see some growth in wine stores in better neighborhoods.

There seems to be a movement toward small POS systems versus terminals, but we have not witnessed that movement leading to greater sales for merchants. We’ve seen more requests for online ordering, but that growth seems to be based more on cold or inclement weather than anything else. When the weather is bad, people tend to shop more online.

There is a value in being able to compare items online and get the goods shipped straight to your home or office (and the pioneer in this regard, Amazon, is hurting everyone). The bigger players such as department stores and discount chains can offer online ordering and pick-up or return at one of their brick-and-mortar locations. The smaller businesses we service may have an online presence, but their out-of-state shoppers still need to mail back something that they don’t like or doesn’t fit, versus coming in and possibly purchasing something else.

If the economy remains in good shape and people believe they have accumulated more wealth, they will shop more. A typical family has a certain amount they plan to spend. Small businesses can gain customers if they are creative, offer good value and offer products the large players do not.

What merchants can do to increase business is typically determined by their budgets. A good investment is to get a website. Offering gift cards is another good idea. And changing window displays routinely is a must. Having salespeople who are courteous and, most important, knowledgeable also helps.

I’ve found that some agents tend not to speak to old clients because they are too busy going after new clients. Another issue is that often when you suggest things to a business, they either do not have time to listen or they take offense. We aren’t professional merchandisers, but we recognize common pitfalls; it would behoove them to take some advice.

Justin Milmeister, CPPElite Merchant Solutions

  1. There is no doubt “the season” today is not what most of us grew up experiencing. The competition for consumers’ dollars is as fierce as it has ever been. Every year the season starts a little earlier than the year prior. It started with retailers opening at midnight on Thanksgiving as opposed to the morning after, which was named Black Friday. Now, it is commonplace for retailers to be open all day on Thanksgiving with big sales and incentives previously reserved for Black Friday.

    Now, I am seeing advertisements to get your holiday shopping done even earlier, pushing the start of the season up even more. Although the season is getting pushed up further and further each year, the core will still always be from Thanksgiving to Christmas. Merchants will always see spikes in sales during this time; they will just be a little less dependent on this period making or breaking their annual sales, which has been the case in the past.

    Consumer shopping experiences and expectations have changed tremendously over the past decade, and year over year, the line between retail and online shopping becomes more blurred. Retail always had an advantage for those who wanted their merchandise immediately and didn’t want to pay shipping charges.

    Shopping on Amazon, you now have options to get merchandise the same day if you order before a specific time. Further, more and more online stores are eliminating shipping charges, especially for orders above a certain amount. With respect to payments, there are far more options now than just credit cards to purchase goods and services. It will be interesting to watch new payments evolve and which ones stick with the consumer and take market share from the card companies.

  2. My wife’s credit card bill notwithstanding, I worry that our traditional brick-and-mortars will continue to lose sales to online e-tailers and force them to close stores and, of course, cut jobs, which affects the economy as a whole. Recently, Toys R Us filed for bankruptcy protection, citing online competition in addition to other reasons. Unfortunately, this trend will continue and it is highly concerning.
  3. One thing we are implementing for our busier brick-and-mortar clients is tablets to accept payments. During the busy holiday season, this allows staff to check customers out throughout the store instead of having lines build up at one register. Utilizing this system, our clients will realize more sales as people like myself, who typically would leave the store if they see a long line at the point of sale, can now quickly check out without the hassle of waiting in a long line.

    In terms of entering into new partnerships that help merchants better serve their holiday shoppers, we are always trying to stay ahead of the game and find premium solutions for our customers. The last thing we want to hear is a client moving to another payment provider because of a product offering we don’t offer. We have initiated several partnerships with vendors this year that offer our customers a wide selection of products and services to meet their unique needs.

  4. As the holiday season approaches, we have clients who throughout the year may process $10,000 to $20,000 in payments monthly who suddenly are processing several hundred thousand dollars per month during the holiday season. Although large spikes in processing are expected and accounted for, it still can’t be ignored simply because it is the holiday season. We work extra hard during this time to prevent or at least mitigate any interruptions to our clients’ processing attributed to these large spikes.
  5. When we are given the opportunity to assist merchants with lagging sales especially during the holiday season when they should experience a spike, we offer several solutions to generate more sales. We have several relationships with marketing companies that have proven track records of increasing sales in specific industries.

    We have some great testimonials from clients who have utilized these services, which have paid off in a big way for them. We have found marketing efficiently through social media platforms has yielded the best results for our clients at a very cost-effective rate. The companies we have relationships with have posted tremendous results for our clients. It becomes obvious very quickly that effective marketing is best reserved for the experts. The ROI can be enormous when done right and disappointing when done wrong.

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

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