3 Big Trends in Retail and Payments

Industry Focus: Financials regular and Fool.com contributor Matt Frankel, CFP, recently attended the Shoptalk conference in Las Vegas and noticed three clear themes. Logistics is certainly in the forefront, as efficiency is key in the new retail landscape. Improving the customer experience is another big one, especially by using technology. And last but certainly not least, payment processing technologies continue to evolve.

In the segment below, Frankel discusses these trends with Industry Focus: Financials host Jason Moser.

A full transcript follows the video.

This video was recorded on March 11, 2019.

Jason Moser: Shoptalk, I'm a little bit less familiar with it, but it sounded pretty cool. What were your big three takeaways from your week at Shoptalk?

Matt Frankel: Shoptalk is a retail conference. That's probably why, on the surface, it's not in our wheelhouse. One of the big themes is payment processing, which is why I started attending it a few years ago.

Moser: That's right in our wheelhouse!

Frankel: Right. The themes have shifted this year a little bit, which I was surprised to see when I got there. I went with Dan Kline who's one of our Consumer Goods guys. He was thrilled to see the shift.

The main focus of the show seemed to be more logistics than payment processing. There was some really cool stuff on display there. We saw one company called Takeoff Technologies that makes robotic picking centers to fill online grocery orders. In other words, there's not a person who gets the orders, there's a carved-out space of the grocery store that's set up for this and there's a little robot that goes to all the shelves, fills the order, and puts it in bags. No one even has to do anything. We were asking them how far this was from being rolled out. It's actually live in two grocery stores in Florida. Albertsons is their biggest client. I'm going to tweet out a picture of the little picking robot, which is what brought us over there in the first place.

Logistics is definitely a big theme. How can we run our business more efficiently? Less square footage, which has been a huge theme of retail over the past few years. A lot of companies have really done a great job of reducing their square footage. Best Buy is one that immediately comes to mind that's done a good job of maximizing the efficiency of their space. It seems like grocery stores and pretty much every other aspect of retail is trying to do that. That was theme one.

Theme two is improving the customer experience. Dan and I were walking down, they have a start-up aisle of all the start-ups that are trying to pitch their ideas to investors and new potential customers. We saw one app that uses your phone sensors to measure you when you're buying clothes online. I don't know about you, but if you're like me and you order something online, it's optimistically a 50/50 chance that it's going to fit. [laughs]

Moser: I feel like I've nailed it down to a few places where I can get clothes now where I know how the sizing works. Admittedly, I'm not stepping out of the box and growing my wardrobe. But, at this point, I'm basically an old man, so who cares, right?

Frankel: I get it. [laughs] My wife thought this was a really cool idea because she sends back 80% of the clothes she buys online because they don't fit right.

Moser: Yeah, I think it's a great idea!

Frankel: You pretty much put your phone on 10 different parts of your body. It's like going to a tailor. Things like that, improving the customer experience, were a big theme.

And, last in our wheelhouse, payment processing is still a big deal. It's more ways to do it better. I went to Square's booth.

Moser: Shocker! [laughs]

Frankel: [laughs] Well, last episode, that's the last thing I told you I was going to do.

Moser: That's right.

Frankel: So, I walked over to Square's booth. They're really trying to push their hardware. If you remember from their earnings, their hardware revenue more than doubled year over year. A big part of that is their new point-of-sale offering, their first free-standing point-of-sale system designed to bring larger businesses into their ecosystem.

Moser: That hardware is a gateway drug, man. That's what gets people started.

Frankel: And what they're building, after getting a demonstration, is better than what I'm used to using when I go to most stores.

Moser: That's good to hear!

Frankel: Their newest thing that I got a nice demonstration of is, they have the register, the faces of the employee. And then you have a smaller customizable display, which the representative was telling me it was a big pain point for a lot of businesses, not being able to control what the customer sees. Normally, you just see a standard "Want to add a gratuity?" "Here's where you sign." Things like that. They could set it up so, say, a 30-second promotional video plays while the credit card's running, or something like that.

Moser: Yeah, reinforce that branding.

Frankel: Right. A lot of new payment processing solutions. Square's I found the most interesting. But maybe I'm a little biased there. Maybe we both are. We probably would have both gravitated over to the Square booth and spent half the conference there.

So, yeah, logistics, improving customer experiences, and payment processing were the big themes. I always have a great time at this conference. It's really a show. Like, the grocery robot on display actually picking some groceries. A lot of cool stuff to see there. I'll tweet out some pictures from it.

Moser: It sounds like a lot of fun. Am I assuming correctly, you'll have some articles out there on fool.com soon? Have you already got stuff up there?

Frankel: I will, and I do. I know Dan has a few on the retail side up and coming out. I have one on Square, on them trying to recruit bigger sellers already up. I have a few more in the works, too.

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