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The Year of Retail Self-Service Feb 25, 2020

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Summary: Today's podcast is an oldie but goodie. A podcast we first released in May 2019 was so popular we decided to share it again! In this episode, we take you on a journey of how self-service has woven its way into so many of our daily activities from paying for gas to checking in for a flight and really what are the consumer expectations for these types of offerings. Resources: Chart your Path for Retail Growth - Connect with our Retail Experts here Blog: Retail Self-Service: Today, it's WAY more than self-checkout Transcription: Amy Lombardo: Hello again, this is Amy Lombardo, your host for this episode of Commerce Now. In today's episode we're joined by Matt Redwood who is the head of self service checkout for Diebold Nixdorf's retail division. And today we'll discuss how self- service has woven its way into so many of our daily activities from paying for gas to checking into a flight and really what are the consumer expectations for these types of offerings. So hi, Matt and welcome to COMMERCE NOW. Matt Redwood: Thank you for having me. Amy Lombardo: Always a pleasure to talk to our friends in the retail division. So Matt, let's talk a little bit about your background first. Can you tell the listeners a little bit about yourself? Matt Redwood: Absolutely. So as you said, my title is head of self service for Diebold Nixdorf. Been in the company about 15 months now. It was brand new position within the company and DN saw the need to put more focus on the self-service checkout. So look after the self-service checkout business for Europe, Middle East and Africa. I've been in and around self-service my whole career. I've been in retail for a nearly 10 years. So, I've worked with multiple different retailers all across the globe on their self-service strategy. But also that self-service implementations to make sure they're deploying the right solution into the right place. Amy Lombardo: Very good. So Matt, what I wanted to do was start at a very high level and talk about some macro trends that are shaping the retail industry because you can't get away with reading any headline of any major industry publication these days without seeing something about self-service in there. So can you talk a little bit about some of those macro trends that are shaping the retail industry today? Matt Redwood: Sure. So self-service in the form that we see at most grocery stores has been around for 15 years, which you know in the retail landscape is a long time. But it's taken a long time I think for retailers really to understand self-service checkout to get to a position that deploying it in the right way and of course for the consumers to adopt it in the right way. I think we're really at a tipping point now where from a consumer perspective is, there's self-service in every part of our life. Whether you go to the gas station, whether you go to the train station on the app or you go to the grocery, there is a self-service option and what we see in our data is that consumers really now see it as point of convenience for them. They see the benefits of self-service checkout and they've moved past the point of not only wanting it but they actually now dictate it to retain it. Matt Redwood: So we have a lot of retail customers that come and want to work with us purely because that's [00:02:30] amazing that stores are actually demanding it. I think when self-service initially came on the scene and a lot of retailers saw it as a great way to strip costs out of that store. And so a lot of retailers, particularly in grocery, really went for very very high density self-service checkout deployment. They stripped a lot of stuff out of their stores but what they came to realize that actually they saw a bit of a drop in the consumer experience within their stores and I think the assumption was that they put self-service checkout and they remove staff, customers will use it and everything will be fine. But actually what happened is that had a detrimental effect on the consumer experience in the store because there weren't staff to help where consumers really valued the experience within the store. Matt Redwood: So what other retailers now do is actually, it's not about a reduction in staff, it's about a redistribution in staff. Amy Lombardo: Right. Matt Redwood: If you take tasks that were normally done by the system and you give it to the customer to do, that frees up that member of staff to then be in other areas of the store to make sure that customers can find products, or the shelves are well stocked, they're well priced. So actually getting the experience right or getting the efficiency right at the self-service checkout as a knock on effect on the customer experience all the way right back through the store. Amy Lombardo: Right. So Matt, can you explain how consumer's knowledge and their comfort level is shifting in terms of how consumers are engaging with the self-service technology today versus maybe what they did when retailers first started introducing it many years ago? Matt Redwood: Sure. So I think there's really a perception shift with self-service checkout that's happened over recent years. I think when self-service was first introduced to stores, there was a bit of negativity and a bit of push back from consumers because they saw it as a replacement of the members of staff within the store, especially very loyal consumers that went to the same store every single week to do their shopping. They built a reputation with the member of staff. The thought of that member of staff being taken away and replaced by a machine was hit with a lot of negativity from consumers. The shift that's really happened over the last couple of years is consumers value the choice, the choice to check out or to interact with a brand, a retailer in the way that they want. Matt Redwood: So now what we see a lot of retailers doing is focusing on giving consumers as many channels to shop within their stores or checkout within their stores as possible. So the role of the assistant has changed completely from just a member of staff and the checkout to really kind of a customer experience manager within the store. So the tasks that would normally be done by an assistant at a point of sale system will now be done by the consumer either on a mobile device or self-service checkout or a kiosk. Matt Redwood: And that frees up that member of staff to actually deliver the right level of customer experience within that store. So I think the perceptional shift has been away from that machine is taking a member of staff's job to actually that machine is an option for me to check out of the store and it's freed up the member of staff to deliver a better customer experience somewhere else in the store where I wouldn't normally get it. Amy Lombardo: So Matt, I wanted to comment on what you just said because I think about how when I go to my local grocery store and I use self-checkout all the time, maybe because I'm a control freak and I like to see what I'm actually scanning and paying for. I let my kids do it sometimes, but then I hear time and time again, you'll see certain generations that come up and they say, I don't want to use this, this takes longer. And there's always a problem with it. And I'm just wondering is that a perception issue? Is it a training issue? You know, can you comment on that a little bit in terms of maybe just generational preferences and using self-service? Matt Redwood: Sure. I always say to retailers, deploying self-service checkout is not as simple as deploying a point of sale solution because innately it's a change in so many processes in your store. So we really refer to self-service checkout as a business change solution because it enables retailers A. To make their stores more efficient and but also B. Delivering a much, much better customer experience to their consumers. But the byproduct of that is because of the interaction is so different between the brand and the consumer, that retailer has to change so many processes in their stores for self-service to really be efficient and work well. Matt Redwood: So things like cash management, how they staff their stores, how the staff interact with the customers, how their customers interact with them as a brand, all changes. So there's a huge amount of operational shift that has to happen. So I'd say a big part of getting self-service right is how you operationalize it. Ultimately it puts a lot more onus on the staff to deliver a better customer experience because you're taking away so much human interaction within the store. But when [00:07:30] staff do interact with consumers, it's that much more important that they deliver a much, much better service. So I think it's probably a combination of not just the technology but how you staff the stores, how you operationalize your stores. It all comes together to really deliver the right customer experience. Amy Lombardo: Got It. And so in self-checkout or really varying ways to shop, it goes beyond just self-checkout. So there's smart phones, there's handheld scanning devices in the stores, [00:08:00] all of these different types of self service options. How have these changed the way consumers engage with brands? Matt Redwood: Well, I think it's giving consumers a lot more choice in terms of how they do interact with the brand. If you think about a customer journey of a grocery shopper five years ago, they'd make the decision that they want to go shopping and that may be influenced by family or what they're going to eat tonight, what they have in the fridge. [00:08:30] They'd make the choice to go to the store. They'd shop that store, they'd pick their products, they'd go to the checkout, they'd check out and they'd leave. Matt Redwood: Now what we're seeing is the customer journey is actually a lot more cyclical and yeah, retailers really have to focus on the digital journey. So how do I influence that consumer when they're away from my store, when they're away from my brand? So yeah, while they're watching type TV, how do I influence them to actually shop at my store, rather go to a competitor store and then how do I drive that consumer into that store [00:09:00] and enrich that customer journey when they get there? Matt Redwood: So give them the choice to shop your brand in the way that they want. Once they get to your store, enable them to shop the store in the way that they want, but put the right technology in there to enrich that consumer experience. Apply the right level of staffing to the store as well to supplement that technology journey. Allow them to check out in the way that they want. I think now more than ever we're seeing retailers really put the most amount of choice in that technology [00:09:30] that consumers can use to interact with a brand than ever before. Matt Redwood: But then it doesn't stop when they leave the store. Once they left the store, how do I influence that consumer to come back my store and actually driving the consumer into the store and actually making sure they come back is as a bigger part of the customer journey as the in store piece. So just giving the consumer a good in store experience isn't enough anymore. You've really got to enrich the consumer experience all the way around the circle. Amy Lombardo: [00:10:00] Do we see custom retail apps tied into self service options? So I think of Target for example, and I have their cartwheel app and I always get special discounts given to me just through the app. And then a lot of times then it's for the ease of self service. So do we see that customized apps maybe have any type of leverage on how self-service is used? Matt Redwood: Yeah, absolutely. So [00:10:30] when you think about a mobile app, and more than ever, every single consumer has a mobile, a piece of technology that allows them to effectively never go to a store again. But what retailers can do with that app is they can actually influence that consumer come to that particular brand or that particular store. And as you said that may be through personalized adverts, it could be through promotions or through a loyalty system. But ultimately that's an amazing tool for retailers to, I wouldn't say target [00:11:00] specific consumers, but definitely engage with consumers when they're away from that store or make sure they come into their store. And then really the use case flips because if you take the online second screening type of example of, I want to buy a TV. I might go into a store and look at TVs, but there I'll be using my mobile phone to second screen. And actually I'm researching prices all the time. Matt Redwood: So I'm now a professional shopper because I'm price matching as I'm going through the consumer journey. So it's really important that [00:11:30] retailers don't shy away from mobile. They actually embrace it because consumers don't like to be forced down a particular path. They want choice and they want clarity as well. Clarity of what they're buying. Clarity of pricing. So really retailers have to accept that every consumer has that mobile device and really put a lot of focus on using that to enrich the in store experience. Matt Redwood: Of course., as well, consumers could apply the application to allow them to actually shop the store. So scanning products and [00:12:00] actually use it as the checkout. So yeah, self-service checkout then becomes a supplement to a mobile application because it allows them to finalize the journey within the store, potentially pay cash or pay card or get help from an assistant or coupons or loyalty. So really the self-service checkout on the mobile device shouldn't be seen as competing technologies. They really supplement each other. Amy Lombardo: That's an interesting way of looking at it. So when a retailer is ready to make the shift to self-service or they need to modify their existing plan, something's not working right, maybe they are ready to add on some new functionality. What's your advice on how that retailer begins? And I ask you this because I go back to one of your initial comments here was the over simplification of self-service solution. So you can't just set it and forget it. So you know, talk to us a little bit about some of those advice pieces. Matt Redwood: [00:13:00] Absolutely. So really important, as I said previously, not to consider self-service checkout as another point of sale solution. And as you said, which I'm going to use actually set and forget. We don't want any sets and forgets because it's not a guarantee that our consumer is going to use that device. So if anyone wants any help with that process, we have some great advisory services where we work with retailers specifically on identifying the right solution to put into their stores A. For what they're trying to achieve as a [00:13:30] business but B. For their consumers. So staff from a data point of view work out what the trading profiles of your store are. Work out what you're trying to achieve by putting self-service checkout at the store. Is it efficiency, is it customer experience or is it just because everyone else is doing it or your biggest competitor is doing it? Matt Redwood: That's quite an important [inaudible 00:13:51] to start from. And then I think really focused on the customer journey. So why do your shoppers shop at your store and what kind of customer experience are they [00:14:00] expecting? If you can nail those three points, then you can really identify what type of self-service checkout to put into your store.…

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Driving Future Growth in Dubai Jan 27, 2020

