Creating a one-stop shop has never been more important

AT M s & P R E PA I D S E RV I C E S
Creating a one-stop shop
has never been more important
Pick n Pay’s Smart Zone has been designed to differentiate it from the rest of the store in terms of colour and format.
This makes the centre – and its available services – easily visible to customers waiting in the checkout queue.
The past, present and future of ATMs, services and payments in-store
According to the Financial Sector Charter
retailer will generate,” comments Alan
By Laura Durham
of 2003, ATM services should be available
Anderson, development director at Bytes
Offering your customers airtime,
prepaid electricity and the use
of an in-store ATM has become
a prerequisite for the modern
supermarket. But these services
are no longer enough and retailers
have had to investigate money
transfers, cash-back at till and
now, the various mobile platforms
out there. Keeping up with these
trends is vital in today’s retail
landscape where everyone is
fighting for the same basket.
A dynamic ATM environment
Managed Solutions.
There are a number of benefits to a
retailer choosing to self-load an ATM,
according to van der Merwe. “Firstly, it
safely reduces the bulk cash in-store and
secondly, it reduces retailers’ cash handling
– and resulting fees – to deposit.”
Safety is obviously another issue when
it comes to in-store ATMs. “Whenever you
are handling cash, there are always safety
concerns,” says van der Merwe. He says
that whenever one of their ATMs is CITfilled, they will try and place it in a cubicle
so the loading process can be concealed
(site and space dependent).
A move to money transfers
Money transfers have become very popular
in the retail environment, allowing a
customer to send cash to a recipient at
another store of the same group using a
cell phone and pin number. Shoprite’s
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Assuming that every supermarket now has
an ATM nearby or in-store is, in fact, very
naïve. According to Marc Sternberg, MD of
Spark ATM Systems, there is still a growing
demand for ATMs across South Africa.
to 80% of LSM 1-5 South Africans within
20 kilometres from their place of residence.
This has not yet been achieved – although
significant progress has been made –
leaving a lot of room for both bank and
independent ATM providers to service this
need.
An in-store ATM creates a win-win
situation for retailers. “An ATM results
in increased footfall to the store and it
provides an additional revenue stream,”
explains Fourie van der Merwe, operations
director at Bytes Managed Solutions.
When deciding whether to install an
ATM, retailers must ensure that they
choose a reliable supplier with a proven
track record to ensure optimal returns.
Regular servicing and maintenance is
extremely important because there is
nothing more frustrating for consumers
than an out-of-service ATM. “The more
uptime an ATM has, the more revenue the
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SUPERMARKET & RETAILER, JUNE 2012
Money Market has been doing this for
years and now customers can also transfer
and receive money at Pick n Pay, Boxer
Superstores, many Spars and some Food
Lover’s Market stores.
For only R8.50, customers can transfer
money from any Boxer Superstores branch
to another, or to a Pick n Pay store. In the
same way, money sent from any Pick n Pay
store can be withdrawn at a Boxer store.
Customers simply have to bring in their
South African ID Book and register in-store
to start transferring or receiving money.
When asked whether this has affected
the ATM business, Spark ATM Systems’
Marc Sternberg says no as money transfers
typically service unbanked customers –
whereas ATMs service banked customers.
“If anything, money transfers are pulling
people into the formal banking sector by
showing them the convenience of basic
banking products which leads them to then
open bank accounts.”
“So we see it as something as a feeder
rather than a competitor,” he adds.
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SUPERMARKET & RETAILER, JUNE 2012
Cash-back versus
ATM withdrawal
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ATMs & PREPAID SERVICES
Cash-back at till points has grown in recent
years but according to Sternberg, this
services a very different type of demand
for cash as customers are asking for cash
in addition to a purchase. “Cash-backs
and ATM withdrawals are not necessarily
conflicting. We haven’t seen it (cash-backs)
affecting ATM volumes in any which way,”
comments Sternberg. There are, of course,
pros and cons between ATM withdrawal
and cash-back at till point:
Woolworths has added a personal touch to its
Nicolway store by introducing personalised
gift cards, a recipe kiosk and a call and collect
service.
