Takeaways from Isracard prooVday 2017: Customers Expect a Frictionless Experience

The retail industry is undergoing rapid transformation, largely due to a shift in perspective regarding the importance of customer experience.

While customer experience used to be a retail-only problem, the transition consumers made to the digital world has changed the marketplace and positioned FinTech companies as a crucial aspect of the customer journey. As a result, financial companies need to focus on improving the customer experience to ensure that they remain relevant in the eyes of the retailers and consumers, creating win-win situations for both.

So how can companies do that? Two words: reduce friction.

To further examine the importance of creating a frictionless shopping experience, we partnered with Isracard, a leading credit card processing solution, to explore the ways technology, partnership and innovation can improve the overall customer shopping experience.

It all came together at the second annual Isracard prooVday event on December 6th, 2017, with enterprises, startups and industry experts sharing one stage and exchanging many ideas on how to move the customer experience forward.

Read on to see our key insights and discover what Isracard prooVday 2017 was all about!

Why Payment Processors Care About Customer Experience

Ron Weksler, CEO of the Isracard Group, gave us the payment processors’ perspective on the importance of the customer journey.

Isracard caters to 100,000 businesses and more than three million private customers in Israel alone. Their market dominance as a payment process has made them hyper-aware of the importance of building client relationships.

Isracard has partnered with startups, accelerator groups, customer clubs and more in an effort to improve the overall shopping experience for their customer. But just as important, according to Weksler, is their ability to collect information about the customer journey.

Today Isracard is focused on using data to provide a seamless ecommerce journey. That is where, according to Isracard at least, their collaborations with startups and entrepreneurs comes in.

By turning to the targeted innovators who are searching for ways to solve individual pain points, payment processors such as Isracard will be able to better understand their impact on the entire ecommerce process, including the customer experience and consumer journey.

Leveraging Technology to Create Value for Customers

The FinTech space is experiencing a new wave of data analysis that challenges the way data is collected and processed. Companies such as tax, auditing and consulting agency KMPG know this first hand, and their FinTech division has narrowed their focus on creating value for clients through smarter use of data.

Dorel Blitz, Head of FinTech at KPMG , joined us at Isracard prooVday to shed light on how the FinTech industry is leveraging technology to improve the customer shopping experience.

The online shopping experience needs to be plug-and-play, not plug-and-pray. - Dorel Blitz Click To Tweet

According to Blitz, the first shift came not that long ago when accessing high quality data was simplified thanks to technological innovation and global digitalization. Since then, companies have improved their ability not just to collect valuable data, but to incorporate advanced algorithms, machine learning and AI to improve their understanding of the data.

Today, companies that want to succeed in the global marketplace must take the information they collect one step further and use it to create meaningful value for customers. In other words, it is the responsibility of the FinTech companies to ensure that the online shopping experience is truly ‘plug and play’ and not ‘plug and pray’ for consumers.

While the ability to collect information and analyze it is improving, a crucial thing that companies are realizing today is that they cannot really expect the unexpected. In the dynamic world of ecommerce, lack of ability to respond to trends and social changes could spell disaster for a company.

So what can companies do? According to Blitz, companies need to ensure that they are agile enough to quickly react to market changes when they do happen.

Removing Privacy Barriers to Reduce Friction

Improving big data processing capabilities and focusing on the customer experience is one thing; but in order to truly reduce the friction that customers experience, it is important for the change to come from the customers themselves. That is exactly what companies are seeing more and more of these days.

The most common present this holiday season was smart assistants, showing that sometimes consumers are willing to shed their privacy barriers for convenience.

To truly reduce the friction that customers experience, the change needs to come from them. Click To Tweet

FinTech companies are looking at this trend and recognizing that customers are ok with providing more personal information if they feel they get something in return. More specifically, if they feel their pains can be reduced and their experience improved.

For FinTech companies who once relied on in-person connections to establish trust, this means using technology in more creative ways to create the first point of contact with the customer. Digital banks and digital wallets like Apple Pay, Google Pay and Samsung Pay all exemplify this.

Today consumers are more comfortable with technology, and as a result companies are adapting their solutions to create ecommerce spaces that are in line with customer demands.

The Competition for Retailer Data

While consumers are increasingly willing to give up their privacy for convenience, that does not always mean the retailers are getting the information the customers are willing to share.