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Summary: Devon Watson, Chief Marketing Officer for Diebold Nixdorf recently traveled to Dubai UAE and sat down with the Dubai Future Foundation - a government initiative driving accelerator programs - as well as a special block chain consultant, to discuss how the region is approaching growth and innovation. Resources: Dubai Future Foundation Website Dubai Future Foundation LI page Mark Balovnev, LI Profile Educhain Website Accelliance Website Diebold Nixdorf Website Transcription: Devon Watson: 00:14 Hello again and welcome to this week's episode of COMMERCE NOW my name is Devon Watson, Chief Marketing Officer for Diebold Nixdorf. Today I find myself in Dubai, UAE. We're at the Dubai Future Foundation, a government initiative driving accelerator programs in the region. I'm joined today with Ghaith Abdulrahman and Karin Gabriel, both of whom are project leads at the Dubai Future Foundation and a special guest Mark Balovnev. He's the founder of Educhain and a partner at Accelliance, a blockchain consultancy based here in Dubai. So maybe to start off, Ghaith, if you could tell us a bit about Dubai Future Foundation and some of the programs you guys are running here. Ghaith Abdulrahman: 00:54 Sure, absolutely. Dubai Future Foundation was born out of the belief in the need to drive future in Dubai. As you know, Dubai is one of the global cities and a major, major regional player and it's been doing really well in a lot of sectors, primarily specific sectors that drove it out of turbulent times in the past and it created a successful business community and society. We've had brands come here and stay and we've had homegrown brands that have gone global. So the need to start planning for the future comes out of the belief that we need to continuously be number one, and it started in the World Governance Summit where we had an exhibition around the Museum of The Future, where we wanted to demonstrate what the future could look like. And instead of demonstrating relics of the past, it was more about what could future sectors look like, what could human interaction technology look like and how could society look like in the future? Everything from government to private sector and the society itself. From that very, very humble beginning. The foundation has over 200 employees, a vast portfolio of projects that range from everything from building capacity for society, government and multinationals around explaining what the future could look like when when emerging technology comes into their sectors to building disruptive programs around with multinationals government about how could we lead on certain sectors? How can we transform government from a nascent and inactive player to a proactive player? Which has been the case for Dubai government for a long time, where they've been pushing and driving the innovation in any economy or any sectors or in the economy, since their inception, and the private sector has been kind of following rather than leading. So that's really to build and capitalize on that effort quite a lot. Some of the programs that we host range from connecting government to very bright startups to entrepreneurs to building capacity on a leadership level to help them understand how is technology changing their sector? How it could change your organizations to working with private sector as well around a similar scope to building capacity with university students and high school students around breaking down myths, breaking down misconceptions around things like AI, blockchain, other parts of technology and how could they be part of that new wave of entrepreneurship, but also how can they use that technology moving forward. So the scope's quite vast. We get into a lot of programs, what we primarily focus on building programs that link regulators or government with a private sector and startups and how do we build the value chain around these three. Devon Watson: 03:38 Got it. And one of the things that you mentioned that I thought was pretty interesting, so as I look around Dubai, the desire to be number one is pretty obvious, the world's tallest buildings and very impressive engineering feats. But there's also this kind of clear trend towards the societal aspect, the satisfaction or happiness. I've noticed that those measurements are kind of stitched in every place I go in the user experience. Can you talk a little bit about how the user experience, as it pertains to really a societal benefit here right, the government is what's actually driving this and how does that marry up to this desire to be number one because many other governments or institutions would view it as one or the other? Ghaith Abdulrahman: 04:23 Absolutely. You're spot on. I mean the general vision is to be number one and that, to different stakeholders and government, that could mean different things, right? From a government centric perspective, one of the things that means is that, beyond creating government entities that are stellar, that are continuously innovating and taking the lead in their sector, there's a huge services mandate towards the people, towards a society that needs to be fulfilled. And that's been a primary concern and primary focus of the government entities here. How can we provide world-class services to the citizens, to the users, whether they're commercial, residential, and everybody who even passes by or transits Dubai, right? How can we give them an experience around service that's not comparable, right? And there's been a lot of focus. Everything from gearing the Government entities internally, whether they're from an organizational perspective or from a services perspective, operational perspective, but also how can we team them up with the best technology that can facilitate providing the best services. So that's been really the focus. And ultimately the common denominator across all that is that we want everybody who hand or deals with Dubai government to be happy with the outcome and the transaction and the experience. Devon Watson: 05:36 Got it. And one of the things that I've always thought a lot about when I go to a different city and I see how they're trying to stimulate innovation is, how you bring the right mix of participants together, right? And you need students, right, that are graduating and becoming risk-takers and new ventures. You need often some sort of government support. You need large corporations that can be acquisition vehicles for these different startups and things like that. And you need capital, right? And one of the things that I noticed that I thought was really interesting is that you've brought a Techstars program here, so maybe you could tell us a little bit about that. Ghaith Abdulrahman: 06:12 Sure. So Techstars program was launched the beginning of last year and it was the first accelerator program we hosted in our flagship project Area 2071. So Area 2071 is an experimentation space between government multinationals and startups focused on identifying a disruptive business models and technology. And out of that we hosted a Techstars for the first time in the region. It was the first endeavor in the region there were sponsored by one of the big family businesses in in the UAE. And we really liked the outcome of the program because the way it was organized and the way that it was structured was in a way that ensured that the companies would not just succeed, but find a home in Dubai. So we found that quite attractive to our mandate and our positioning. So we hosted them for two cohorts over two years. And a lot of these companies are going to get special visas around that enables them to stay for a long period of time, sponsor their teams, and sponsor their families to be based here out of Dubai. So that's the support that we've usually provides any accelerator program or any startup. But that Techstars experience has been quite stellar because it also pushed us to launch a project recently, it was one of the reasons that focuses around how can we incubate ideas on a university level where it's safe to fail, it's safe to experiment with new ideas for businesses and how can we play a role along with the private sector and the government funds around seeding these ventures and graduating a lot more of these ideas. And that's the problem that you find in the Middle East in general, is that there's a lot of talent, there's a lot of bright ideas, but there's very few mechanisms that enable it to go from idea stage to execution stage or a POC stage. And that's kind of where this project, which is called Genie Zones or Alchemy Project has come out from. Devon Watson: 08:01 The way I often phrase that problem when I'm thinking about it. It's something that recurs in different regions as well as solving the get to market problems, not the go to market problem, right? And it's a different mindset, right. And you need, in particular, permission to fail, right? And that's not always culturally viewed as an okay thing. Ghaith Abdulrahman: 08:21 And that's why universities are the best place to do it, especially when you embed that program within the credit system that the university student goes through. It becomes more of an incentive and it puts the parents at ease as well because they say what, he or she are focusing on the degree and at the same time that this program that they're doing is contributing towards that degree. So that program really fits in quite well with everybody's needs Devon Watson: 08:45 And then that changes the perception, right. And opportunity to learn rather than a blatant risk, right? Ghaith Abdulrahman: 08:52 Absolutely. Devon Watson: 08:52 That's excellent. So thank you Ghaith. That was super helpful. I really liked the kind of the mission around what you guys are trying to create here with the ecosystem. So Karin, maybe we could move over to you and tell us a little bit about, as this ecosystem is coming together, you're trying some new things, what are the technologies, what startups maybe are starting to capture your attention that you're bullish for that will have a great future. Karin Gabriel: 09:18 Absolutely. And I think, I just want to start off giving a bit of context of the kind of programs we run here. So my colleague mentioned earlier Techstars, which is one of the programs that are invited to set up an Area 2071. And Area 2071, as mentioned earlier, is an ecosystem that comprises of three main stakeholders, private sector organizations, government organizations and talent in the form of startups primarily. And they're all situated here in Area 2071 in Emirates Towers. And our goal is to make sure that we harnessed experience and expertise of our members in this ecosystem. And we work on specific programs that are all driven by a specific challenge. So challenge is a need, a problem statement that we identify together with our partners. Then our goal is to find the right stakeholders, bring them on one table, and then we create a program that allows the different stakeholders to work together and co-create a solution for the challenge statement. And these challenge statements usually revolved around technologies and we have seen all kinds of technologies from AI to a block chain artificial intelligence. Sorry, let me move [inaudible 00:10:29]. Yeah. So we have seen all kinds of technologies being represented in our programs from artificial intelligence to blockchain, virtual and augmented reality and so on. And I think what's interesting about our programs is that they are driven by a specific need. So in Dubai future accelerator, if we work with their road and transport authority that looks into autonomous driving, for example. The electricity and water authority looks into new forms on energy savement, energy generation, but it was a water generation. The knowledge authority of course really wants to revolutionize the education system to make sure that it's ready and prepared for the 21st century. I think what we have seen interestingly is, in the beginning a bit of question on the government side on why should we work with startups? Because for them this was a new field. As you can imagine, even for us in Dubai Future Foundation, we are very young organization. We are less than six years old. But if you want to buy let's say new furniture and new equipment, we have to go through an RFP process which is very strict, which doesn't allow us to work with startups, which means all of the solutions that startups provide around innovation. I think that we can access on a legal basis. That's why Dubai future accelerators was set up as a test bed to allow startups to work with government entities and explore during the nine weeks program how they can collaborate. And we have really seen a shift in the mindset of the government from being in the beginning very careful when it comes to working with startups. They wanted to know which were the partners that the startups have worked with before and they wanted to do have references. To really switch integrate, you have never tested it before. I want to be the first one you test it with. I want you and us to sit down and further develop your technology. Now I can give you an example here, we had a company from the UK called Desolenator and they brought to Dubai a solar powered water desolination technology sit in MVP stage. They signed an agreement with the electricity and water authority from Dubai and over course of one and a half years, defer to develop the technology and have now building a community size plant in Dubai using this technology. Devon Watson: 12:46 It's a great success story. Karin Gabriel: 12:48 Absolutely. It's brilliant and I think it shows the risk appetite the government has and the confidence in the startups and really understanding that emerging technologies can help them offer better services to their customers. Devon Watson: 13:02 So the self-awareness and government's part to understand that there probably was a lot of red tape and things like that. I did a similar interview with another accelerator in a different part of the world and they were telling me that at first when they got started, they were bringing these brand new startups in and the government form had to make the startup list of the number of fire extinguishers they had. No startup has any clue why you would even, right? They don't even think that way. Right? So it's interesting that the government here was kind of self aware that there was impediments and red table, whatever you might want to call it, to that progress and then and then fixed it. What was that conversation like through the education process though? Was there an aha moment or was it just kind of a continual collaboration to help refine how the government looks at it? Karin Gabriel: 13:52 Yeah, that's a good question. And I think it's an ongoing process. So they have been a lot of aha moments and I'm pretty sure they will be a lot of aha moments moving forward. So for example, one of our partners really looked into changing or adapting their procurement system, right? Because our procurement based system sometimes takes months. And months are not an issue for large corporations, but months are an issue for a startup because they have limited resources. And I really think it's by having the government partners and private sector organizations as well, work with the startups over a period of nine weeks, every single day side by side to really see the potential that they have in transforming the services or the way we offer the services to our customers. And not only our customers, but we had one example where a smart Dubai office who is kind o…

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Evolving The Operational Model - Software as a Service Jan 07, 2020

Show notes

Summary:

On this podcast we discuss how to transform from traditional sourcing to an “as a service” economy. Today’s consumers expect “anytime, anywhere” access to the self-service channel, leaving financial institutions with the challenge of optimizing availability without driving up costs. For many FIs, this challenge can quickly become overwhelming.

Resources:

Blogs:

Banking Innovation: 4 Ways You Can Make a Big Impact Quickly

The Growing "XaaS" Service Economy Trend

Websites:

COMMERCE NOW

Diebold Nixdorf

Transcription:

Amy Lombardo: 00:13 Hi, this is Amy Lombardo, and I'm your host for this episode of COMMERCE NOW. We're coming to you live from DN Intersect 2019 in Las Vegas. I'm joined today by Homi Karkaria, who is head of our Solutions Group, and he's presenting to our bankers today a topic that's entitled Evolving the Operational Model, which I think is a little intriguing, due to your role in the software market. So let's talk on the topic of software as a service model and why a banker should think about this as an operating model. So my first question for you, Homi, is where do you think the global software as a service market is headed right now?

Homi Karkaria: 00:52 Sure, thank you so much. Well, there has been significant increase in the global software as a service market as we look at things. For example, if you look at everything as a service, or what people would coin XaaS, that market has grown by 38%, or is expected to grow by that by 2020. When you look at the software side, which is the software as a service, that is also growing at healthy double digits greater than 20%, with a cumulative growth rate expected to reach a huge 185 billion by 2024.

Amy Lombardo: 01:27 Does that sound about right for the role that you're in? Would you expect to see that? Is it something that bankers are accepting and gravitating now?

Homi Karkaria: 01:36 I think bankers are really understanding this and accepting it. They have started realizing the advantages of why this is happening, what's in it for them, and how they could benefit, whether they look at initiatives like branch transformation, more automation, connectivity of physical and digital channels. I mean, all of this has to happen with limited cost, with limited infrastructure, with limited resources that the bankers have, and this is where software as a service can really help them.

Amy Lombardo: 02:06 Okay. So dive a little bit deeper into that. You mentioned a few of those benefits there, but can you explain them in a little more depth here for our listeners?

Homi Karkaria: 02:15 Absolutely. When you look at customers, customers have different needs. So there are different needs for tier one customers versus tier two entry. A tier one customer might be able to have a large capital expenditure as a part of their budget. A smaller customer might not. So how do I have a solution which translates or which goes from a CapEx mode to an OpEx mode? So that's one benefit for the tier two segments.

Homi Karkaria: 02:40 The second thing is, banks want to retain, in certain cases, their own cloud environments, their own private cloud. However, there are certain applications which are not business critical and they want to connect to a public cloud. So how do I build a hybrid solution which connects the best of [inaudible 00:02:57] from what Diebold Nixdorf brings with what the have in-house?

Homi Karkaria: 03:01 When you look at the challenges that the banks face today, a lot of it is to do with upgrades. So I have done, you know, how much time does it take to do an upgrade and that could be reduced significantly in software as a service model.

Homi Karkaria: 03:15 The other big challenge is, when I have an update, how do I ensure that my install base is not affected because of somebody else? How do I have a faster go-to-market? How do I have a seamless migration to have a positive consumer journey? So those are all the benefits that the standardized solutions which comes as a part of the SaaS models brings to the banks.

Amy Lombardo: 03:38 So where does security come into this model? Is it almost you're more protected by going through as a service model, or maybe what are the considerations that a bank needs to think about pertaining to security?

Homi Karkaria: 03:52 Security becomes absolutely critical when we go to this model because the benefit is the flexibility across the different channels that brings with it the challenges associated with security. Now, when you look at security you're not just looking at security from a client end-point perspective, which might be the ATM, you also need to look at security from a backend server perspective based on the solution that's hosted in the cloud, and how are these two connected? How do I ensure that my end consumer is indeed the right one and is using the channel effective. Security becomes an extremely critical part of this equation.

Amy Lombardo: 04:29 Okay, so Homi, let's move a little bit into the implementation side. What does a banker need to think about as they want to move to the SAS model or are there particular models based on their own environment?

Homi Karkaria: 04:43 Yeah, so I give simple example to illustrate what kind of models the bankers can think about. If you are an end consumer, you have multiple options. You could own your own car. That is equal to, in my books, putting a software on-prem at the customer side. But I could decide to lease a car. I don't want to own the car. I do not want to have the headache of it's a maintenance and upgrades, et cetera. And I want to change it after a couple of... so I could lease a car. And leasing a car is then synonymous to software as a service. I could also have a situation where, I don't even want to lease a car, I don't want to drive it. I want to take a taxi. I want to go from point A to point B today. I want to go from point P to Q tomorrow and I want to take a taxi.

Homi Karkaria: 05:28 And that would be a synonymous to a managed service model where a customer is requesting, I have not only to deploy the solution but operated on the RBF. And finally when we look at something that we call biz sourcing, it's like taking a train. A train leaves a station, irrespective of the number of consumers that enter it. A train does not deviate. It goes from station A to B to C at a specific predetermined time period. And that's akin to what we call biz sourcing, where solutions ATM as a service come in. So bank needs to think of where are they today? Where do they want to go, how much do they want to invest? What's the level of maturity inside the bank? How do they focus on their core competencies of financial services versus focusing on technology and let us handle it for them.

