Retailers Need Modular and Flexible Self-Service Options
Release Date: 04/24/2021
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In this episode of COMMERCE NOW we discuss how retailers need, now more than ever before, more modular and flexible software, services and systems when selecting their self-service partners.
Jerry Langfitt (00:16):
Hi everyone. Thank you for joining us today. I would like to welcome today's guest Matt Redwood, who leads our advanced self-service global solutions at people Diebold Nixdorf. Welcome Matt, and thanks for joining me today.
Matt Redwood (00:27):
Hey Jerry. Thanks for having me always good to speak to you.
Jerry Langfitt (00:30):
Now let's start off at a 50,000 foot view of what's going on in retail. There's certainly experienced a hyper compressed and instantaneous change in consumer behavior, of course, caused by the pandemic. This ended up being a massive shock to their operation and it infrastructure. The quick fixes have now turned into long terms needs and rubber banded and duct tape journeys. Now have to last longer, be more scalable and continue to evolve. As consumer sentiment continues to change, regardless of what's going on in everyone's health systems in their countries, retailers need to react with the same speed as the customer. This is more than just putting up plexiglass barriers. They have to really rethink many of their current consumer journeys while adding new ones immediately. What do you think retailers are experienced and learned about what their legacy systems and current infrastructure both can and unfortunately cannot do.
Matt Redwood (01:23):
Absolutely. So it's a great question, Jerry. So generally trends in retail happen over a period of time. It's an evolutionary step. If you take the shift to convenience store shopping as an example, that's a trend that's happened over multiple years. I think what retailers have really experienced in the last 12 to 18 months is a revolutionary step. That's been forced by the global pandemic. And what that's done is it's exposed the weakness in their infrastructure, the weakness in their current store, operating best practices and ultimately the technology that enables that. And it's really forced retailers to think very, very differently, not only about the strategy of the day, but also how they can build in flexibility for tomorrow. God willing that another pandemic doesn't happen, but this could be the start of a very volatile stage where they're retail, where retailers really have to change on the fly constantly to changing demands either from a legal standpoint or from a customer driven demand aspect. So they need that flexibility. They need that scalability, and ultimately they need the ability to change extremely quickly and to react to any demands that are effectively flipped in upon them.
Jerry Langfitt (02:42):
Now, one thing I don't understand is how did we get here? What got us to this point of difficult to change and the mobility of some it processes?
Matt Redwood (02:53):
Oh, so I think that's just honestly legacy it. So I'll ask VP of retail cause at a washing business where you buy the hardware, you buy the software, you buy the services for that particular application in isolation, from everything else and the legacy. It was a very good example of that type of infrastructure, where you had maybe a supplier who specialize in self service and now they want to kiosk another one at point of sale. And you always had these isolated solutions that existed on their own and there was no interconnectivity. So it was very difficult for retailers to really piece together. I had different customer journeys or react to new customer journeys because they either had to make changes across each touch point, which was costly, expensive and took time. Well, there just wasn't the flexibility in the infrastructure to be able to do it and really modularity and a need for openness has been driven out of this pandemic, modularity the ability to be arranged or fit it together in a variety of ways is the dictionary definition. Openness is openness. And it's the combination of these two factors. The retailers are really looking forward to make sure that they don't fall into that.
Jerry Langfitt (04:06):
What got us to this point of difficulty to change and the immobility built into it processes. Okay.
Matt Redwood (04:12):
I think honestly it was just his legacy technology. The technology environment with particularly within big retailers is a very complex one. If you think about, you've got a hard way, you've got software, you've got ecosystem, you've got services, even taking the hardware in isolation, you have different components with different life cycles. You have different stuff like compatibility. And on top of that, I think we've had a legacy situation where suppliers in the industry have created solutions in isolation and RSVP Highland limit it. The dishwasher situation. You have one provider of a piece of hardware with a piece of software and services to run it. I'm not saying closed loop system. And what it means is that retailers are almost forced to take different touchpoints with different solutions and implement them into their environment. And these solutions would also almost operate in complete isolation to everything else in the store.