In the case of digital wallets, these solutions are taking away the payment information from the retailers (along with the commission itself). This is an ongoing trend that started with the entry of PayPal to the digital market space and their commandeering of over 50% of the ecommerce data worldwide.

Data is why companies such as MasterCard and Visa are no longer perceiving themselves as payment processing companies, but rather data companies, since they realize that is where their power lies at the end of the day. That is also why retailers today are focusing on creating a better customer experience that is value focused, and why more and more large retailers are creating their own proprietary payment services to retain as much information about their customers’ journeys as possible.

To change this, companies need to increase their reliance on collaboration and partnerships with companies outside their traditional scope. Only when companies change the way they view their role in the customer journey, will they be able to get more information from their customers and use that information to create more value and better experiences.

Creating a Community is Key to Creating Value

The FinTech world is learning today what many other industries have turned into a way of life. Companies like WeWork place value and experience above all else, and once their customers realized that, the privacy element was reduced by the customers themselves. This is what the FinTech world is looking to emulate today in the way they approach the online shopping experience.

Ron Gura, SVP of WeWork, and our own advisor and all around tech extraordinaire Hillel Fuld, joined the ProoVday event to give their insights on the changes ecommerce is undergoing and what that has to do with the community values the coworking community WeWork embodies.

Taking insight from Hillel’s own experience buying a book online in seconds, Hillel and Gura recognized that even in that seemingly seamless process, there were barriers that could be reduced and friction points that could be simplified. If years ago consumers were willing to wait three weeks for a package and take ten cicks to complete the payment, today they want to click less and wait less.

More important than realizing that what is perceived as simple today can be simplified further, was the realization that Hillel would be willing to sacrifice privacy for the convenience of reducing the friction. This causes a fundamental shift in how companies operate.

Some retailers, such as Amazon, are focused on being the “Google of products,” according to Gura, and they do this expertly, giving consumers the ability to find exactly what they want and bringing together all of the information to simplify the decision making process.

Others, such as Pinterest, have not been shopping focused until recently, opting instead to be discovery focused. What Pinterest has done well during this time is create a community where consumers come to discover products. By leveraging this and building a solution that reduces the shopping barriers and friction, they will be able to improve the overall customer discovery and purchase journey.

The Biggest Buzzword in Ecommerce is Friction

Ultimately, Hillel put it best when he said that the “biggest buzzword in ecommerce is friction – or lack thereof.”

Companies today need drive ecommerce change by focusing on removal of friction points for consumers. Whether through improving data analytics capabilities, implementing customer value focused solutions, or simply understanding exactly what their consumer wants, there is much that companies can do to improve the online shopping experience.

The customer is ultimately the one who is driving the change in the ecommerce world, from demanding less wait time to expecting a smoother experience that is tailored to their unique needs. As a result, reducing friction is a crucial part of improving the overall sales funnel.

The biggest buzzword in ecommerce is Friction. Click To Tweet

This emphasis on friction is forcing companies to “rethink the customer journey,” according to Gura, since companies are realizing that, “the consumer doesn’t care about how things happen, they just want them to happen.”

Wrapping up Isracard prooVday with prooV CEO, Toby Olshanetsky

The key takeaway from Isracard prooVday is simple – the shopping experience has changed for everyone involved, and we’d like to believe it’s for the better. The ones who the retailers need to turn toward to bring about the change are the startups themselves, and that is why prooV continues to play a pivotal role in the connection of startups and enterprises.

As for the ecommerce experience, the idea of “going shopping” is not what it used to be, and as a result, bigger smiles and more stock isn’t the top priority for retailers because it is no longer what brings consumers back.

Technology is, without a doubt, what is driving the change. We see this in every industry, and retail is no exception. Personalized experiences such as the one created by the Nordstrom Concept store, augmented reality integration to simplify testing products at Sephora and Virtual Reality capabilities to experience home improvement projects before execution have become what consumers expect.

How can financial companies stay relevant? Two words: reduce friction. Click To Tweet

This once again proves that the customer is the one propelling all the changes due to their increased and shifting expectations, and the retailers’ role is to ensure technology is able to adapt to the consumer demands.

For retailers, this change presents a tremendous opportunity; consumers are more willing to engage with brands, more eager to communicate with products through beacons and wearables, and more willing to transmit this information back to companies in exchange for a better experience.

Consumers are willing to give up their privacy in exchange for value, but value is key. Without a frictionless experience, the integration of technology in the online shopping experience will not be enough.

And that is what Isracard prooVday 2017 was all about.