Amy Lombardo: 06:16 Got it. Well that was a perfect example there and made very logical sense to me. You mentioned on premise and off premise servicing. Can you explain the differences there and and really is there any difference for the consumer?

Homi Karkaria: 06:34 So from a consumer perspective there wouldn't be a difference. From a bank's perspective, there are a couple of differences. When you look at a solution that is hosted as a service, you have all those benefits, like a standard solution with faster go to market with the quick upgrades and seamless migration, et cetera. However, when you look at an on-prem solution, you have other types of advantages. Namely a customer might want to have a highly customized solution. They might want to have control over the implementation timelines. They might have specific integrations which are very proprietary to the banks ecosystem, so they might have cash on the balance sheet, which they want to invest upfront and they want to pay for the licenses right away rather than distributed over a couple of years. So it's a very different model when you look at on-prem versus SAS and that are advantages and differences between the two.

Amy Lombardo: 07:32 So it sounds like there's benefits either way, it's just based on how your organization's makeup is built and where you want to go with the offering. Right,

Homi Karkaria: 07:42 Absolutely. I think especially for tier two banks, who do not have significant investments to be made on the technology side and have on faster go to market, I think a SAS solution would be better off than an on-prem solution. But otherwise, work models are very much work in the market marketplace.

Amy Lombardo: 07:58 Got it. Okay. So I think this is a good point in our discussion to end here. Homi, I'm grateful and thankful that you sat down with me today and to our listeners out there, keep following us along on COMMERCE NOW and for more information on our Vynamic Software Offerings go to dieboldnixdorf.com. Thanks for listening.

Location and Data Boost Self-Checkout Conversions Nov 26, 2019

Show notes

Summary: In a follow-up conversation with Karen Webster from Pymnts.com, Carl von Sydow from Diebold Nixdorf recounted that self-checkout store data is not complicated or complex — it’s pretty simple information, including time stamps, the number of items in a basket and whether certain items are age-restricted, but paying close attention to the data will ensure an optimal customer journey throughout the check-out process. Resources: Pymnts.com related articles: https://www.pymnts.com/checkout-conversion/2019/for-self-checkout-location-location-location-and-data-boost-conversions/ https://www.pymnts.com/news/retail/2019/using-data-to-increase-checkout-conversions-in-store/ Blogs: Relevant Retail - the New Norm Retail Self-Service: Today, it's WAY More than Self-Checkout Website: Diebold Nixdorf Previous Carl Von Sydow Podcast: Using Data to Increase Data Conversions In-Store Transcription: Karen Webster: 00:00 Hey, Carl, thanks for joining me today. I'm looking forward to having a follow up conversation that will build on the last chat we had about using data to increase checkout conversions in the store. We talk a lot about checkout conversion online, and in the store, using the right data, can certainly help to increase that process. We set the stage last time we chatted, now we're going to dig into the details of exactly how to do it. So, thanks, as always, for making the time. Carl: 00:43 Well, thank you. Happy to be here again. Karen Webster: 00:46 Okay. So, let's get practical about what to do with the data that has been collected, and observed. Now, action is ready to be taken. How would one go about actually putting a checkout conversion plan together when looking at their data, for figuring out how to do that? Carl: 01:10 Well, first of all, I just want to come back a little bit to what we said last time, perhaps. [Core 00:01:18] data we are talking about, first of all, is not complicated or complex, it's pretty simple information. I don't anyone to believe that we are doing some highly sophisticated, rocket science analysis here. It's more or less about the timestamps, amount, number of items in the basket. Is there age-restricted items or not, et cetera? It's pretty simple information, it's just how you interpret that information. But, coming back to your question, first of all, you have to, when you collect the data, you have to think a little bit about from what period you picked the data. You can have data from a slow week, or a busy week, or some kind of average week, but the important thing is that you know from what type of period you pick your data. Or, you can choose to have a data from a longer period of time, like work with averages. That's one thing that's important. When it comes to conversion rate, you have to look through the data, and put together what might have an impact on your conversion rate. Conversion rate, of course, is being the ratio of customers coming into the store, buying respectively, as not buying anything. You want to have as high conversion rate as possible. You want all customers that comes through your doors to buy something. Typically, the customers that leave the store are customers with few items. They come in, they are in a hurry, they want to buy just a few items and get out of there. The good thing is, like, self-service is ideal for customers like that, with the few items. If you look at your store data, and you can identify a group of customers with small baskets, less than five items or something like that, then you have a good potential to increase your conversion rate if you, then, add more self-service, or add new self-service to that store location. Karen Webster: 03:12 So, when you think about the impacts of conversion, and looking at data on the efficiency of the experience throughout the store ... we're talking grocery stores, I guess, and other stores where people are going in and out, and buying things. Convenience stores, I guess, would be another category. There's the consumer angle to this, which is obviously very important, that drives sales. There are also other behaviors that, looking at data, and trying to make decisions about checkout efficiency, is also very important. Can you talk a little bit about the staff impacts, the management impacts, some of the investments in technology that need to be considered in looking at this bigger picture? Carl: 03:55 We have one example. We have a customer I'm working with right now, they didn't have self checkout. They installed card-only self checkout in their exit area, four lines. We studied the data before and after. All of the after, only a few weeks, we could see that we had an adoption rate of 25%. Karen Webster: 04:17 Wow. Carl: 04:17 Which was really good. Karen Webster: 04:17 Mm-hmm (affirmative). Carl: 04:18 It was four lanes out of a high number of lanes in that store. They were careful with the investment, self checkouts is expensive. They didn't know how their customers would react to this new concept. This is actually this summer, so we retailers just adding self checkout. Karen Webster: 04:38 Mm-hmm (affirmative), Mm-hmm (affirmative). Carl: 04:38 So, what we could see, when we looked at the data, we could see some signs that, perhaps, they have some possibilities for, first of all, add more self checkout. We could easily see that we had a lot of customers going through the normal lanes, still with very small baskets, paying with credit cards, that would be ideal to try to push them to the self checkout. So, the potential was clearly there. We could also see, since we can go in and look in 15 minute brackets when lanes are open, I could see that, for some reason, they didn't open the self checkout lanes until after two, three hours later in the day. They could have several [manned 00:05:18] lanes open before they open the self checkout. So, we had a discussion with that retailer about that. It was all about it being really careful with customer satisfaction, and customer experience, and also staff training. They felt that they didn't have trained enough staff to be able to man the self checkout area. Karen Webster: 05:41 Mm-hmm (affirmative). Carl: 05:42 Then, we went there and made some observations. It's always good to see everything - Karen Webster: 05:46 Sure. Carl: 05:46 - live, as well. Numbers are one thing, but you have to see it for yourself. We could see that as soon as they opened the self checkout, the line of customers waiting for the other manned lanes immediately gravitated towards the self checkout. Because, customers today, they know that self checkout is a very quick way to leave the store, and that's what they want. Karen Webster: 06:12 Mm-hmm (affirmative), Mm-hmm (affirmative). Yeah, I mean, it's interesting because ... I'd be curious to get your thoughts when you observe this. People just don't like waiting in line, right? If they have a small number of items, and they have an option to use self checkout, and they can do that without standing in line, it seems like an obvious choice. So, you get - Carl: 06:33 Yeah. Karen Webster: 06:33 It's not as if consumers are going to put their basket down and walk out. They've already made the investment to go there, park the car, and select their items. You know, they may not come back the next time if the experience is difficult for them, or the association with the store is, I'm always going to have to stand in line when I've got five items that I want to just buy to get in and out. It plays on basic human behavior. Carl: 06:57 Yeah, it is. As I said, it's common sense, it's like an after thought. Everything is so easy when you look at it afterwards. Karen Webster: 07:05 Sure. Carl: 07:06 And you have the good example in front of you. It is actually very simple. Interestingly, in you take just the transaction process itself, a cashier is always faster than us normal customers, when we go and go through self checkout. Karen Webster: 07:23 Yeah. Carl: 07:23 We have the same number of items, a cashier would scan them faster and all that than we can do ourselves, but the perception that we have as a customer is that the process is faster, because we are in control. Karen Webster: 07:38 Yeah. Carl: 07:39 We do everything ourselves. So, there is a lot of objective things that make the customers gravitate towards self-service nowadays. Karen Webster: 07:47 Mm-hmm (affirmative). Carl: 07:48 They are getting more and more simple to use. Another trend, a little bit, is that some retailers, they add more staff in the self checkout area. Perhaps, deactivate or disengage the wait security during peak hours. Karen Webster: 07:48 Mm-hmm (affirmative). Carl: 08:05 To increase the throughput and make it easier to scan and just go. That's a sensitive topic, of course. More and more retailers, I think, they're looking at the throughput rather than the hard fact, security, and you have security features and all that. Add more customer service, more staff monitoring and helping the customers, and you will have a higher throughput, and everybody will be more happy, really. Karen Webster: 08:29 Yeah. Carl: 08:29 Throughput is more important than every, I think. The speed that you get customers through the self checkout. Karen Webster: 08:35 Yeah, no, for sure. I think you're right. You fumble around to get the bar code, sometimes, and then you have to - Carl: 08:43 Exactly. Karen Webster: 08:43 - push your stuff down the chute, and then you have to bag it. All that takes time. You do feel better, because it's you that's doing it. You don't have to wait behind someone that has 50 items in their basket, and that takes forever. As we all do, we scan the lines to make some mental decisions about what line will probably move the fastest. I always pick the wrong lines. Carl: 09:10 Yeah. Karen Webster: 09:10 I think that's what consumers do. What about the convenience store environment, which is not the same large format as grocery stores? What are you seeing there, in terms of best practices with self-service, self checkout? Carl: 09:27 With convenience stores, it's an interesting store format right now, for self-service. They have a different challenge, in a lot of cases, compared to bigger supermarkets and [hyper 00:09:38] markets, in the way that they have not so many staff in the store. They could have one lane open, or two lanes open, typically. Then, perhaps a maximum capacity of four or five lanes. Conversion rate, they are very sensitive for that, because especially in a convenience store, customers tend to go out immediately if the lines are too long at the checkout. Nowadays, when we have smaller, more efficient from a footprint perspective, self-service solutions, the door has opened a little bit for convenience stores to start to use self-service. On top of that, there are some clever hybrid self checkouts on the market, as well, where you can have a lane in self checkout mode, and then you can easily just switch that self checkout, without turning anything around or anything, just you switch the software application so it turns into a manned lane. Karen Webster: 10:39 Mm-hmm (affirmative). Carl: 10:41 For example, we have another project with a C-store customer in the Midwest. They have four lanes in that store. Typically, they had one, two lanes open. Then, peak hours, they went up to four quite often. Difficult to plan staff, because it went up and down, up and down, over the day. We discussed with them, looked at the data. We took out two of the four lanes, and put in three self checkouts instead. Karen Webster: 11:08 Hm. Carl: 11:09 Which means that, in any given point during the day, with one person, they will have four lanes open. Karen Webster: 11:17 Yeah. Carl: 11:17 That person will operate the manned lane, but she will also have three self checkouts available. So, the maximum capacity, at any given time, increased dramatically. Karen Webster: 11:28 Yeah, sure. Carl: 11:28 If you do that, then it will take much longer for lines to build. Karen Webster: 11:32 Yeah. Carl: 11:32 When a customer comes in. Karen Webster: 11:34 Yeah. Carl: 11:34 So you have, immediately, a positive impact on the conversion rate. Karen Webster: 11:39 Yeah. Carl: 11:39 When you need the maximum capacity, you can switch the self checkouts to manned lanes, and the capacity you need is available. Karen Webster: 11:47 Yeah, I think in those stores, the opportunity for abandonment is very high, because the abandonment happens because consumers will walk in, they'll see these long lines and say, "Forget it." When you're going to the grocery store, you're committed because it's bigger format, and you don't always have that same visibility because lines are dynamic. Carl: 12:09 Yeah. Typically, convenience stores, an argument you'll always hear, or very often, at least is that, "Oh, well, most of our customers pay with cash. Self checkouts with cash is very expensive." Karen Webster: 12:22 Mm-hmm (affirmative). Carl: 12:24 They are difficult to use, a lot of maintenance, and all that. Which is true, to some extent. Then again, if you take the time and really analyze the data, you will see that, all right, you might have 55, 60, or even more, 65 percent cash, but you still have quite a lot of card customers. Karen Webster: 12:24 Right. Carl: 12:42 Why don't install self checkouts to address those customers? They will be happy, too, if they can come in and pay with their card and get out of there, instead of just leaving without buying anything. Karen Webster: 12:52 Mm-hmm (affirmative). Carl: 12:55 I always try to open the door, to think a little bit. Be brave, look at self-service. It doesn't have to be with cash, even though cash is king, cash is forever here to stay. Karen Webster: 13:11 Yeah. Carl: 13:11 Just be flexible, open-minded. Karen Webster: 13:14 A lot of retailers are looking at these smaller format stores. I mean, certainly, grocery, but when you think about the expanse of stores that are looking to locate in urban areas, where they don't have the ability to have the same size store, but want to be able to serve customers. I'm curious to get your thoughts on where to put some of these self-service lanes? You've got this consumer that is, perhaps, going to opt in to self-service because they're in a hurry, but the store operator wants people to, perhaps, see other things while they're there, making their little journey, making their little shopping journey, and pick up things that they hadn't planned to buy when they walked through the door. I can see the pros and cons, but I'm curious to get what's considered best practice there? Carl: 14:10 Yeah, we always try to push for having self checkout, or any kind of self-service solution, whatever you have, as visible as possible when the customer enters the store. Karen Webster: 14:10 Mm-hmm (affirmative). Carl: 14:20 When the customer enters the store, she or he will know that is a possibility for them when they go and checkout. I don't really understand, when they put self checkouts in a wall in a corner, or somewhere it perhaps fits from a floor plan perspective, and is not in the way for anything, but in contradicts the whole idea with the self checkout, right? It's more customer service orientated than ever, and you have to pay that price with floor plans, perhaps. I would definitely not put it somewhere where it's not easily visible. Yeah, that's my recommendation anyway. Karen Webster: 14:58 Seems logical to me. It also seems logical, as you said at the beginning, Carl, that you're not talking about data that requires a rocket scientist to go dig up, it's pretty simple…

