Chinese Store Association Urges Cuts in Transactions Fees

The China Chain Store and Franchise Association (CCFA) on Sunday urged the government to pass plans to cut bank card-swipe fees charged to merchants as soon as possible in order to shore up consumption.

Secretary-General of the CCFA Pei Liang told Xinhua that a proposal for cutting card-swipe charges issued by authorities is currently seeking opinion from commercial banks.

“China’s retail sales growth has slowed from a year earlier, so the government should step up the implementation of the plan with a view of promoting consumption,” Pei said.

Data from the statistics bureau shows the country’s retail sales of consumer goods expanded by 13.2 percent year on year in August, down from a rate of 17 percent last August.

At present, fees charged to supermarkets and stores for transactions made with bank cards range from 0.5 percent to 1 percent of the transaction value.

Transactions made with bank cards are growing at an annual rate of 30 percent, and bank card transactions currently make up 35 percent of all supermarket transactions and more than 60 percent of all sales in stores, according to a survey conducted by the CCFA.

However, Chinese merchants are seeing their operational costs growing at an annual rate of more than 15 percent and their average profit margin is around 2 percent, according to the survey.

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Retail chains adopt prepaid cards to retain customers

Prepaid cards have become the latest retail tool to keep consumers hooked to brands. They offer convenience and safety, because customers don’t have to carry cash, and they often come with a variety of offers, including discounts.

Brands like Café Coffee Day, Pizza Hut, Provogue, Kaya, Fastrack, Gili and a host of others have launched prepaid cards. A prepaid card works like a debit card with a PIN number that can be redeemed at the brands’ outlets. The cards in India are based on the closed loop model — that is, they can be redeemed only at the brand’s stores. “When I have money loaded on the card, the tendency to come to the same place is higher,” says K Ramakrishnan, marketing president at Cafe Coffee Day. The brand’s card Cafe Moments, launched this month, offers a 5% bonus on cards with a value of Rs 100 to Rs 499, 7% on Rs 500 to Rs 999 and 10% on Rs 1,000 and above.

A prepaid card obviates the need to pay cash every time, and it also enables faster accumulation of bonus points or other offers. Prepaid cards in India are currently being used more as gift cards. Some brands have used it to launch a promotion or a service. What the prepaid gift card did for Kaya was to generate incremental walk-ins,” says Suvodeep Das, marketing head at Kaya Skin Clinic. In Kaya prepaid cards, currency can be reloaded in multiples of Rs 500 to up to Rs 2 lakh. Kaya sells about 250-300 gift cards a month.

Global Prepaid Exchange recently estimated that the size of the organized prepaid gift card and gift voucher market in India is Rs 2,000 crore and would grow to Rs 8,000 crore by 2015. “The acceptance of gift cards in proportion to vouchers has increased significantly,” says Pratap T P, chief marketing officer at QwikCilver Solutions, a provider of prepaid card solutions.

However, Devangshu Dutta, CEO of retail consultancy Third Eyesight, says growth in prepaid cards would be restricted by the fact that they can be used only at a particular brand’s outlets. “Also, a customer cannot claim the minimum residual value in the card. He will have to top it up to redeem it,” he says.

WalMart leads latest m-payments initiative

Store giant joins with two dozen US retailers to take leadership of NFC wave away from Google and Isis

Mobile payments’ progress has been held back by the sheer number of vested interests battling to take the upper hand in driving the platform. This is seen best in the US, where the main parties each have one or more initiatives – three of the top four cellcos in Isis; Google Wallet; schemes led by the credit card giants such as Visa; and separate programs by PayPal and others. Now the retailers, too, want a say, and about 25 stores, including Walmart and Target, have formed a consortium to develop their own m-payment system.

According to a report in the Wall Street Journal, citing several unidentified sources with direct knowledge of the deal, the retailers are eager to limit the influence of either Google or the operators in this area. They would have various advantages in bringing store-based mobile payments, such as NFC-enabled systems, to market. They have an existing trusted brand for consumers, and would get round one of the major blocks in NFC’s path – merchant indifference or unwillingness to deploy terminals.

There are few details as yet, but Target said in a statement to the WSJ: “We are exploring potential solutions that would help us to deliver the fastest, most secure mobile-payment experience possible for our customers.”

However, Google claims 22 large US retail chains now support its Wallet initiative, even though that suffered recently from security issues, and is available only on the Sprint network and the Samsung Galaxy Nexus handset. Google is working with MasterCard and its PayPass network, while Isis is working with most of the major card processors, including Visa, MasterCard and Amex, and will start trials of its services this year.

New Stop & Shop concept store opens in Chelmsford

New Stop & Shop concept store opens in Chelmsford with following convenience options:

An on-site nutritionist: The company has hired a professional nutritionist who will be available for consultations. The cost, according to Robinson, will be $25 an hour, but the customer will get that $25 back in the form of a gift card.

Day care services: Stop & Shop is introducing “The Tree House” – a room where supervised day care is provided for up to 90 minutes for free, for children ages 3 through 9.

Curbside pickup: Customers will be able to order groceries on a computer and pick them up at the store without leaving their cars. They can pull up to a designated curbside pickup area where a Stop & Shop employee will process the payment and load the shopper’s car.