Matt Redwood (05:11):
So not only does that build in complexity and in flexibility, because if you make a change on one, you have to replicate changes across multiple touch points. It's very complex to manage very costly to manage. And ultimately you're not getting that level of flexibility. I mean, two very positive things to come out of this pandemic is the retailers have really understood that actually what they need is modularity and they need openness on the Southwest side to be able to take more control of their own destiny in terms of what functionality they have, what roadmap they want to drive and ultimately what experience they want to implement in their stores and what modular hardware do they need to be able to support that. And I think we tended to really focus now instead of having these in isolation is to have an ecosystem of technologies or touch points within their stools or talking to each other. That means that they can move in a great degree of flexibility they can have at the LT and responding to trending trends or requirements that may be happening in the market. I don't want to bet they're not boxed into a corner as they've been.
Jerry Langfitt (06:19):
Yeah, it's funny. You should say that Matt, because despite the pandemic we saw progressive retailers evolving even before 2020 S Watson Tesco and others were already looking at new journeys and building greater flexibility into their operations and it processes, what do these progressive retailers see and how did they react? What did they do different?
Matt Redwood (06:39):
I mean, ultimately that shift that those retailers took, which was, I guess, proactive ahead has become dynamic. I know that they will see the pandemic catheter, but they, they witnessed the fact that retail technology is a very complex environment and it's only going to get more complex. And if you look at the landscape of self-service over the last 10 to 15 years, we've gone from really an environment where you might have point of sale and one type of self-service device within your stool. But now they have a whole plethora of options available to them from point of sale, to multiple different stuff, service touchpoints to us, mobility as well as the influence, the online is now happening. And they recognize these early movers recognize the need for flexibility in order to be able to react and obviously take advantage of as many of these touch points within their schools.
Matt Redwood (07:30):
And the shift that these retailers made really enabled them to pivot very, very quickly to be able to cherry pick the right solutions for that store today, knowing that as trends change, I may need to update and flex that model to react to future trends and that fully baked in that flexibility. So retailers that really took advantage of a modular touchpoint approach from an open software approach, but a pandemic finally not easier. It would be able to pivot and operations and react quickly to the changing trends or legal aspects that were inflicted on them during the pandemic.
Jerry Langfitt (08:10):
So it sounds like a lot of the retailers want to blaze their own path and be the master of their own roadmaps. How can a retailer like that? What kind of demands should they be giving their technology partners,
Matt Redwood (08:22):
Ultimately it's flexibility. And this trend of, of openness and modularity it's been spoken about for many years, but I don't think many technology providers have really enabled retailers have that controlling flexibility until now. You know, I'm very proud of Diebold Nixdorf as one of the first in the industry to really open up that platform and to really allow return is much more control, much more flexibility. And I want you to ultimately future proof themselves against any upcoming trends. It gives them more control to give them more and ultimately destiny of what experience they want to deliver in their stores. And it really is the convergence of everything that we've been booking over the last couple of years and tell them multichannel and different customer journeys. Technology has always been the disabler. And now we're really saying that all of those rules have been stripped back and we've got a very flexible, very open, very modular environment, which really gives retailers what they've been asking for for years, which is flexibility.
Jerry Langfitt (09:23):
Well, and I think that's one of the key points I've seen with retailers. Their decision-making processes getting much more complex because they are saddled with legacy it infrastructure, and they are concerned that any decision they make will just create the next inflexibility. So I think each retailer needs to buy into someone that has that kind of modularity. So it's like, look, I'm buying into a philosophy that says this partner will be with me later and they'll keep evolving too. It leads to, you know, let's flip the script a little bit and ask, what is the retail technology partners and providers done both wrong and right in our industry,
Matt Redwood (10:05):
I didn't necessarily think that there's a Roman a right, that cause it's all relevant to time and situation at that particular moment. But as I said previously, it has been this trend where technology providers have been, I guess, very wooden in terms of locking down the systems so that they're very closed. You have to buy the hardware, the software, the services, the innovation from one particular supply what's starting to change. And it's very much the ethos of the board next door is you provide a platform, a platform for that retailer to invest in, and then they can build their own technology touchpoints. Within that stool. We definitely combinations of hardware, software services, and innovation, and ultimately build the right in-store experience that they want within that store. And I think that's key. Sometimes we get too focused on the technology and less so on what we're trying to actually achieve here.