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How Do Your Solutions Align With Financial Industry Trends? Nov 19, 2019

Show notes

Summary: In this podcast we will share an interactive panel session we recorded live from Intersect 2019, our marquee partners shared how their solutions and strategies align with financial industry trends and Diebold Nixdorf’s roadmap, such as; more integrated, with devices that enable better service delivery; more available, with optimized service capabilities that enhance the customer experience; and more efficient, with tools that enable you to achieve your customer-experience objectives. Guests:Vanessa Foden, Strategic Planner Retail Banking Hospitality & Education, Intel Ken Pedersen, Business Development Director, KICTeam Bill Stutzman, Director of Strategic Initiatives, Ventus Steve Gilde, Director of Global Product Marketing, Paragon Application SystemsShai Stern, Co-Chairman & CEO, CheckAlt Moderator: Scott Anderson, Brand Evangelism, Diebold Nixdorf Content:More Integrated Video: https://www.youtube.com/watch?v=hsIXFjt0IzA More Efficient Video: https://www.youtube.com/watch?v=w3yPIPmEuak More Available Video: https://www.youtube.com/watch?v=r6PktPP309g Transcription: Speaker 1: 00:00 In this Commerce Now podcast, we will share an interactive panel session we recorded live from Intersect 2019. Our marquee partners shared how their solutions and strategies align with financial industry trends and Diebold Nixdorf's roadmap. Such as: more integrated, with devices that enable better service delivery. More available, with optimized service capabilities that enhance the customer experience and more efficient, with tools that enable you to achieve your customer experience objectives. Devon: 00:31 Next up we have our diamond partner panel, so I'd like to welcome to the stage our Diebold Nixdorf evangelist, Scott Anderson. We're going to have our partner friends, Shai Stern from CheckAlt, Vanessa Foden from Intel, from KICTeam we have Ken Peterson and we have Steve Gilde from Paragon and Bill Stutzman from Ventis. Welcome to the stage everybody, thank you for joining us. Devon 01:09 Awesome. Scott Anderson: 01:14 Thanks everybody. We are between you and alcohol. I do apologize. And we all convinced in the back and we said "You know what? The modern tool that we would like right now is alcohol to help us with this next task", but we'll get you there soon. It's my distinct pleasure to welcome this panel. A group of panelists up on stage today to share with you a little bit about their organizations and talk about how Built To Connect and Built For More actually means more than just an ATM and solutions. Really, to run a banking environment, it takes a community, just like raising a child takes a community. And we have a community of people up here who really have a passion for our business and who help really transform the banking industry along with Diebold Nixdorf's partners and we're really proud to have them up here. So, I want a quick round of applause to welcome these folks up here. Thank you very much. Scott Anderson: 02:06 And while Devin gave us a quick introduction of these individuals by name, I'd love them to take a couple of moments and introduce themselves more personally and share with you who they are and what they do. Let's start with you, Shai. Shai Stern: 02:15 My name is Shai Stern and I'm the CEO of CheckAlt. I do not have a phone on my desk, I run my company on WhatsApp voice notes and I do have my emails printed out. Vanessa Foden: 02:28 I'm Vanessa Foden. I'm with Intel corporation as you noted, and I'm the director of strategic planning for our retail banking, hospitality and education group. I don't print my emails, but I did print some outdated notes for the show. Ken Pedersen: 02:46 Ken Pedersen from KICTeam and for those who don't know what KICTeam does, we manufacture and design cleaning products for currency, print and payment technology, so ATMs, POS terminals, check scanners, TCRs and... Yeah, thank you. Steve Gilde: 03:02 Steve Gilde from Paragon Application Systems. We're all about testing the payment systems. I will say that I could not have predicted that Ben ran 30 minutes over. Who knew that that future was going to happen, but happy to be here. Devon 03:15 Excellent. Bill Stutzman: 03:16 Hi, I'm Bill Stutzman from Ventis. Ventis is a networking company. We work with making sure that you're ATMs are up and running, so that your customers are happy. Scott Anderson: 03:25 Fantastic. Thank you very much for introducing yourselves. I think what we wanted to do today is really focused on all of the cerebral thinking we've been hearing about today. [what rounds 00:00:03:34] the Built to Connect and Built For More, but hone in a little bit on what does that mean and how do the individuals at this panel contribute to that and really make a difference in our overall industry as we go forward. This is a great opportunity for us to have some open conversation. We actually agreed that we don't have to always sit in our chairs, we can get up and kick each other if we don't agree, whatever the case may be. But what I'd like to do is, maybe tee up some questions to the individuals to get things started and of course we'd love to open it up to the audience and get some feedback from you and some direct questions as well. So, let's start with personalization. More personalized. Vanessa, let's start with yourself. What's Intel's point of view on personalization in this industry? Vanessa Foden: 04:14 Yeah, so let me start with, as noted, we're a retail banking, hospitality and education. So, we have the pleasure to see a connection point with use cases across these different sectors. And for retail for example, what we have seen is... And heard and everyone in this room has probably heard is, "Oh, stores are closing into retail as we know it, et cetera, et cetera". And really, what we've found is, that there's opportunity there and yes, there are definitely retailers that are not growing. But then there's the some that are going to different size format and then there's a few that haven't innovated and we know who those are. And yes, some of them are no longer with us. So, when we think about this with branches, we know that there are some shrink happening at the branch that could be in the actual space of the branch or closures. Vanessa Foden: 05:13 So, [Octavio 00:05:14] was talking this morning about 9.000 closures branches in the last five years. Now again, there's opportunity there, because there's different size formats and different technologies and ways to bring in our customers, because it's not just about one solution. And so, what we're really seeing, is opportunity. There is over a billion branches worldwide. So there is still that personal connection with the technology. So, the physical with the digital and that's the way we really need to think about it. And in the sessions today, which I really enjoyed them all, someone asked for a vote, I thought the two I went to are both great and very different. So I couldn't say one was better the other. But, it was very consistent in the message of opportunity and what's available to us in these use cases. So, it's really about understanding from the customer's standpoint, when they walk into your branch, how do they feel? Vanessa Foden: 06:14 Are they employees trained? Do they know how to engage with these customers? And on the flip side, digital. How do we know what our customers want? So, we're always thinking about what are our customers want? When do they want it, and what location should it be? And on and on and on. Right? So we apply that logic within our team to how is that relevant? Whether it is an Interactive Teller Machine, an Automated Teller Machine, a Virtual Teller Machine, POS system, et cetera. So that's how we really look at those use cases and try to apply it to make it personal, whether physical or digital. Scott Anderson: 06:53 Interesting. Steve, I'm going to challenge you a little bit. So, Paragon Systems and Testing, how would that bridge into the personalized world? Steve Gilde: 07:01 Sure. So, we heard this morning a lot about the customizable capabilities that the new DN Series will give to... That Diebold customers will have a chance to give to their consumers, right? You can do all sorts of interesting things, but the last thing you want to do is come up with an exciting new program, a new card, a new something for your high-net-worth customers and then have it fail when it gets in their hands. And being that we engage a lot on the testing side of the equation with customers, we hear a lot "Oh well, we couldn't test that with our host, because of this reason". Or "We forgot to test that because we ran out of time" and they wind up with a negative customer experience. And today, in the YouTube world, it becomes a very public brand damaging issue right away. So, with all the stuff that we talk about, all the changes and all the difficulty in projecting what consumers are going to want... We know they're going to want something, right? But it's all got to be tested and... Because you want that perfect customer experience every time. Scott Anderson: 08:04 Excellent, thanks. Any other comments from the panel? Scott Anderson: 08:08 If not, I'll tee up the next question. Shai, you got to have something to say. Shai Stern: 08:11 Yeah, I'll go for it. We look at personalized services a little bit different, in the fact that we are the ones who service you, the financial institution, on the ATM side. And we know that your job is to go ahead and to get the best experience to the consumer, to your customer, to your member if you're a credit union. So us, as a vendor to the financial institution, we want to make sure that you're able to provide the best services, the most advanced services, and the most personalized way. So, I have my cell phone on the website of CheckAlt.com as I try to give personalized attention and we give direct dials and direct emails and we make sure that the folks at the financial institutions are experiencing the best service possible, in order to recognize that checks, even though we all would have envisioned years ago that checks would have gone away, they are still here and rather healthy. So, our job is to provide the best services to you, the financial institution. Scott Anderson: 09:04 Excellent. Let's keep it with you and think about... More integrated. So, what tools in your organization are you bringing to the marketplace to help with that integration piece? Shai Stern: 09:14 You're staying with me? Scott Anderson: 09:15 I'm staying with you. Shai Stern: 09:16 Oh wow. So, what we look to do is, we are a payment agnostic company. So, I always say that my mother is never going to stop writing a check and my daughter is never going to start writing a check. And amazingly, my little, almost two year old grandson won't even know what a check is. But the fascinating thing is that at CheckAlt, our job is to be what I call "payment agnostic" and "demographic agnostic". And when I think about integration and when I think about how the financial institutions are able to take the legacy needs in their payments and their futuristic needs and the discussion around the electronic payments and realtime payments, we are there to create APIs to tie it all together to give a great experience. Scott Anderson: 10:00 Excellent. Ken, I'm going to kick it over to you, no pun intended with KICTeam, but what interesting insight capabilities are you bringing to the market? Ken Pedersen: 10:07 Yeah. For integrated, we are... The way we design our products and create them is very data-driven, right? So we want to understand where does dirt build up, how frequently does it build up and when does it need to be cleaned, because we want the right solution at the right time. So, today you heard from Chase talking about integration and data and using that data to become predictive. And so, we try to design our tools around that so that we can provide a better product in that... Ultimately, the devices that we support provide an ultimate experience. It's an optimal experience and that the end user enjoys using the device that we support. Scott Anderson: 10:44 Excellent. Vanessa, Intel Inside. I mean, what are we doing here from an integration perspective? Vanessa Foden: 10:49 Oh yes. But if you don't mind, I'm going to do a little bit of back to the future. Yes. So, in my previous role, I was an integration manager at a banking institution, and they had actually outgrown their software and hardware solution. And one of the things, and I'm sure it's like this today with a majority, if not everyone in the room, when you went to the internal webpage, the number one thing you saw every single morning is: "How many customers did I gain from yesterday?". It was so important to continually watch the customer base. And so what happened is, as they're worried about the customer base, we're in the background saying "Okay, we've outgrown our customers. And if we don't do something, we're going to let them down". At the same time again, what we've heard time and time again, is security is so important. Vanessa Foden: 11:46 Now, security has evolved into way more of a complex monster than it was back then. But it's really important at the end of the day why we're thinking about integration. We're thinking about "How do we protect the customers?". And that can be multiple ways. That is through security. That is through having remote management capability, so that if your system's down, meaning, down down, you have an opportunity to bring it back up or if you just need to do a patch or et cetera. So, we really think about it from all aspects and understand, at the end of the day, it's about growing the customer base and if you lose a customer you can... Well, you might be able to get them back. But it's really hard. Statistically, it's really hard. So we'll focus more on "How do we help with the overall security?". We help with the remote connectivity and we, as you know, we also help with our Intel Inside. We believe that our products are secure and do help provide the best solutions available in the market. So that's what we do. Scott Anderson: 12:52 Excellent. One of the other mores that we've heard about, and I think this is top of mind to a lot of the folks in the audience, is available. And my fellow bookend at the end here, let's... Bill, kick it over to you. Availability leads to enhanced customer experience. So how does this impact, how was this impacted by the network? Bill Stutzman: 13:09 Yeah. Availability is one of the highest priorities that we look at from a networking perspective, because all the stuff that everyone else is talking about, unless it can get from one point to the other, it's something that just isn't going to make your customer experience positive. And so, uptime is an extremely important element for us. And so, we look at it from different perspectives. First, where is it that you're putting your ATM? Your locations, are they at the branch? Are they at a sports stadium where 60.000 people show up and use them? Are they in a mall, or are they in a more of a less traffic area? Even to the point where we're out in remote Louisiana, where there's nothing else out there and we've been able to find a type of connectivity. And so, we look at what's the most important type of connectivity to make those networks work. And so whether it's cellular, whether it…

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Technology Has Come A Long Way, But What does the Future Hold? Nov 11, 2019