Retail apps have fuelled mobile payments growth

The gross merchandise transaction value of mobile payments for physical goods will exceed $170 billion worldwide by 2015, according to a new report just released by Juniper Research Entitled ‘Mobile Payments for Digital & Physical Goods – Analysis, Markets & Vendor Strategies 2011-2015′, it forecasts that this will be nearly treble the $60 billion predicted for 2011. Significantly the report says that initial growth in mobile payments has been fuelled by a dramatic upsurge in retail apps in the wake of the consumer smartphone explosion. The sort of iPhone and Android apps plus mobile-friendly web sites that GoMo News has frequently covered in the past. The report cautions, however, that vendors still need to innovate unceasingly as the market develops and becomes more competitive.‘Our research for this report underlined the importance of mobile as an extra channel to market,” David Snow, a senior analyst with Juniper Research, observed.

“But Juniper believes that mobile campaigns must be tightly linked to print, online and store based campaigns to ensure consistency of customer experience.

Increasingly people will browse on one device such as a PC and then buy from another such as a smartphone,” he added.

The report found that there was an increasing awareness in the industry of the need to enable an integrated shopping experience within the wider context of a fast expanding e-commerce market.

Other key findings from the research are that the market will gain further momentum in the medium term following the increasing deployment of POS (point of sale) solutions to facilitate in-store [NFC-style] cashless transactions.

It also identified a major industry benefit – namely that retailers have discovered a marked uplift in average transaction value when cash is replaced by a mobile payment method.

In the report there are of some 17 mobile payments vendors and offers guidance for readers to pinpoint their strategies.

Look customers in the eyes to lock them in the aisles.

Shopkeepers adopt the hard sell with some tailored software, writes Mark Russell.

IN THE film Minority Report set in 2054, a brewer’s advertising billboard identifies Tom Cruise’s character, John Anderton, through a retinal scanner. As he walks past, the billboard calls out: ”John Anderton! You could use a Guinness right about now.”

Far-fetched? Not according to retailers who believe this type of targeted advertising may well be the future of shopping.

New York company Immersive Labs is already using built-in cameras and facial recognition software in its outdoor billboards to determine the gender and age of passers-by so it can customise the advertisement on display to suit them and prompt sales.

So if a man strolls by on a cold morning, the display might change from an ad for women’s clothing to an advertisement suggesting a cup of coffee at a nearby cafe.

As Australian online shopping – expected to be worth $21.3 billion this financial year and $30.8 billion by 2015-16 – continues to threaten bricks-and-mortar businesses, retailers are using the latest technology, combined with social media, including more shopping apps, to lure customers back into their stores.

German shoemaker adidas is planning to install touch-sensitive display walls in stores from next year. The virtual footwear wall will allow customers to view the company’s entire range of 4000 pairs of shoes. If a customer likes a particular shoe the store will order it in.

Two cameras above the screen will watch shoppers’ reactions to determine which shoes are most popular. And like other companies, adidas is also gathering feedback by encouraging customers to use Facebook and Twitter to review its products.

Brisbane company Yeahpoint believes its MiMirror creation is the missing link between instore shopping and social media that will revolutionise fashion retail.

MiMirror is a touch-screen display with a camera that acts as a mirror and takes up to six photographs of customers in outfits they are considering buying. The shoppers then email the images to friends or post them on Facebook to get a second opinion.

No retailers have installed the technology yet, but the company is confident major stores will buy the device in coming months.

”The factors driving retailers’ decisions for the future are basically that the cost of business continues to increase and competitiveness in the retail environment is being challenged by the online market,” Yeahpoint’s John Anderson says.

”On the flip side, you have the time-poor consumer who wants to have a much more friendly, fun shopping experience.”

Sean Sands, of Monash University’s Australian Centre for Retail Studies, agrees, saying many consumers are bored with traditional retail and the only way to lure them back into stores is to offer the latest technology linked to social media.

A recent report released by the centre found that online shopping was creating tougher in-store customers because they were ”better informed due to the power of the internet”.

Half the population now research their purchases online before setting foot in a store.

Many are also armed with a wide range of shopping apps that can be downloaded on to iPhones, iPod Touches, iPads and other tablets and smartphones, that allow them to hunt for the best deals.

The RedLaser app, for example, allows instore shoppers to scan the barcode of an item to get the price and then checks online to see if it’s cheaper elsewhere.

Supermarket giant Coles’ ShopMate app, which notes specials and lets you cross off your shopping list as you go, has been downloaded 400,000 times.

Rival Woolworths does not have a shopping app but has one to locate missing trolleys.

Woolies’ app-lessness is not likely to last, however, as retailers respond to consumer demand.

Russell Zimmerman, of the Australian Retailers Association, says ”every retailer has to be in the online space in the foreseeable future” or they won’t survive.

According to PayPal, 8 million Australians buy goods using the internet, and one in 10 buy them with their mobile phones.

Google Australia’s head of retail, Ross McDonald, says this increasing use of mobile phones to search for stores and products has become a noticeable trend in the past six months.

Previously, 95 per cent of online traffic for shopping searches was from computers but 16-18 per cent of online inquiries were now from mobile phones. ”What we advise retailers is that it’s not so much about the app but making sure you are visible on a mobile device when someone searches for you,” he says.

Jo Lynch from Myer – which has an iPhone app that lets you peruse and buy goods with a tap of your finger – says the company expects its online business to generate sales of $5 million for 2010-11 and be worth up to six times that in the next few years.

David Jones’ Brett Riddington says the future of shopping is all about multi-channel retailing. ”Many customers will still want to go in-store to physically see the goods after checking them out online, but we need to make that a more entertaining and engaging experience,” he says.

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