Matt Redwood (11:00):
What we're trying to achieve is the best in-store experience for the end consumer. And we use the technology to drive that it shouldn't be the inverse of that, which way are hamstrung by the technology. And therefore that dictate what type of consumer experience we should walk on. What, because you are experienced to retailers want to achieve in that stores, what is the right technology for them now, but also where do they see that consumer experience moving to in three to five years time and ensuring that they have the flexibility within that platform in order to Fletch change, evolve our offering over a period of time to get to ultimately where they want to go?
Jerry Langfitt (11:38):
No, I was actually going to say, you had said the best possible experience, and I wanted to add a time element to that the best possible customer experience for today for today's consumer. And one thing that's evolving, consumer trends and habits, but the other thing is, is the separation of consumers into their own journey of what each person needs in their particular mission that they're doing in their retail environment. So I might, I might have a quick trip or I just need to grab something fast, two items that I forgot, or I might be taking a longer trip. This is no longer one consumer that shops one way the same consumer can shop many different ways. And you're constantly going to have a changing need within today.
Matt Redwood (12:19):
Yeah, absolutely. I mean, ultimately if you look at your eye, it may be the same consumer that's shopping in multiple different ways, but ultimately there may be five, six, seven, 10 different customer journeys that a retailer has to deal with within their store. And rather than forcing those consumers to shop in a particular way, it's really about giving a consumers, the flexibility and the choice to shop in the way that they want to within that store, giving them the empowerment to shop that particular brand, that particular school at that particular time of the day and what experience they want, as you say, it may be the same consumer that shops on a weekend that may spend an hour in the store browsing with their family because they're picking up that weekly drop where they've gone shopping for the day and maybe the same consumers are like Tuesday, lunchtime, the coffee into the store and pick up a coffee or a sandwich to go same consumer, but very different consumer journeys and therefore very different expectations of what a good consumer experience look like.
Matt Redwood (13:20):
What we've seen during the pandemic is, is the road versus a lot of that flexibility and diverse arrange of consumer experience. So what we've really seen with the restriction of movement as a result of the pandemic is the consumers that may be interacting with a brand multiple times during a week of being forced to only shop maybe once a week or once every two weeks because of the social distancing rules on that, you know, the rules around staying at home. That's the flexibility that retailers have really had to combat over the last 12 to 18 months, moving from an environment where they're trying to be as flexible as possible to enable the best consumer journeys and multiple consumer journeys, always back to the shopping journeys of 10 years ago, where consumers would only go to a supermarket. Once every two weeks we'd buy a large amount of items. And that would be the only interaction with those consumers. Not saying that that is going to be the trend that extends into the future, but that shift almost overnight has been very difficult for a lot of retailers to contend with. And that's where ultimately they need to build that flexibility into that, into their infrastructure.
Jerry Langfitt (14:26):
One thing though that happened, happens to an it company or their department is that it departments hate complexity. That just once I have 10 different journeys, I have now have to contend with tracking and keeping 10 different technologies up. I mean, what can an it director do to try and simplify or minimize? Cause the journeys are going to stay. The consumers want this ops needs it. Everyone knows they have to do it. So what can an it department do to try and minimize the complexity they have to manage?