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Summary: Guest Ben Hammersley speaks on his take on how you need to be present today, so you can be future ready for tomorrow. Resources: Hammersley Futures Website Ben Hammersley LinkedIn Profile Diebold Nixdorf Website Transcription: Amy Lombardo: 00:14 Hello and welcome to COMMERCE NOW, your source for FinTech conversations and emerging trends. Today, I have the unique pleasure of talking with Ben Hammersley. He's a globe Trotter and an author an adventure seeker, and he has the most wicked handlebar mustache you've ever seen. And today he's going to give us his take on how you need to be present now so you can be future ready. Sounds easy. Right? Well wrong. Let's get Ben's thoughts. So, Hey, welcome... Ben Hammersley: 00:56 Thank you. Such a pleasure to be on COMMERCE NOW. Amy Lombardo: Oh good. Thank you for that plug. All right, so I'm not gonna be able to do you justice. So why don't you tell us a little bit about yourself? Ben Hammersley: So I'm one of those annoying people that disappointed my parents over the past 20 years by not having a job, they can describe, I'm currently a futurist or is a strategic foresight person. So I run a company called Hammersley futures, and we work with corporations and with governments and some high net worth individuals to sort of help them understand the future and specifically to help them understand innovation and the methodologies behind innovation. And that has come from 10 years of doing that. But, before that I was a technology journalist and I edited wired magazine in the UK and I was a war correspondent in Afghanistan and I've done many, many things. I run a digital studio making digital things for couture houses and luxury brands. And so I have this very strange background, which has come together into this one thing which is helping people understand the nature of innovation. Amy Lombardo: 01:57 Okay. And, and what inspires you about your work? How, did this whole being of Ben Hammersley come together? Ben Hammersley: 02:06 I think what inspires me is sort of two fold. There's this, there's the selfish reason, which is that it enables me to be increasingly eclectic and, and taking lessons and taking influences from, from lots of different things, which is very selfish because I'm, you know, I'm fundamentally sort of unemployable and the regular day job or you know, I'm, how would you put it neuro atypical. And so, so being, having a career where I can travel a lot and taking a lot of input and then synthesize it into something else is a great privileged but also the slightly wider thing. I think the thing that really inspires me over the past couple of years is that I think we've come to a set of methodologies and an approach to our work, which is genuinely helpful for people are at as sort of a holistic level. It's helpful for them in a business point of view, but it's also, I think it's genuinely helpful for them sort of personally and that sort of pastoral care aspect to it. If that's slightly weird way of putting it. Yeah, Amy Lombardo: 03:13 no, that's a unique identifier. Yeah. Ben Hammersley: 03:16 Is actually is very satisfying because, because I get a lot of people coming to me immediately after I get off stage routes out of a meeting or comes to me six months later and say that thing, that approach really changed the way that that I think and it's made my life or my business or you know, whatever it is that they're particularly interested in has made it better. And that's, that's incredibly satisfying. So that's, so I get to, I get to go away and be weird, which is, which is helpful and I, and I get to help people, which is great. Amy Lombardo: 03:47 All right, so we're at a banking conference here. Intersect 2020. So can you give me some examples of areas you think banks are missing the boat? You know, opportunities that they can be capitalizing on. Ben Hammersley: 04:08 So I, I think actually that question really highlights the difference between my approach and, and other futurists or other technologists approaches to these things, which is that I don't think there is a boat as it were or a collection of, of large boats that people are missing or not missing. It's very easy and I am very typical of the sorts of conferences and not just banking conferences but any, any industry conference to say, ah, you know, if you are not paying attention to, you know, subject X or if you're not paying attention to new technology Y then you are than you are falling behind and you're missing the boat as you say. And that's almost universally bullshit to be honest. In the vast majority of those conferences. And the vast majority of those subjects very specifically are things which are overblown and misunderstood and probably aren't at least right now relevant to the, to the individuals in the audience. Ben Hammersley: 05:12 So instead of thinking about the world as in terms of innovation boats that you can get on or not, and if you don't get on them, then you're going to be left behind to continue the imagery. Instead, what I try and teach people is to, is to look at the boat and see if it's something that is suitable for their business in the context of their business. Okay. So another way of looking at this is that the vast majority of futurism that I do, where I, in terms of when people ask me directly, you know, what are the new technologies that we should be paying attention to? Almost all of those technologies aren't things that don't exist yet. They're technologies which do exist and are being used a lot, but they're being used in another place. Okay. And so in a lot of industries you can be very, very innovative literally just by being up to date. Ben Hammersley: 06:02 Right? Banking in the U S is a good example of that. In that, in that if you compare banking in the U S too, as specifically consumer banking, if you, if you compare consumer banking in the U S to consumer banking elsewhere on the planet, you could very easily innovate massively radically for the U S just by being about five years behind Europe or you know, or 10 years behind China, right? Like if you really wanted it to be up to date, just big, just go and do what the Chinese are doing 10 years ago. Those sorts of things. So there is, there is a saying that William Gibson, the science fiction writer said that that the future is already here. It's just not evenly distributed. And that I think is very true. But, but all of these or this sort of talking around this highlights the thing that I like to talk about, which is that innovation is not a step change to a new future that everybody agrees on. Ben Hammersley: 06:54 Instead, it's a methodology of continuous improvement based on your own personal context and the context of your business. And that takes, that looks at those new technologies. It looks at those big boats as you say and says this, the suitable for us is does this, you know, yes, this is getting the front covers of the economist and everybody's very excited about it or whatever. But it isn't necessarily the thing that our customers are most likely to benefit from the most or our business will benefit from the most. And so what do we teach you is a much more holistic and continuous practice of continual mindful attention giving innovation on a daily basis rather than going, everybody needs to be on the blockchain or we're all dead. Amy Lombardo: 07:41 Right? You know, you have this unique thinking on this concept of being present or recognizing what is right around you and you have to be able to capitalize on that before you can look ahead and you maybe unpack that a little bit for me and just give a little more examples. Ben Hammersley: 07:58 Sure. Maybe like some concrete examples of what you see in your business. Sure. So, so let's start actually from the beginning of the talk I just gave, which is that because of the exponential rate of change that we have at this time on the 21st century and rate of change in everything. And you know, as I as I said on stage that that technology and society and culture and business are all interlinked in a fundamental way. When one changes then all the others change in the olden days. So 20 years ago, 30 years ago, technology was, was this specifically technology was the sort of layer on top of business. So you have business and then you have the technology that comes in and makes it a little bit more efficient. Right? Like this fancy bolt-on. Yeah, exactly. And you know, fancy precisely that. And, and the, the CIO of the business or the CIO. Ben Hammersley: 08:48 So the business was probably not even on the board. It's probably one level down at the same level as say the, you know, the facilities manager, something like that. Whereas today, specifically in, in data-driven businesses and financial services and banking are perfect example of that. Your business is what you do with your data and what you do with the data is fundamentally technologically driven and so everything is tied back to the technology, but that technology is so intertwined with the rest of the world that everything changes. Everything else, everything is as a codependent uprising and everything changed. When one thing changes, everything else changes because technology itself changes at an exponential rate because of phenomenon like Moore's law, which is this phenomenon that for roughly the same price every year, you can fit twice as many components onto an integrated circuit, which means that again, speaking roughly every year, computers get twice as powerful for the same price or the same power computer harms in price roughly every year. Ben Hammersley: 09:47 Because of that exponential growth and because exponential growth is itself incredibly difficult for human beings to comprehend because technology grows like that, the rest of the world changes at the same rate and therefore for a futurist like myself, making strategic forecasts, saying what the world's going to be like in 10 years time, I am completely lying, right? I'm just making shit up at that point because it's impossible to do so. And I think we only have to look back over the past three or four years or certainly the past decade and see how society has changed in the past decade or the last 11 years since the launch of the iPhone to today in every aspect of of human endeavor, whether you're talking about business or culture or society or politics or everything, all of that is now utterly unrecognizable compared to where it was 10 years ago. So if I come up to you and say, Hey, this is what the future of banking is going to be like in 10 years time, I'm [inaudible], I'm just making things up and I might be right. Ben Hammersley: 10:39 In which case in 10 years time you'll think I'm a genius, but I'm not going to be right. Right. And nobody's going to be right. And so if we, if you start from the basis, the fundamental basis that, that, that five year plans or 10 year plans are just wrong, then there has to be another way of living your life. There must be another way of actually doing your job if you're a member of the leadership team of a, of a bank. If your job, what to be on the board is to guide this organization into the future. And yet it is structurally impossible for you to predict what the future is going to be like, then you're going to need another way of doing it, right? And so what we came down to in terms of our work is that that other way of doing things is doing it as a continuous process one day at a time. Ben Hammersley: 11:24 And this isn't necessarily new. In fact it's, it's something that was in manufacturing. For example, Toyota invented the Toyota system in the 50s and, and that's what made Toyota. And in a cultural and religious context, you have a lots of people's spiritual practices, which are about continuous improvement. And you have lots of physical practices like yoga for example, where you can't win yoga, right? There's no end game of yoga, but it's a practice that you do every day and you get better at it, but you're always going to get back. You know, it's something you just do unless you're doing very yoga or wine yoga. Well indeed, but that, that, that does actually that's Dan, it [inaudible] other than that magnificent sounding activity, there's, you have to be in the States. This is what we do. It's exactly that. Goat yoga [inaudible] get tired after awhile. This is the thing. Ben Hammersley: 12:19 But the thing of the thing about all these prints is that they're continuous practices. And so we try and look at what would it, what does it mean if innovation is a continuous practice rather than a continuous [inaudible] gentle practice rather than a kind of violence every five years we take on the, the, the new technology and an upgrade to it or half upgrade to it because everyone's confused by it, which is the standard Silicon Valley model of innovation, which is every five years they invent a new thing and everyone goes around and stands on stage and says, if you want us embracing this new thing, then you're all going to die. And so whether it's blockchain or the cloud or big data or AI or whatever it is, and of course those things aren't, that's AIDS, it's just not true. But it's also just not a sustainable method of innovation. Ben Hammersley: 13:09 Right? Yeah. So, so I try and help people do that gradually. And so then the question is how do you do it gradually? And to do it gradually, you have to do it by really asking quite fundamental questions about what it is you do on a daily basis ordinarily and why you're doing them and who you're doing them for and who you're doing them with and how best can you serve those people or how best can you structure your teams or structure your internal processes so that you can put yourself in a position where you can better serve those people. And that involves things like employing more cognitively diverse teams. So you guys as many ideas and as much as much sort of empathy within your organization as you can. It means talking to your customers a lot more. It means paying attention to all of the processes you do and asking yourself on a, on a daily basis, why aren't we doing this in this way? Ben Hammersley: 14:08 Because a lot of the things that many companies do, I've done that way because somebody decided and then that person left and nobody can remember why, but that's way the way they've always done it. And so now that that approach is actually much more uncomfortable than doing the same thing for five years. And then having somebody turn up and say, Hey, now you need to do the blockchain thing. Or Hey, no, he needs to do the AI thing. It's much less comfortable in that everybody fit many people. And I think most people actually through human nature kind of prefer to just sit around doing the same thing and then just to be told what's due next. It's much more complex and much more uncomfortable to be continuously, continuously asking, am I doing the right thing and what am I, what am I? Yes, and what am I assumptions. Ben Hammersley: 14:56 Yeah, exactly. But it's also, it's a daily practice of what am I, what assumptions we make. Eating is what we thought we were doing is the concepts that we had 12 months ago. Are they still true? And asking yourself these fundamental questions. But if you do that, if you do that practice, then very rapidly you bring yourself as an individual and your team and your organization right up to the cutting edg…

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It's not a Technology Issue It's a Human One Oct 01, 2019

