How Merchants and Payment Networks Can Work Together to Transform Shopping

Ninety percent of e-grocery customers will continue buying food online even after the pandemic. What does this shift mean for other merchants and their payment networks?

It’s the end of a long day at the office, and you swing into a pharmacy on the way home to pick up toothpaste. You’re not out yet, just running low and being proactive. 

You grab your favorite brand and head towards checkout. The line there stretches far back, everyone making the same “quick” post-work trip you are.

You look at your single item. Is it worth the wait?

Not today, you decide. You leave the tube behind and walk out the door, abandoning your purchase.

According to surveys, 15% of consumers would make this same in-store decision after just a 1-minute wait time in line. However, 61% agreed that a self-checkout option would keep them from abandoning these purchases.

For brick-and-mortar merchants, the need for streamlined shopper experiences goes beyond checkout lines. Thanks to digitization, consumers are accustomed to ever-increasing speed and efficiency while shopping and conducting transactions. Patience for lines, product research, and time spent in-store is dwindling.

Need proof? Just look at grocery delivery. Ninety percent of today’s e-grocery customers expect to continue buying food online when the pandemic is over. Nearly as many of these e-shoppers cite convenience (61%) as COVID-19 concerns (62%) as their reason for using the services.

For payment networks, there’s a major opportunity to support brick-and-mortar merchants as they adapt to new consumer preferences for digital shopping.

Fintech Reduces Long Lines and Time Spent In-Store

Perhaps the most prominent example of digitization changing the in-store shopping experience is Amazon Go. With an Amazon account and the company’s free mobile app, shoppers can walk into an Amazon Go or Amazon Go Grocery store, pick up whatever they need, and walk out. Their Amazon account is automatically charged for the items they leave with—no lines, no checkout.


Amazon Go works with the help of artificial intelligence (AI), computer vision, various sensors, and the company’s own fintech capabilities. And while it’s easy to feel like the tech giant created a digitally-enhanced in-store shopping experience that’s out of reach for traditional merchants, that’s not necessarily the case.


For example, in light of social distancing guidelines and the need to limit how many people are inside a store at a given time, most merchants are currently trying to create “virtual lines” for their customers. Like OpenTable restaurant waitlists, but for car dealers and department stores, too.


At Kunai, we created such a waitlist for a major automotive manufacturer and retailer, and built in ways to keep customers engaged as they wait. Once shoppers join a virtual line for their turn to enter, they are able to browse in-store items on their mobile phone while they wait outside or in their cars. If they see something they like, they are able to select products and have it waiting in store for them when they receive a notification that it’s their turn to enter. Coupled with contactless payment, customers hardly have to touch anything in the store, yet they enjoy the streamlined, wait-free experience pioneered by big tech retailers.

Where Do Payment Networks Fit In?

For merchants that can’t afford to create their own version of Amazon Go from scratch, the most obvious place to turn for in-store fintech is the financial institutions—the payment networks and processors—they’ve always relied upon to connect with consumers. 


Digital wallets are one such technology that can help pave the way. Onced stored digitally, card information can be used for payments in-store, online or even from the parking lot. This supports merchants by giving consumers the tools they need to shop faster using a store’s app.


Financial service providers can also help reimagine loyalty by linking in-store rewards accounts to specific credit cards. Any time a customer makes an in-store purchase with a linked card, they can earn rewards—no phone number or loyalty card barcode required. This increases loyalty to both the merchant and the card provider.


Perhaps most promising, however, is the ability to allow any merchant to use virtual cards to create products like store credit cards the same way big retailers do. Store credit cards provide merchants with agility and valuable data. This data is used to offer discounts and programs that increase customer loyalty, but can also be used to create lines of credit that provide customers and merchants with more flexibility before, during, and after transactions.


For example, Wal-Mart, Lowe’s, and even Amazon use virtual cards provided by Synchrony Financial to create credit accounts. These credit accounts allow customers to make purchases where they effectively can buy now and pay later, use points to pay for items instead of credit, or finance purchases over time.


If a bank or financial service provider has brick-and-mortar clients looking to extend credit to their customers the same way, providing virtual card capabilities opens the door to a completely new opportunity.

The Need for Transformation is Already Here

COVID-19 didn’t create the need for in-store transformation, but it certainly accelerated it. Brick-and-mortar sellers can’t afford to ignore technology’s growing presence in their industries. Those that do risk losing customers to more convenient competitors.


