Another wild week in payments and commerce — perhaps one a bit wilder than usual as the week kicked off with a commerce holiday dedicated entirely to buying Star Wars merchandise and will conclude with cryptocurrency Doge Coin’s value potentially going “to the moon” this weekend when Elon Musk makes an appearance as host on Saturday Night Live.
But beyond the light saber flash sales and the big crypto rally forecasts that have dotted the news cycle this week, the bigger story captured in all the smaller narratives this week is one about rapidly expanding and evolving opportunity across the landscape, sticky.io CEO Brian Bogosian told Karen Webster when he dropped in for the latest edition of The Week In Payments.
“What we see on the whole out there is just a bevy of opportunities — ways we can provide better service to consumers, ways that we can provide better information, better easier checkout experiences and more flexibility,” Bogosian told Webster.
And this week, that ongoing march forward was carrying on apace in the U.S. and around the world as we saw same-day delivery continue to surge, the EU announce plans to throw its hat into the mobile payments competitive ring and the consumer packaged goods industry continues its ongoing post-pandemic evolution into direct-to-consumer (D2C) commerce. And these kinds of changes, Bogosian noted, are going to keep on coming fast, because as a whole the entire world post-pandemic is “looking for all kinds of ways to be able to improve that end- to-end commerce delivery of products and services.”
The Great Same-Day Delivery Surge
Once upon a not so very long time ago, it was considered reasonable and even desirable to have an online order delivered within two days. That two-day gold standard, set by Amazon Prime, in fact defined consumer expectations of “fast” eCommerce delivery as recently as 18 month ago.
But now, a two-day waiting period might as well be two weeks long as the pace of the market picks up — Walgreens rolled out same-day delivery for prescriptions this week, while Square and DoorDash announced taking on same-day alcohol delivery this week.
All pointing to the fact that the inevitable pace for the entire field going forward, Bogosian said, will simply be faster.
Now, he said, “if you want something – you’ll want it within an hour or two hours of placing the order. And so I think this will force logistics systems and warehousing to be done a bit differently to provide for that last mile of delivery from a variety of these different source locations.”
That, Webster and Bogosian agreed, might just end up being good news for physical stores, serving as those last-mile delivery hubs to provide for those super-quick delivery windows of the future. Which, Bogosian noted, isn’t going to be necessary for every product. The rise of subscription services, he said, demonstrates the counterbalancing urge among consumers to put their digital orders on a predictable schedule.
But he noted, sometimes and increasingly for a growing share of consumers, only right now will do — and the growing ability of the market to deliver to that highly immediate need is going to become an increasingly critical competence for commerce players of all stripes going forward.
“I think it will provide for greater traction among merchants among consumers, and I think this whole idea of delivery and … convenience is something that’s going to continue in our life. I mean, we’ve seen it in this virtual economy, we’re trying to be as efficient and productive as we can. And a lot of us have been more productive during the pandemic and, you know, strangely enough, I think we recognize the value of our time,” he said.
The EU’s Payments Play
Also snapping up headlines this week is the announcement by the European Payments Initiative (EPI) that it is looking to create a payments firm that can take on some of the biggest U.S. FinTechs and payments companies.
A move Webster questioned, noting that it seems the EU needs to come to the table with more of a definitive reason and consumer problem to solve than it has at present. The problem the EU is trying to solve, she said, doesn’t seem to be the consumer’s but its own issue with being left behind by large use payments layers.
“It reminds me a little bit of MCX back in the day that, you know, retailers formed their own alliance to try to put together their own payment system. It’s a lot harder to get that off the ground than than it looks,” she said.
Bogosian agreed, but was more optimistic about the changes, noting that Europe has been home to payments innovation like the EMV card and contactless payment well in advance of the U.S. in the past — and there is every reason to think it can make innovative contributions to the ecosystem based on specialized knowledge of its unique needs. It is far from a lock that the EU can do it, he said, but it’s not exactly an impossible goal.
“It depends on who’s among that syndicate of companies that are in there. And if they have enough startups and a young intellect, that’s bringing fresh new ideas to the idea of making frictionless payments,” Bogosian said. “I think that could contribute something to the conversation if they really do it right.”
And doing it right led to the final topic of discussion for the day.
CPG’s D2C Future
Direct to consumer (D2C) news was humming this week as it Circle K rolled out its coffee subscription program and an earnings report from Kellogg’s revealed that direct-to-consumer eCommerce was some 9 percent of its $13 billion in sales.
All pointing to a reality that is coming for every consumer packaged goods (CPG) brand, Bogosian said, whether they see it yet or not.
“I think almost every single CPG is going to need to establish a direct to consumer channel. Their omnichannel strategy will include some of their brick-and-mortar and other channels that they have today, but there’s no question that the direct to consumer approach is going to be, I think, absolutely critical for all of these CPGs,” he said.
Because he noted, with that direct line to their consumers comes the thing they want and need most, the thing that they lose when they simply decamp to the Amazon marketplace to sell their goods — data. It’s why, he forecast, D2C is eventually going to be the biggest piece of CPG sellers’ business — because it will be the channel that best positions them to understand what their customers want and need — and how to expand their offerings to them.
“Data’s critical. It’s fundamental to everything because a successful online strategy has to include an intimate, deep knowledge of the person that you’re selling to, that you’re servicing, and that you’re providing a benefit to,” he said. “I think the data is really important. Ultimately, the goal is delighting consumers with products and services and bundles and packages that they feel meet their needs and provide real benefit to them.”
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