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With $48b in assets, Banco Popular is the largest financial institution in assets and deposits in Puerto Rico. In this podcast, you will hear from Moisés Pena Reyes, VP, Digital Banking for the bank. Moisés is responsible for driving and managing the ongoing evolution, innovation, and strategic direction of Banco Popular’s digital banking platforms by meticulously managing their customers’ journeys via mobile, online and ATM. Hear how his unique “digital-first” approach to their transformation journey has allowed the bank to have more active devices in use to engage with the bank, than actual customers. Resources: Banco Popular Website Moises Pena Reyes LinkedIn Profile Diebold Nixdorf Website Transcription: Amy Lombardo: 00:15 Hello again, this is Amy Lombardo and I'm your host for this episode of COMMERCE NOW. We're coming hot off of the stage from our last keynote presentation at DN Intersect, where Moisés Pena Reyes, from Banco Popular, hope I said that right and did you justice, Moisés . He presented the bank's digital transformation strategy. And so I'm lucky enough to be able to pull him aside for a few minutes here, and be able to share with our podcast universe, your story. It was fantastic for the group that was here, but I couldn't let you get away without getting in my hot seat here to talk to me. Moisés Peña: 00:54 Let's do this. Amy Lombardo: 00:55 Moisés is responsible for driving and managing the ongoing evolution, innovation, and strategic direction of Banco Popular's digital banking platforms. So that's enough from me and let's hear it directly from him. So, welcome Moisés . Moisés Peña: 01:10 Thank you, thank you. I'm excited to be here sharing one of my passions with you. Amy Lombardo: 01:15 So what I learned is you have 17 years at the bank, and 2008 was really when you started on this digital journey. So talk to me a little bit about how you came to this realization and what were the factors that led you to realize that digital is really the place to be for the bank. Moisés Peña: 01:36 Yes, I think that ... 2008 was the year that I arrived at the Internet strategy team, and our customers loved to online banking, and we measured that. And seeing how the volume of transactions were literally making a dent in their behavior and monitoring the tendencies and the new stuff that was coming out, for me was truly engaging to embark on that journey. In the beginning we were just a small group, that admires an alternate channel but we persisted and continue to challenge the way things were done. And day by day, we started to launch new services, transform experiences to the place that we are today, with over a hundred people actually looking out for the top strategy in the bank. Amy Lombardo: 02:37 And you said something that was interesting because you said channels, but really you don't want to think in channels, that word isn't even in your vocabulary. Right? Moisés Peña: 02:47 Imagine that. Alternate channels, no, it's our experiences, our customers and their expectations are the ones that are going to choose where and when they want to do banking. Amy Lombardo: 03:02 Right, right. Because customers say, "I need a bank." Moisés Peña: 03:05 Yeah. Amy Lombardo: 03:05 They don't care. They're not going to say, "I need to go digitally pay my bill." It's just the experience. Moisés Peña: 03:12 Experience and context, it is all about the context of the journey that our customer is going to embark. Amy Lombardo: 03:18 Right. Moisés Peña: 03:18 Yeah. Amy Lombardo: 03:19 Right. All right. Moisés , so you talked a little bit about the journey itself, but can you share some of the innovations that the bank actually deployed? Moisés Peña: 03:27 Yes. We run on a custom core and everything that we want to build, we literally have to build it. So that's a great opportunity for us. We have been at the forefront of iterating our new services. For example, we were between the top five banks in the U.S. to launch Apple watch support. So is really through the different skill sets that we have and do an innovation with them. And in a couple of weeks, we had our mobile app tailor for the Apple watch. Balances, transfers, transactions, payments, and we were in the first five banks in do that. Our cardless cash service, it has been truly revolutionary because of the way that we offer the service to the non-customer. So we did it also ourselves also with the help of our technology partner. And the beauty of it, is that our customers can send money to anyone, even if that person doesn't have a bank account. But we did it the way of making them interact with our app. So they will enroll in our app and get access to their cash but I can truly offer them new experiences via that app because they allow me to send them promotions and cross sell opportunities are beautiful. Amy Lombardo: 04:48 Right. Moisés Peña: 04:48 Yeah. Amy Lombardo: 04:49 So you mentioned something interesting in terms of, okay, "We were one of the first banks to do this," but sometimes that can have the reverse effect because consumers aren't ready or they're not trained, they can't adopt the technology. So how receptive was your customer base to the different phases of this digital transformation? Moisés Peña: 05:10 Yep. I live by the principle that our customers don't wake up in the morning saying, "I want to do banking today." Amy Lombardo: 05:20 Right. Moisés Peña: 05:20 Right. Amy Lombardo: 05:21 Unless of course you win the lottery. Moisés Peña: 05:23 Yeah. But we are competing not with other banks. We are competing with what their expectations are with the ecosystem of applications that they interact with day in, day out right? So in our case, digital adoption is robust. Over 90% of our customer base is enroll in digital banking. So our customers are great in that they are fast adopters, right? So we will try stuff, for example, the Apple watch example, it has a low usage and we learn from that. We did experiment, we [inaudible 00:06:00] the teams collaborated and we monitor their performance and the usage. And we saw that, "Hey, people will still wants to use their phone to do it not the Apple watch." Amy Lombardo: 06:12 I'm going to throw you a little bit of a curve ball here, is there anything that scares you about the pace of change? Moisés Peña: 06:21 Oh yeah, totally. And because of that ... because we are not competing with other banks anymore and we are a big bank on ... honestly, I want to move faster. But obviously Google, Amazon, Apple had a lot of more resources than we [inaudible 00:06:42] and a huge customer base. So what scares me is that we don't move fast enough to be part of that journey for our customers and lose business because a bigger player did it fast than us. So yeah, we keep pounding the rock and iterating and listen to our customers. That important thing. Amy Lombardo: 07:06 So maybe the goal we'll have here is, you know, we hear all about the Amazon effect or you know, you say you Google something, Google became a verb and maybe we'll have the Banco Popular factor right? And people will think about it that way. Moisés Peña: 07:21 Exactly. Amy Lombardo: 07:21 Yes. Okay. You mentioned Google and in your keynote presentation you said that you are embedding Google analytics into your ATM. I almost fell out of my chair because I have not heard a single banker ever say that. So how'd you come to that? Moisés Peña: 07:41 We love to experiment. We do a lot of proof of concepts. We have our own ATM lab in our building and being a group that they're ... our lives has ... have been helping the bank transition that digital transformation. When we started to HTML the hell out of those ATM screens, my senior web developer and on the team is like, "Hmm. HTML, CSS let's embed that we [inaudible 00:08:11] go there and start tracking the journey, the different touch points and," ... and that's the beauty of making your teams collaborate and expanding their skill sets, right? Because the idea came out of the team that didn't have anything to do with the ATM. Amy Lombardo: 08:30 Right. Moisés Peña: 08:31 And that's how it came to be and we implemented it, we tested it. We even have the dashboard seeing it now in ... in a couple of machines and for us that we believe in design and interaction design that help us to understand their conversion funnel at the ATM because it is a transaction and ... and understand the pain points, why a customer it's spending this amount of time in this screen versus the other one and how can I enhance that pain point. Amy Lombardo: 09:04 Yep. So Moisés , you're ... sounds like you're bringing things faster to your team than they can possibly handle your wacky ideas. So how do you keep those folks motivated? Moisés Peña: 09:16 They are part of what we are doing. I approach this in a very open way. I have conversations with them day in, day out. But the important thing is that you have to empower them to actually ... once you share the vision, I don't want to be the one that made that ... that vision a reality because it is impossible for one person to do that. So once I have those crazy ideas, I run the ideas by them and I empower them to make decisions and let them experiment and make suggestions. And that's how it ... it's truly a better conversation. And for example, for this keynote, I run the presentation with them two times. Amy Lombardo: 10:01 Oh, that's great. Moisés Peña: 10:02 And I let them critique me and give me pointers and made changes to the slides. So it is not Moisés' presentation is my team's presentation, right? Because it is not only my vision, we are in this together. That's the model that we use every day, day in, day out. We are in this together. Amy Lombardo: 10:21 If we talk a lot about the intersection of physical and digital, I mean we're here at our newest flagship event, it's called 'Intersect'. But I think I had this aha moment when you were talking because I was thinking, it's really not the intersection of physical and digital, but it's also this third leg of the stool. It's that human element, right? Moisés Peña: 10:47 Yep. It's ... I truly believe that this is not a technology problem. It is a human one. And once you break the silos and you empower your teams and help them get new skills, right. And encouraged them to, "I want you to collaborate with my interaction design," and run by him the idea that you have for that service, and that's when it truly became a richer product in the end is your teams the ones that make or break the customer experience. Amy Lombardo: 11:25 Yep. Moisés Peña: 11:26 Yep. Amy Lombardo: 11:27 Okay. So last question. Can you give us any hints at ... at what's next? Moisés Peña: 11:32 Hmm? Amy Lombardo: 11:33 For the bank? Moisés Peña: 11:34 Well we are ... I think that for me a huge realization was that for the first time all these teams are in the same building. Digital retail, cyber fraud and technology operations, we are on there going our transformation of ... on how we collaborate. So for me, next things is that it's super exciting to see how the ATM structure now is going to reflect the reality that when we merge all these wonderful people and visions, the ... the point of view of what we do explodes service wise. I am super excited on what we are doing with taking our mobile experience and adapting it to the ATM. So my customer would see the same payment flow that he sees in the mobile app. He will see the same flow adapted to a tablet in the ATM. So that truly motivates me and we are doing some interesting stuff with the analytics. Also, we are doing predictive models for cash replenishment also in house with machine learning. Amy Lombardo: 12:51 Okay, okay. Moisés Peña: 12:52 I always says that machine learning, artificial intelligence and cash recyclers, you have the opportunity to have a self sustaining cash replenishment operation. And we're doing interesting stuff with personalization and new services for our commercial customers. Yeah, I love what I do. Amy Lombardo: 13:09 You do. Moisés Peña: 13:09 Interesting times. Amy Lombardo: 13:10 That passion is recognized. And I thank you for sharing- Moisés Peña: 13:15 Thank you. Amy Lombardo: 13:15 This story with our listeners. So for those of you out there, keep checking back for more episodes from COMMERCE NOW and of course you can always subscribe on iTunes or your favorite podcast listening channel.

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Using Data to Increase Checkout Conversions - In-Store Sep 24, 2019

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Summary: Retailers and grocers want to streamline the in-store checkout experience and increase conversions. Diebold Nixdorf’s Carl von Sydow tells Karen Webster from Pymnts.com transaction data can help firms find the optimal checkout footprint that fits, on a case by case basis. Resources: Blogs: Relevant Retail - the New Norm Retail Self-Service: Today, it's WAY More than Self-Checkout Website: Diebold Nixdorf Previous Carl Von Sydow Podcast: Empower Your Retail Customers Transcription: Karen Webster: 00:12 Hey Carl, thanks for joining me today. I'm looking forward to having a conversation about data, in-store point of sale, and the insights that retailers can glean from that data. So thanks for making the time. Carl von Sydow: 00:29 You're welcome, no problem. I'm happy to be here. Karen Webster: 00:31 So, there's been so much written and discussed about improving the checkout experience in the physical store, and of course we're all familiar with the efforts that a number of players, obviously Amazon at the top of that list, have pioneered to really improve that experience. I'm curious to get your take on, first of all, the the landscape around, then the appetite for, using the point of sale experience, reinventing it and making it a more streamlined experience for the customer. Carl von Sydow: 01:10 Yeah. Well first of all, retail and grocery retail and all the other verticals, are going through big changes now in in the checkout process. As you just mentioned, Amazon is one example and we have click and collect, we have all different kinds of self-service solutions or other solutions. Customers has options when they go shopping. But we have a great number of stores and retailers that are still working with traditional retail, and the Amazon idea is good for some locations, but there are a lot of retailers they're still expecting, or looking, for solutions that are, perhaps, not reinventing everything but using what they already have and improving the shopping experience for the customer, with not investing in a lot of technology like the Amazon solution. Karen Webster: 02:03 Yeah, yeah. That is clearly, as you said, for a different kind of a store; smaller format, limited selection and so forth. But your point is a good one, which is stores want to make the experience better. No one wants to see long lines and there are lots of efficiencies that can be delivered within the existing store format today. What are some of the innovations that are helping drive that forward? Carl von Sydow: 02:31 Well, first of all, when we usually try to help a retailer improve their shopping experience in the checkout area and the efficiency and throughput and all that, we start with looking at the store data, what they already have within retail. One store location can be very different from another one. The customer demographies is different from one side of the town to the other. So by looking at the actual store data for a particular store, you can learn quite a lot about how and where you can improve the shopping experience in that particular store. And the T-log data, the transaction data, that will help us to analyze the customer work, or customer shopping journey, the customer journey. And through the store data that we can extract information, like for instance, the average basket sizes, the different payments options that they are using, cash or card payments, coupons, et cetera. How many transactions are used with age restricted items? That will have an impact on the different solutions for self-service that you can implement, of course. But looking at the data, the actual store data, you can get a long way of analyzing and simulating how you can improve that store without spending too much money. Karen Webster: 03:52 So what are some of the the insights? I was listening to you talk, I was reminded of an experience a couple of weeks back in a grocery store on a Saturday, and they didn't have that many items so I decided to do self-checkout. And the lines were actually, in the self-checkout lanes, deeper than I had seen them. So a lot of people are opting in. I happened to get into the line where a woman had a pile of coupons. That was painful because scanning those coupons and putting them in the little holder, I was like, is she ever going to finish? But you mentioned that as an example of a behavior that helps stores make decisions about throughput. What kind of insights, and therefore actions, does that one example provide a retailer in how to think about throughput and efficiencies at checkout? Carl von Sydow: 04:42 By analyzing their own transaction log data, their own facts in a good way. The retailer can optimize the different checkout options for that particular location, for that particular customer demography that they have. Or, like options ... You mentioned coupons, if we look 10, 15 years back in time, we have seen more or less only one type of self-checkout, which is the traditional basket-to-bag self-checkout, as we call it. With a large bagging area, with or without cash, pretty big units. And they accept cash, they accept coupons, et cetera, et cetera. If you look at the T-log data, just as you mentioned, customers with small baskets, typically self-service is very attractive for small baskets, obviously. But today what you can see in stores is that the self-checkouts are for all customers. You can go there and have a customer with 50 items and they are building mountains on the bagging area. And do you just want to go through with three items. So our idea is to look at the T-log data, analyze the different groups of customers that they have in that particular store, and then identify what different self-service solutions, or options, can you add to this checkout area to meet the different customer demands? So the customers with small baskets that just want to go through fast, they pay with credit card, they don't want to wait for someone paying with cash, et cetera. So you should have like a mix of different self-service solutions to meet your customer demands, and that's what the store data can help you to analyze and simulate. Karen Webster: 06:25 Is that, Carl, something that retailers are starting to wrap their heads around? I mean, this particular store, I won't name the brand, but it's pretty pretty big chain and it was interesting that all of the checkout lanes, self-checkout lanes, were identical. You could use cash in addition to cards, as you described. Any number of items could be moved down the conveyor belt, and of course those coupon things, which I found very annoying because she had a lot of them. So are retailers starting to adopt these new ways of thinking about narrowing the options for self-service in some lanes? Carl von Sydow: 07:09 Yeah, I would say more and more retailers are doing that. For quite a while the retailers have been working through the thinking about averages, and one-size-fits-all kind of mentality, and that's what we see on the markets today. And now they're slowly realizing that that is not necessarily what the customers want. There is no one-size-fits-all in self-service anymore. And the customers, they are learning and they are developing and they're doing ... They're fast. They are expecting retailers to offer continuous improvements also in in the checkout area. We have seen quite ... Hasn't been so many different developments for the traditional basket-to-bag self-checkout. It looks more or less the same today like 15 years ago. And the customers, they're trying to ... They are expecting something different now and the retailers are realizing that, but they don't really know how and to which extent they would add like fast lanes or express lanes. And then especially in the United States to go card only. It's a pretty bold decision and a lot of retailers are afraid of that. But if you look at the store data, you can easily see that there is a market, if you like, internally, for that store to actually have card only self-service solutions to meet those customer's demands. Karen Webster: 08:33 What are some of the more innovative options that retailers are embracing who are looking at this data, recognizing that averages don't cut it, and they really do need to be more thoughtful about about checkout options? Carl von Sydow: 08:54 What different self-service alternatives there is, or what do you mean? Karen Webster: 08:56 So, when you think about self-service alternatives, and just looking at checkout holistically, what are some of the more innovative retailers doing to try to make that experience better? Carl von Sydow: 09:07 Yeah, well, what they are doing, they're mixing different checkout solutions in the same store. Some stores, already, still today, only have normal lanes. Then, a lot of stores, they have a mix of normal lanes and traditional basket-to-bag self-checkout. And now we have seen, like Giant Eagle, Kroger, Walmart did some tests, and now Sam's Club is doing, to also add personal self-scanning. Where you have this handheld device that you go shopping with through the store. We have retailers adding smaller kiosk-like fast lanes without cash, and very few items. So some of the more aggressive retailers, they are mixing different self-checkout, or self-service solutions, within the same store. And that is coming more and more, but it goes a little bit slow but I think we will see a big change coming, you know, two years. A lot of the interests that we see right now from retailers on almost any market in the world is particularly towards the smaller self-checkouts, the fast lane type of checkout. Karen Webster: 10:21 Yep. Yeah. You know, it is also just a wholesale shift right? From from checkout being something that is in the lane, as you call it basket-to-bag, being handled by store personnel to, for the sake of efficiency and convenience, the consumer is willing to take that responsibility on themselves. I mean, and including order ahead and pick up curbside where everything now is being driven by convenience and efficiency. So I can see mixing the format. But you know, most people when they're in the store, they want to get in and they want to get out. And they look for the lines that have the fewest people in it. Sometimes regardless of whether that's self-checkout or not. Carl von Sydow: 11:08 Yeah, I mean we, when we talk about conversion rates for instance, which means the customers that are buying stuff versus customers leaving the store empty handed due to long waiting lines. So the conversion rates, the retailer wants a high conversion rate, which means that all customers that go into the store should buy something. But if the lines are long, then they will leave the store without buying anything. And to add the opportunity of different checkout options, you will have a higher throughput per hour, or per time. And you will increase your conversion rate. Definitely. I think we have some interesting examples from projects that we have done. One, for instance, we had a project where we implemented a self-checkout, these fast lanes self-checkout, and we had a terrible estimation of 30% adoption rate in the project. After just a couple of weeks we were up to 37%, and now a couple of months in, we are up at 44%. Karen Webster: 12:21 Wow. Carl von Sydow: 12:22 So the adoption rate is high. What we have seen at the same time, in that store, is that the conversion rate has gone up, of course, but the average basket size went down. And that, for a retailer, is like a red alarm bell because they want the average basket size, of course, to increase, not decrease. But when we looked at the store data, we saw that, well since the conversion rates increased, but we saw that the customers with few items had increased dramatically because of the faster throughput through the checkout area. So since this store then had more customers with fewer items, the average basket size went down. So actually it was a good sign, but it was an alarm bell that no one really expected. Karen Webster: 13:08 Well, I would imagine that, you know, one of the explanations, who's to know for sure, is that people are shopping more frequently. So going to the store a couple of times a week rather than once a week with smaller basket sizes to get in and out. So I mean that could be one explanation. But I mean, I'm curious about, in that example, adoption rates going up; what does that say about the inefficiencies of the store overall? I mean, if I'm that particular retailer, I'm thinking, wow, more people are using self-service, that must mean that the traditional checkout it's pretty friction laden for consumers. Carl von Sydow: 13:47 Yeah, but I think, again, if you look at the customers in any store, they have different customer journeys. A customer with a large basket, with coupons, paying with checks, paying with cash, they look for [inaudible 00:14:01]. Interaction with people, they like to go through the normal lane. But then you have the efficient customer that just wants to go in and out as fast as possible, pay with credit card, no coupons, and they do like the social interaction with people, but the speed through the store is more important for them. And when they go, when they come to the checkout, that's also important to remember, when the customer comes to the checkout, basically the customer journey is over. The only thing they want to do is to pay us as fast as possible and get out of there and go home or wherever they are going. So the whole shopping experience ends at the checkout area. And by offering different options for that, you will make more customers happy. And if you have coupons, if you have checks, if you have cash, then you can go to the manned lanes and go through that part of the checkout area. But if you don't, you want to be able to find a way to leave the store without waiting for people with tons of coupons in their bag. Karen Webster: 15:07 Carl, I'm curious to get your thoughts on how self-checkout and the opportunity to further, I guess, curate that experience ties to loyalty programs that stores may have. I mean, one of the things that's interesting about the Amazon Go stores is that you have to be a member of Amazon Prime in order to do that. I mean, that's just sort of the Amazon model. But but grocery stores have loyalty programs that most people participate in, and I'm curious to know whether that's been ever considered, or even appropriate, to think about. Certain lanes are available for loyalty club members, or certain experiences are, et cetera. Carl von Sydow: 15:54 That's a very good question. One of the reasons why we have been stuck with the traditional basket-to-bag self-checkout is that it has built-in security. You have the weighing scale bagging area where the self-checkout will always verify the weight of the item with the weight database that you have. And you can trick everything, of course, but there is a security feature in this traditional self-checkout. However, it makes the whole checkout experience a little bit annoying, especially if you have these unintentional blocks, the weight it doesn't always fit, and you have waiting times for this and that. So the throughput is definitely affected by that. If you leave the security features outside, then typically a lot of the retailers, they want to have some means to identify the customer, and the loyalty program is an ideal way of doing that. So a lot of the retailers that take away security features from the self-checkout, like these fast lane self-checkouts without weight security, they want to add the loyalty program to that so they at least can identify the customer. And the customer will feel, well, the retailer knows who I am, I have s…