As merchants navigate consumer demand for streamlined shopping experiences, their financial institutions can support them with agile digital tools. Experienced fintech solution providers can build entire digital shopping experiences from cart creation to checkout that support in-store purchases.


With the right partner, payment networks can forge a seamless connection between ecommerce and brick-and-mortar to benefit their customers. Reach out to us here at Kunai to learn how.



Sandeep: Tell me a bit about the early part of your career.

Tom: I spent a decade helping to build start-ups focused on application and database software. This was where I learned how to sell and do business development. I was fortunate to be part of one company going public and another being sold to IBM.

Sandeep: What is something you learned during this time that helped you with consulting?

Tom: I began to appreciate how different customers achieved varying levels of success with the same foundational technology. This made me understand just how critical getting your team and process right can be.

Sandeep: This is something I only came to appreciate years into consulting, especially after the sale of my first consultancy to Capital One.I saw teams in different parts of the company trying to solve challenges like real-time messaging. Same corporate culture, same technology, same internal support mechanisms. Night and day outcomes.

Tom: We saw a lot of the same thing after selling our practice to EMC (sold to Dell in 2015). This is probably the thing I'm most proud of when it comes to the teams I've helped to build: the ability to perform well in a variety of contexts, sometimes in ways that inspires the client team to up their game as well.

Sandeep: Yes. It's particularly cool to see your team succeed in individual ways after an skills definitely translate into the corporate environment.

Tom: Totally. We have people who've stayed on at Dell and risen up the ranks, while others took the opportunity to become successful executives at other Fortune 100 companies....or to start their own agencies and startups.

Sandeep: We've both been around a while. My first consulting project was a Y2K thing for Cisco back in 1998. You've been around a little longer than that :). How do you think consulting has changed most during the past five years?

Tom: I think because there is so much infrastructure available now, consulting has become more delivery and outcome-oriented. A better blend of strategic and tactical. Public Cloud has also enabled velocity to increase at a pace unfathomable 5 years ago.

Sandeep: What has stayed the same?

Tom: It's still mostly about people. People who thrive on change and are focused on their personal and professional development. I love that this has not and will not's what I love about consulting.

Sandeep: I know you're adjusting your work style to COVID. You're still a dude who clearly prefers to drive an hour for a socially-distanced hike or outdoor meeting over Zoom any day of the week :) But personal styles aside, what is specifically compelling about a remote agency during the era of COVID?

Tom: Kunai has been remote for years, which gives them an inherent advantage. There is something about the communication and management styles that just works in a way that other organizations are still figuring out.

Sandeep: Yeah, I think what a lot of people fail to realize is that remote work isn't just office work over Zoom. it's an entirely new paradigm. There needs to be an understanding for asynchronous efficiency...and this just takes time and effort to develop. How do you approach remote work and family? What are you learning about separating work and personal time?

Tom: No matter what the form of interaction, Focus. Be present. Quality over quantity. The best weeks are the weeks where I proactively schedule work and personal time. Neil (Kunai's Head of Delivery) shared a great quote with me "With discipline comes freedom." When I am proactively addressing the majority of my professional and personal commitments, I find I earn a little flexibility. A little freedom.

Sandeep: Tell us about a business hero of yours that I may not have heard of before.

Tom: Paul O'Neill is someone you may not know. His work in both the public and the private sector created a profound impact

Sandeep: We are both over forty years old :). How have you learned how to work smarter during the past decade or so? What do you wish you knew about consulting when you were 25 that you know now?

Tom: Consultants want to make lasting change. Lasting change is often not the act of a single person. Today I work much harder bringing others along on the journey.

Sandeep: Last question. What are you doing here? :) Why join a small consulting company this late in your career when you could have a cushy job somewhere else?

Tom: I love a good challenge personally and professionally. When I turned 40, I decided I would run a 10K every Thanksgiving weekend and try to have my finishing time be less than my age. With the exception of one year where I did not run due to a health issue, I have met the goal. I also recently completed the Leadville 100 Mountain Bike race. So, I guess I'm here because I'm a glutton for punishment :) Jokes aside, our customers have a job to do and I intend to put Kunai in a position to execute flawlessly on their behalf. I love committing jointly to audacious goals for our customers and our business.

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