Blog: Physical and Digital Products In-Store Pack a One-Two Punch
By Thomas Cornelius, SVP, InComm
Today’s consumers are constantly on the go—they’re busier, they multitask more and they have less time to get everything done. As a result, their shopping habits have changed. In fact, according to Forrester, more than 50 percent of in-store retail sales (approximately $1.2 trillion) are now Web-influenced. To meet the needs of this new smartphone-carrying, constantly connected consumer, retailers are innovating to provide solutions that respond to their evolving needs.
One innovation we’re excited about is the combination of physical and digital prepaid products in-store, which gives consumers ultimate choice and provides increased sales opportunities for retailers. Prepaid displays are an integral part of many retailers’ in-store offerings. Housing a wide variety of gift cards, including wireless, gaming and financial services products, these displays provide a number of self-use and gifting products in one destination. Now, with a world gone digital, consumers should have more options for buying what they want and retailers should have more opportunities to provide their customers with personalized shopping experiences in-store. A combined physical/digital prepaid offering caters to everyone—those who want physical cards and those who seek the convenience of virtual products.
For retailers that may have limited space, virtual prepaid products enable them to offer more inventory without expanding their footprint and can help safeguard against out-of-stocks. They also can capture impulse buys via a simple smartphone engagement with an existing prepaid display or in-store signage, which enables consumers to look through a catalog of virtual items, choose one (or more) and pay for it at checkout.
Turning physical prepaid cards into digital cards and making them available in brick-and-mortar locations opens up opportunities for completely new product categories retailers can offer to their savvy consumers, including music downloads, movie rentals, e-books and even software products. Plus, leveraging the existing POS activation rails means retailers don’t need to worry about making any technical changes.
Here’s how the consumer shopping experience works: a consumer browses a gift card display, trying to decide which card he wants. Then, he spots a sign detailing digital options. With his smartphone, he can text a short code, enter a URL or scan a QR code found on the signage, taking him to a retailer-branded mobile web page. Next, he taps on the digital card or content he’d like to purchase. Once he selects the product he wants, a product barcode appears on his phone. He takes his phone to the register and presents the barcode to the cashier, who scans it like any other physical merchandise. Once the customer pays for the virtual item, he can save it on his device to use later or send it immediately via email as a gift.
While retailers gain additional sales at the register, card partners benefit too, as they pay little to nothing for digital stock and gain entrée into new store locations that may not carry their physical prepaid products. Or, they can augment an existing offering with additional denominations.
Consumers have unlimited options for purchasing the goods they want, when and where they want them. Whether it’s a new song from a favorite artist, a newly released movie or funds to use at a favorite restaurant, they can immediately access that content/value after paying at the register. For shoppers seeking a last-minute gift, they simply send the content/value to a friend via their smartphones.
Thomas Cornelius is a senior vice president at InComm, focused on the convergence of online and offline sales. In 1997, he started an e-commerce platform for retail merchants, developed the first largely available mobile e-commerce application and pioneered contextual online commerce. In 2009, Cornelius founded Adility to enable online-to-offline commerce, turning online purchase intent into measurable offline retail transactions. InComm acquired Adility in 2012. Cornelius can be reached at [email protected].