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Cloud-based Banking has Come of Age Sep 10, 2019

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Summary: On this episode of COMMERCE NOW, we discuss how cloud-based banking is really booming and what FIs can do to be on the front side of this upswing. Related Content: COMMERCE NOW Site Diebold Nixdorf Site Transcription: Scott Anderson: Hello again. This is Scott Anderson, your host for this episode of COMMERCE NOW. As some of you have heard, cloud-based IT is booming, even with the core applications of the banks. Scott Anderson: Although migration from conventional IT infrastructures to the cloud can be complex, once it's done, it offers interesting opportunities, not to mention enormous savings potential. Scott Anderson: Today, I'm joined by Michael Engel, Managing Director and Vice President for banking software at Diebold Nixdorf. And on this episode of COMMERCE NOW, we will [00:00:30] discuss how cloud-based banking is really booming and what FIs can do to be on the front side of this upswing. Scott Anderson: Welcome, Michael. Thanks for joining me today. Michael Engel: Hey, it's a pleasure, Scott. Thanks for having me. Scott Anderson: Before we dive in, Michael, I know you quite well, but why don't you begin by telling our audience a little bit about yourself and your background? Michael Engel: Thank you, Scott. I'm in the industry for 20 plus years now and always worked in software and financial industry, [00:01:00] so I have seen a lot of iterations of technology. So all the way from the good solid host-based environments that a lot of FIs are still running, to now all these latest technologies driving banks and FI's around the globe. Michael Engel: So therefore, I would say I have a good view of the historic aspect, [00:01:30] but also as part of my job, talking to customers around the world, and also to technology providers around the globe, have a fairly good understanding of the dynamics in different geographies and markets, towards what is still under discussion and what is basically real and what is in production today. Scott Anderson: Excellent. [00:02:00] And really appreciate that you're joining us with that global point of view. And if we target our focus then to today's topic, can you kick us off and briefly discuss cloud-based software and why you think that's been growing in popularity lately? Michael Engel: Well when we talk about cloud-based software, it is more than just putting a piece of functionality into a central located data center [00:02:30] that is accessible through standard protocols and is hosted by a central organization that gives basically, a cost advantage based on a dynamic usage model. Michael Engel: That is what most people immediately have in their mind, but it's much more than that. It is all around technology around that, so the whole idea of containerization, the whole idea of APIs [00:03:00] to be used and consumed and the whole tools in order to create software, to test software, to deploy software to run and operate. And all of these pieces are now coming from the mobile phone. Michael Engel: This is really, really cool and a bunch of nerds across the globe are looking into that. Into it has become [00:03:30] now, into a state of maturity where, now conservative organizations such as banks are seriously looking into that and the front runners are actually exploring that mission critical application, post development and operation and so showing extremely good results. And then that is what brought us to the point [00:04:00] that from being a buzzword and being the cool thing around the block, it has matured into, it is actually real enough and mature enough for a mission critical environment such as special services industry. Scott Anderson: Interesting. So I know that there are several trailblazers out there globally and you've touched on a couple of their examples and aside from costs, what other [00:04:30] benefits, you know, if we have some financial institutions listening in today, how can you assure them that there are benefits beyond cost with cloud based software? Michael Engel: Well, again, let's, let's fundamentally look at what is happening elsewhere in the industry. And then if you look at, for instance, companies such as Amazon, if you look into Amazon, not as a cloud service provider but as a retail organization, then by [00:05:00] and large the entire Amazon platform. So the shop that you see where you go and look for stuff to buy, but also the whole logistic engine, even engine behind that, everything is a very dynamic infrastructure. Why? Because Amazon has realized that they're living in a very fast changing environment and if they're not able to [00:05:30] adapt changes from the market, changes from customer behavior, integration of new products and services into their offering, then they're falling behind and they no longer stay relevant for their consumers. So as a result, they have worked intensively with other technology providers on a end to end, so called continuous improvement, continuous deployment, delivery chain, [00:06:00] tool chain. Michael Engel: And as a result of that, they are basically creating an ongoing living organism of software that will evolve itself every give and take 12 months. So basically no code in there is legacy code. Everything gets constantly updated, enhanced, improved, and by that, change. Now that is exactly [00:06:30] how a lot of these smaller fintechs are today operating. They are not better or smarter, they are simply faster. And they are faster by utilizing latest technology in order to adapt to customer demands. And in order to automate servicing their customers, you do this by using software which is obvious. But only if your software infrastructure is able [00:07:00] to adapt the rate of change, then you have a real chance to stay ahead of the game. And that is what if you now think about the traditional bank, one of the biggest headaches that the CIO of the bank has, because by and large, the core functionality of the bank and there are parts of bank sells basically virtual parts, mortgages, [00:07:30] not tangible, consumer loans, not a tangible product. Michael Engel: It is basically a digital product. Now if your core infrastructure that creates those products, that manages those products that sell these kinds of products, is sitting on a whole space infrastructure that's 30 years old, and it's very hard to change and very hard to maintain and basically your IT guys are telling you, "Well once or twice a year we can do a minor update [00:08:00] to that system but won't touch anything because it might break." Then this is not really exactly the agile environment that you are looking for in order to compete in a faster and faster moving market. Michael Engel: So and that realization triggered for a lot of front running banks, the question of how do I get to a end to end tool chain that allows me in the same [00:08:30] way like Amazon does it or other tech company do it, how can we utilize really an end to end agile process of deployment? Because today a lot of these agile processes stop right in front of production. So you have people in an agile setup developing new functionality but then the host team says, "Well guys, very nice but two [00:09:00] releases a year. Thank you very much." Michael Engel: Now how to get there. And then this is exactly where we have worked with major FIs to have a look, the tool chains and the technology from how you define functionality and how you develop functionality and how you test and how you deploy functionality. Michael Engel: How to bring that into the context of your requirements of a FI with regards to stability, [00:09:30] reliability and also adding the context of prebuilt microservices functionality for a financial services organization. And that is basically the underlying driving force here. It is not so much predominantly to get the cost advantages of cloud deployment. It is getting into a much more agile way of creating new services for the bank's customers, [00:10:00] and then on top of that be able to deploy the new much more cost effective environment than before. Scott Anderson: Hmm. So if I think about the conservatism of most financial institutions, at least historically speaking, certainly the CIOs are looking at this with an open mind. But if we, if we think about the paradigm of legacy processes like a C-Systems, you know, this demand to go agile yet [00:10:30] still have happening to be waterfall at the end delivery point. You know, how does cloud based software, how would we articulate this to the people who actually have to do the heavy lifting in the financial institutions? Is this, are we automating steps and making their life easier that have been manual in the past? How would you describe that to them? Michael Engel: Well yeah, for a certain time you're actually doing things in parallel. So what you usually do is a step by step approach. You take a certain set of functionality [00:11:00] and you would move that off your existing, cost heavy infrastructure and put that into a much more lightweight or a cost effective production environment. And by the savings you are getting out of that you have so to speak freed up budget for new innovation investments. Michael Engel: So, and when I say that it is, it is a process that takes some time and yes, you are at risk in a risk [00:11:30] environment where you need to keep running the bank within the existing infrastructure that you have inherited, while you're building up a new infrastructure that allows you to create in the CICD, the paradigm code and the creation of the code, the deployment of the code, the containerization of the code and then the hardware permission and software orchestration [00:12:00] is at the end of the day fully automated. Michael Engel: So a lot of the tasks that have been very manual and therefore costly and therefore a lot of dependencies including all the test and integration work is not really end to end automated. So whenever today developers in our organization create some new code, every night that runs through automated processes, will automatically be packaged into containers, will automatically be provisioned [00:12:30] to the, to the respective part. We're using for instance tangible scripts for the software orchestration. We use open source technologies such as the need is, and then we deploy that really in an open source environment. And then a lot of this functionality that does work for you, in the past was highly proprietary, highly costly. And then in the meantime it is in its majority based on open source and that open source [00:13:00] because it's now used by millions and millions of people has reached a robustness level, a maturity level and gives you cost performance ratio that is really unseen before. Michael Engel: And that makes it so exciting. So it has moved from, again, out of that nerdy corner into really mainstream availability and robustness. And this automation [00:13:30] then allows us to step by step, move more chunks on the existing whole space infrastructure over to this type of environment. And you get with every step that you take more and more cost advantages and gain more and more speed. And that is what FI's are now looking into. So what are some of the less mission critical things that I can get some early wins on? Can test the waters, I can get some experience with this [00:14:00] technology. And as it shows improvement in cost advantages, I can basically migrate more and more steps, chunks from my dynamic key infrastructure over to that cloud base environment. Again, the cloud at the end of the day is just the representation of the operational infrastructure. Behind there is much more of the, the adoption of open source technology, [00:14:30] the adoption of that CICD thought process and the adoption of tools and technologies. Michael Engel: Just to give you an example, what I mean with that. So if we are addressing topics such as the infrastructure for managing payments within the bank where more of the core parts of the bank to the retail bank today. Then we usually do that in a very high available, high available fault tolerant [00:15:00] environment. And in order to do that, you usually have effective deployments of those solutions. And as of today, if you want to run really even active/active mode, you need to synchronize data to keep those two sides that run active/active in synchronization. Now there is proprietary, very good software available to do that. But it's also very costly. And as of today we [00:15:30] are able to do this really at a fraction of the cost with open source tools and technology. So we're using, for instance, for the data replication between sides an open source technology called Kafka, which is performing extremely well. Michael Engel: Even in the largest installations with the largest data loads that we are working on, even those top tier FI's. So just a little example of in the past, [00:16:00] very specialized proprietary software, very costly, today can be easily replaced by open source technology. However you still need to have the knowledge on how to utilize that technology in order to ensure data integrity and then synchronize data across sites. But again, just a little example of step-by-step replacing traditional very high costly software infrastructure by open source [00:16:30] technology in the cloud. We have done this now with a bunch of FI's globally, successfully and the results are amazing. Scott Anderson: So if I have my chief operating hat on or chief information officer hat on, you're convincing me of the benefits, but I'm a little reluctant to buy into how easy this conversion would be. Can you talk about what typical conversion processes look like to go from my traditional heavy data center operation to a cloud based operation? Michael Engel: [00:17:00] Don't get me wrong. I'm not saying it's easy, I'm saying it's doable. But it takes knowledge, it takes investment and it takes some time in order to do that and the majority of the focus should be really in understanding, managing and operating that true change. And then that is much stronger as it is doable, but you need to have a set of good people that can help you [00:17:30] with that. And you need to have also a strategy on how to do it in the step by step migration because again, at the end of the day you still need to run a bank. However, the results and the benefits you are getting out of that are so immense, that tt is really worthwhile your. But the caution that I'm taking here is, it's not like snapping a finger and you're there. It is new technology, [00:18:00] it's mature technology, but it is also still a complex thing. If you have some help and you do have some guidance it is really manageable, and again the results are extremely beneficial. Scott Anderson: So when you keyed on how this can be considered somewhat newer technology and I guess the risk adversity of, of some financial institutions, they have more of a wait and see mentality or I'll, I'll follow the leader, see how they do [00:18:30] you know, what is your view on how cloud based products have become better or more reliable over time? Michael Engel: Well again the, the reliability comes through the mass usage because every system is only as good as it is fault tolerant, and how many hours went into usage and finding of bugs and eliminating bugs. And that is to a large extent [00:19:00] the advantage here of the open source technology community and also the cloud based technology. Because of the wide usage, all the cloud technology in production today and also the open source technology and tools around that, due to the fact that over the years now millions and millions have used it, it has reach…