Matt Redwood (15:01):
So the complexity doesn't necessarily come from the number of different consumer journeys. It comes from the number of pieces of technology that enable those consumer journeys that may operate in isolation. If you've got to replicate changes across multiple platforms, multiple solutions, not only does it take time and money and resource to implement even the simplest of changes because you're having to replicate it. It's a very complex environment, very, very easy to get them wrong. And that's where we're really shifting, seeing the shift to requirements of retailers to have a platform based approach, open API APIs and an architecture so that they don't have to replicate those changes over multiple. It just happens. They make the change once and it's been applicable for all touch points within that store. So it's almost, it's not a restriction with the amount of customer journeys, but it's a centralization of the technology to enable those customer journeys in a more sustainable and easier to manage way.
Jerry Langfitt (15:59):
Yeah, it sounds like if they tried to do it the old way, which was each technology being separate, it would be complex, but if they try and implement in a much more progressive and newer way using modularity that way more tech is similar, but still supporting multiple journeys. That way that should reduce the complexity that they're they have to do.
Matt Redwood (16:23):
The other element is that retail technology is not going to get any simpler. If anything is going to get much more complex and much more diverse. And I don't say that as a negative, but if you look at the competition between retailers now take the grocery industry as an example, hugely competitive, hugely competitive space, where everyone is failing to get the consumer's attention and ultimately business. On the flip side, you're seeing brand loyalty at an all time low because the competition is so tight consumers know that if they have a bad experience with one particular brand or one particular store, they go next door, they go down the street and they can get as competitive as an offering, but maybe a better experience. Well maybe a, you know, more fulfilling journey within the store. So retail is a really, really good, a tough situation. They're battling each other for competitiveness, but they've also got to deal with the reduction of brand loyalty.
Matt Redwood (17:20):
So they have to focus on what can they do to enhance their in store experience and how can they differentiate that brand. And multi-levels it ultimately is going to result in is a lot of retailers taking bets and moving in different directions to try and differentiate themselves. And back to the openness question as why openness is so key retailers are going to want to take innovations or technology on the market and integrate it into their own ecosystem to create that own ecosystem of technology is going to enable the customer journeys and experience, but they want investors that will hopefully be different from their competitors and therefore able to differentiate themselves
Jerry Langfitt (17:59):
Well, they, and they need to make sure those are sustainable. They make a change and they get it right once and they can't just get it right once they have to keep it going always on and make sure that the customer always gets that great experience every time. So it's, it's going to be a challenge, but I think like you had said, building their needs onto a platform mentality is going to be the way forward.
Matt Redwood (18:26):
I mean, a great, a great example of that is really cash. So I felt like we've been talking about the demise of cash for years and years and years now, but ultimately what we're seeing is the long tail of cash. And even during the pandemic, when there was nervousness around, you know, safety and hygiene, and suddenly we saw a big, big drop off in the amount of consumers that you're willing to pay by cash, it didn't disappear. And actually we're now seeing cash utilization start to increase. Again, it may never go back to the level of it was, and we may be how accelerated the delays of cash, but it's still left. So what are retailers supposed to do to make sure that they can serve consumers today that want to pay by cash? Knowing that cash may disappear in three, five, 10 years, whatever the time period is.
Matt Redwood (19:18):
So they have to really look up the experience, the operations and the requirements that they require in the store today, as well as building the flexibility that that can shift and change tomorrow. And so a modular hardware platform is really important. How do we deliver the right experience today with the right combination of technology modules, but have the flexibility built within that, that can flex and change to support the customer journeys of tomorrow without throwing that investment away. And that's really, really crucial bit. How can we prolong the return on investment made in a piece of technology without completely throwing away every time a consumer trends
Jerry Langfitt (19:57):
That is absolutely correct. And it's going to be a difficult for the retailers, but they need to learn this new philosophy of being way more flexible. But thanks, Matt. I think that's a good place to close. Really appreciate your sharing, your thoughts and how critical modularity and building greater flexibility into retailers it and operational strategies and how it benefits retailers themselves and consumers. And thanks to you. Our listeners for tuning into this episode of COMMERCE NOW to download a free copy of the white paper on modularity mentioned during our discussion, please visit the dieboldnixdorf.com/self-service solution.