This interview with Jim Macari, director, Emerging Payments & Loyalty, Phillips 66, originally appeared in the August 2019 issue of NACS Magazine. It was brought to you with support from Phillips 66, a NACS member.
Disruption is the buzzword these days, with many convenience retailers doing all they can to navigate consumer demands, harness new technologies and plan for the future. As you observe today’s business climate, what trend do you see having an inordinately strong impact?
There are several significant trends beginning to disrupt convenience retailing today. Consumers continue to demand faster service, more convenient ways to purchase goods and services, and to be rewarded for their loyalty to the merchant and brand. And, of course, safety and secure ways to pay are an expectation.
We are already seeing the definition of convenience being significantly modified. The lines are beginning to blur between c-stores and other verticals that not only sell the same products but deliver them to front doors of homes in an hour, or as recently announced—to the home refrigerator. Lately, we are seeing curbside pickup and restaurant food and traditional c-store products being delivered within the hour as well. “Most of these purchases are being ordered with a smartphone, which consumers are interacting with more than 3.5 hours a day,” according to eMarketer.
We need to also consider the growth of connected cars. Consumers will expect their convenience store to be able to accept fuel and convenience product orders and payment from their car, while delivering their loyalty points and discounts in one seamless transaction. Auto manufacturers are quickly moving to provide these value-added services in their automobiles, so it is important that the mobile solutions are in place at convenience stores. For retailers to be successful in the future, they will need to meet the expectations that today’s consumers are establishing.
Millennials, in particular, have almost universally embraced mobile payments.
Yes, millennials are leading the way and are expected to wield more than $1.4 trillion in buying power in the next couple of years, according to Accenture, leading all other generations. They have grown up with smartphones and use them to organize their lives—from setting a daily alarm and keeping in touch with friends, to researching and shopping online and banking. This important generation expects to engage with their favorite merchants and brands for information, promotions and loyalty, but millennials prefer not to directly interact with salespeople or wait in lines. Implementing mobile consumer engagement programs, not just mobile payments, will be important to satisfy this significant generation.
There seem to be added benefits besides satisfying consumers and increasing store traffic. Isn't mobile a safer way to pay?
I can’t speak for all mobile wallets, but our developer, P97 Networks, has worked hard on making our My Phillips 66®, My Conoco® and My 76® apps as secure as possible. There are no credit card skimmer concerns when using a mobile app. Our apps also do not store primary credit card account information on the device, nor is it transmitted as the transaction is fully tokenized. Fraud is something that must be considered and studied continuously since fraudsters are working hard to beat the system. That’s why it is important for convenience store operators to have branded partners like Phillips 66® that heavily invest in these areas.
For retailers on the early stages of embracing mobile or those that might lack resources, the idea of a mobile wallet might seem daunting. Is this still a space they can play in?
I believe it is getting easier. There are companies like P97 Networks that work with retailers of all sizes on mobile solutions. The EPOS providers are adopting Connexus standards that eventually will allow for improved solutions and simpler integrations of other third-party payments and programs. Our solution makes it easy to offer mobile pay with technology our customers already have—no expensive hardware investments are required. There really is no excuse not to move forward.
If retailers are not actively thinking about mobile today, where does that leave them for tomorrow?
Frankly, I believe they will struggle. We must make the purchase experience simpler, faster, more secure and of higher quality. Mobile payments, loyalty, targeted offers based on consumer preference will be a requirement, not an extra “nice to have.” Pre-order/pre-paid capabilities will be important both from the mobile phone and from the connected car, using expanded voice services like Amazon Alexa to avoid distracted driving and simplify the experience. While these market changes all seem daunting, the convenience store industry has always been quick to innovate, quick to adapt to changing consumer preferences, and it can still provide a positive experience that provides competitive advantage and keeps consumers coming back. Now is the time to get moving and innovate.