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Streamlining the Store to Simplify Shopping Jul 31, 2019

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Summary: On today's podcast, we welcome Joe Skorupa, editorial director and feature blogger for RIS News and Ensemble IQ Media Portfolio. Recently RIS News released a targeted research study and article on streamlining the store to simplify shopping. Today, we discuss this research and some of the main challenges retailers are dealing with in their shopping journey's. Resources: Infographic RIS News Targeted Research: Streamlining the Store to Simplify Shopping Blog: Retail Self-Service: Today, its WAY More than Self-Checkout Relevant Retail: The new Norm Scan, Bag and Go - Self-Scanning Technology Empowers Consumers to Shop with Ease COMMERCE NOW Site Transcription: Jerry Langfitt: Hello, I'm Jerry Langfitt and I'm your host for this episode of COMMERCE NOW. On today's podcast, we'll welcome Joe Skorupa, editorial director and featured blogger for RIS News and Ensemble IQ Media Portfolio. Joe is frequently named as one of the top influencers in retail and technology and is also frequent speaker at conferences such as NRF, Big Show, amongst others. Welcome to COMMERCE NOW, Joe. Joe Skorupa: Hey there, Jerry. Glad to be here and I'm looking forward to our discussion. Jerry Langfitt: I am too. Joe, you recently did a [00:00:30] study and article on streamlining the store to simplify shopping. We're excited to listen about this research, but let's start at a higher level and talk about the trends affecting the industry right now. What are the main challenges retailers are dealing with? Joe Skorupa: Yeah, Jerry, the study touched upon the fact that shopping is really a journey for consumers and honestly any friction they feel, anything that doesn't smooth things along and speed things up and make things more convenient for them [00:01:00] is not going to provide high customer satisfaction levels, and we know that retailers are searching for that. So from a macro level, this study, I believe, resonated with two big challenges that retailers are facing today. And the first is fast moving consumers and rapid fire changes in shopping behavior. And by that what I mean is that shoppers move onto the next viral trend or the next influencer or tech innovation before retailers can catch up. And essentially the pace of change is accelerating. [00:01:30] And this has significant consequences, especially for slow moving retailers who are dealing with falling foot traffic in stores, empty malls, and of course they're dealing with Amazon and Walmart growing ever larger. Joe Skorupa: I mean these are giants to begin with and they're not catching up to the giants. In fact, the giants are growing bigger. And I have nothing against Amazon or Walmart. I think they are outstanding retailers and exemplaries of what to do and how to change. But it is effecting [00:02:00] all the rest of the retail industry. Joe Skorupa: Now the second big challenge for retailers, I believe, is that they must recognize that they have to continually make investments in their businesses to keep up with consumers. Just because you have a brand and it's working, and it worked for a long time. The challenge is that you have to continually reinvest in your business. And if a retailer can't implement new innovations and new technologies and do them profitably [00:02:30] ... See that's the key. It's not investing, it's investing efficiently and profitably. And if retailers can't do it efficiently and profitably, then they're just increasing their debt, increasing their risk and squandering precious resources. Joe Skorupa: So to sum up, my two main points are, it's a fast moving, accelerating consumer marketplace. And secondly, the challenge is finding the right way to do investment to reimagine your business. Jerry Langfitt: It's interesting that you that, because this kind of [00:03:00] leads right into one of the first questions I had where one of your first figures, key findings in the study is that retailers are split on the topic of self-service technologies. The ratings of the question gave everybody a five out of 10 then it would almost make you think that self-service technologies is not very important, but underneath the data, that kind of, it kind of told a different story, didn't it? Joe Skorupa: Yeah, it did. And Jerry, I do data analysis all of the time. And I also [00:03:30] believe that the RIS news readership represents the entire retail industry. So when I pull data points together, I look at it as a retail industry. And you're right, the average score came out kind of a middle of the road score on the level of importance. But then I looked into it and there are patterns that you can find when you dive into the data and filter it. And when I filtered this data point by [00:04:00] revenue size, I've found that there were two large camps, two blocks of retailers. And retailers with less than a billion dollars in revenue were more likely to rate self-service in stores lower than tier one retailers, the bigger retailers. And so the question then becomes why. And because every net new technology requires net new investment, well that represents a challenge in itself, especially to slower moving and conservative retailers who [00:04:30] are established in their ways. Joe Skorupa: Now, larger retailers have to support the vast size of their enterprise in a different way. They need constant reinvestment and innovation and and just moving forward. Because if they lose their momentum and lose their relevancy with a large part of the population, which is their shopper base, they're going to fade in the shopper's mind and the shoppers will move elsewhere. So large retailers have to stay relevant on a broad national [00:05:00] level. So they're constantly testing, developing and researching new technologies. Joe Skorupa: And during this process they have learned about the value that self service technology offers to shoppers and to their stores financial performance. Now are those same things at the large retailers learned also true for smaller retailers? Yes, there are, there is value to self service technology and it does provide shoppers with a streamlined experience and it does help the store's financial performance. But the smaller retailers are not doing [00:05:30] all the due diligence that the larger retailers are doing. Jerry Langfitt: That's really interesting. It would almost seem to think that the larger retailers would also drag the industry in a certain direction and- Joe Skorupa: Absolutely true. Jerry Langfitt: Almost force, or at least make it hard not to change, to go in that same direction. I mean we see that right now with with McDonald's, installing kiosks across their entire footprint. It's kind of a watershed moment where then other retailers, QSRs mainly would have to say, okay, if I want [00:06:00] to compete I have to do, not just a me too, but I have to do something. I can no longer sit on the fence or it's gonna affect my revenue stream. Joe Skorupa: Absolutely. Yes. So talk about having it your way and maybe that's the theme of a different QSR, but nevertheless it fits our discussion here. Having the ability to do self service is the ultimate have it your way experience. Jerry Langfitt: Now, so look forward. Let's split this into two groups then. The two groups you pretty much indicated. What are the benefits [00:06:30] they are getting from more self service? Joe Skorupa: Well our study found that the primary benefits delivered to shoppers. And we asked about benefits to shoppers and benefits to retailers and they are different questions and they got different answers. So the primary benefits, I'll start with shoppers. There are three primary benefits and they are checkout, payment and price checking. Joe Skorupa: Now each of these things makes a shopper experience quicker and easier and [00:07:00] also it has to be said that shoppers feel like they are in control of the experience and all of these things are very positive for the shopper in any sort of consumer experience in a store. Joe Skorupa: Now the benefits are different for a retailer but possibly even more important. For a retailer, there is an improved level of customer service. Let's face it, this is something that a customer might need, might want, [00:07:30] and there it is. They're able to use it. That is customer service and also when that happens, customer satisfaction metrics are going to be increased for this store. All of these certainly stimulate return visits and that is a key to success for retailers. Joe Skorupa: And speaking of metrics, by the way, I mentioned customer satisfaction metrics. Another big benefit that retailers get is the ability to gather in store customer data through these touch points. Now self service devices are interactive [00:08:00] touch points. The consumer is actually giving the retailer information by the behaviors that are occurring on the self service device. Now this behavior can be examined and tell a retailer about something about how the store operates, about how the shopper's responding to promotions. It tells retailers, you know, what the impact of technologies are in the stores and potentially all of this information can be delivered to headquarters [00:08:30] in a real time or near real time. Joe Skorupa: And you know that's just the beginning. Many other data points can be gathered and just leave it to your imagination. You can add them to the self service process or not. But the choice is up to you. Really, it's an infinite horizon for retailers. Jerry Langfitt: Now, I kind of see it as a couple different ways of why they're getting a benefit too and moving in this direction. One, technology advancement. To name the McDonald's story, again, everyone has iPads. Even my mother has an iPad, so it's a [00:09:00] much more approachable device at this point. And then cost points have come down that I can take it across 14,000 locations and it's no longer cost prohibitive. Jerry Langfitt: And then the second is people are more used to this kind of technology as well. So cost of technology is coming down and everyone is a bit more adaptive to it. And a lot of people talk about the Amazon effect, and I don't want to talk about Amazon Go, but it's more about going on Amazon or going online and being able to [00:09:30] do what I want and do what I need when I want it. And it seems like self-service and ... a colleague of mine said the psychology of self service is, it just empowers you. Jerry Langfitt: And if I'm standing in line and I can just do it myself, it's better than standing in a line. So that again I think ties back to the customer satisfaction as well. It's like if you're giving me a path to take care of myself, I'm going to be more apt to come because I want control of my life more than I normally have [00:10:00] it. Are those two points something you could agree with and think the data kind of points in that direction? Joe Skorupa: You know, empowering the consumer is definitely a sure way to increasing their return visits. And that is clearly what is happening with this technology. And the other point you made is that the general population is tech savvy at this point. And I think that's absolutely true. I mean, I think we probably won't even have this discussion much anymore. [00:10:30] And honestly, if a retailer even brings up that point in a board meeting or in any interdepartmental meeting and saying, well, you know, my customers, they won't, they don't even know how to use technology. Well, I think pretty soon that retailer is going to get laughed out of the room because we've just crossed that line. We are tech savvy. Tech is embedded into everything part of our lives, homes, and work. So I don't think that's going to be a much of an issue. Jerry Langfitt: Well, [00:11:00] and I always use my mother as a great example because when she can text me a cat video or send me an Amazon gift card electronically, I'm like, oh, we're definitely in a new age. Joe Skorupa: Absolutely. My mother's playing games all day long on the computer. So it's just amazing. Of course she's retired so she can do that. Jerry Langfitt: All of our goals. So we talked about those moving ahead. Let's talk about those dragging their feet or just aren't ready for it yet. What do you think some of the challenges they're looking at to move forward with technology that can help? Joe Skorupa: [00:11:30] Well yeah, you know the study shows that there are foot draggers out there or feet draggers, as the word may be. Almost 50% of the retailers in our study show that they have change management issues. Joe Skorupa: And what does change management resistance mean? Well I think that in many cases it starts at the top. I think that there are C level executives that are not [00:12:00] green lighting some of these capital investments projects. But I don't think it's just that. I think that the other points in the study data show that some of the resistance is found in the stores. Joe Skorupa: And two of the points that store operators bring up where we find this resistance are due to operational requirements such as re-engineering store formats to accommodate the self-service technology and re-engineering associate processes as well. But I don't ... Even [00:12:30] though this is a large group of retailers, you know, a little less than than half in our study, I just think this is an old story in retail. Joe Skorupa: In other words, this resistance to something that is, you know, net new and how they've always had their stores. And this resistance shows up so frequently that that's the reason that many of us in the industry, many who are looking ahead at where retail is heading, we follow the trends and the leaders. They're usually a couple of years ahead [00:13:00] of the rest of the industry and the rest of the industry follows. Joe Skorupa: And as you pointed out, there are leaders in retail right now that are deploying self-service technologies. That is increasing. And the numbers that we show here, where the resistance is strong, is certainly going to be that resistance is going to be a broken and the barrier will come down. And this will happen in the next year or two and we'll see a different number then. Jerry Langfitt: I wonder what they need to convince leaders. I wonder if their back [00:13:30] office systems can support it. Are we dealing with antiquated technologies and system processes? You know the old way of retailing. Because we're seeing at Diebold Nixdorf, we're seeing self-service going into areas that we never would have dreamed of five, 10 years ago. I think people still have an idea of self service, self checkout is the grocery store and that's it. And we're seeing it in fashion. We're seeing it in convenience stores and we're seeing, even in groceries, many different ways self-Service [00:14:00] comes out. Curbside pickup, order online, order on my phone, delivery, scan and go. Walk through the store and scan myself. It feels like the industry is still now much more flexible in saying, okay, I'm going to separate my consumer base out and take care of each journey and find out what technology can serve them better rather than one self checkout is a one size fits all. Joe Skorupa: You know I have a, a story that I can quickly go over. I've been covering technology [00:14:30] a long time. And one of the areas that I was covering for awhile, a while ago, you mentioned quick service restaurants, and there was a time when, it's hard to believe, but zero quick service restaurants ... I'm talking about the McDo…

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