Conversely though, this service might
also keep customers out of the banking
area completely as they might not want
anything more than the money transfer
service already available at their local
supermarket.
■ Assisted versus self-service. Some
customers might prefer the transaction
to be done for them at the till, others
might prefer doing it themselves at
the ATM, which affords more privacy,
especially regarding account balances.
■ Cash-back often requires a minimum
purchase amount – an ATM withdrawal
works independently from the store
other than its location.
■ Cash-back occurs at the end of the
shopping experience whereas an ATM
withdrawal usually happens before.
Customers are demanding more and more from their supermarkets. Retailers need to keep up
with these demands and stay abreast with technology trends or risk losing their customers.
customer loyalty in South Africa, having
introduced its Clicks ClubCard programme
16 years ago. “This was just a natural
extension,” he adds.
The central tenet of the Clicks ClubCard
programme is to convert customer loyalty
into cash-back rewards to be spent instore. This same idea applies to the new
insurance product offering, which reinforces
customer loyalty. Brits explains: “An added
benefit is that premiums paid on all of our
insurance products can earn customers 5%
cash-back annually for a claim free year, or
a reduction on future premiums – giving
consumers even more reasons to shop with
us.” Introducing financial services is part
of Clicks’ overall strategy to differentiate
itself in an increasingly competitive market.
“There is now a proliferation of loyalty
cards. We’ve always been at the forefront of
that and we need to continue to innovate
to one step ahead,” says Brits.
Get credit at Woolworths
Self-checkout might become a reality in South Africa in the not too distant future. As customers
complete the transaction themselves, tellers are freed up for more value added services.
“And everyone knows there is a huge
difference to spending when you’ve got a
wallet full of cash!” comments Sternberg.
Clicks introduces prepaid and
financial services
Loyalty key
to keeping customers
Besides keeping prices in line with its
competitors, Pick n Pay has been on a huge
drive to attract – and hopefully keep –
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This June, Clicks – in partnership with
Health Connects – introduced Impilo, a
prepaid healthcare system. Vouchers can
be bought and redeemed using mobile
technology in much the same way as
customers would buy prepaid electricity
and airtime on a cell phone.
Impilo, which means ‘health’ in isiXhosa,
is aimed at those consumers who don’t
have medical funding. The prepaid vouchers
offer a range of clinic services, such as
comprehensive consultations for children,
including medicines for pain/fever or
allergies, and comprehensive wellness
checks for adults.
Moving into the mobile space is also
a way for Clicks to broaden its customer
base as its loyalty programme, Clicks
ClubCard has been mail-based up to now.
“We are always trying to bring in new and
innovative services and ideas to make it a
useful and relevant card to our ClubCard
holders,” comments Du Toit Brits, business
development executive of Clicks.
Earlier this year, Clicks positioned itself
as so much more than a health & beauty
chain after launching its own financial
services.
“We decided to introduce financial
services to increase our customers’ loyalty
through our ClubCard database,” says Brits.
The company has been at the forefront of
Besides the ever popular Woolworths store
card (which accounts for about a third
of all Woolworths retail sales according
to the corporate website), Woolworths
has now also introduced its own credit
card. Woolworths Visa card also allows
customers to earn W points, which can
be converted into vouchers and spent instore. Customers are also now able to get
a personal loan (revolving loan or a fixed
term loan), as well as Woolworths branded
car and home insurance.
Woolworths has now gone even
further to connect with its customers in
the new Woolworths Nicolway store in
Johannesburg. “There are a number of
exciting new services in our Nicolway
offer,” says the company spokesperson.
“These include a call and collect service
– customers can phone the store and
place their orders for collection later, and
personalised gift cards. This service appeals
to customers who wish to personalise their
gift cards with either personal messages
or photographs.” Woolworths also gives
customers the platform to buy airtime and
pay their utility bills in-store. However,
Lotto tickets and prepaid electricity are not
sold in Woolworths stores.
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SUPERMARKET & RETAILER, JUNE 2012
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ATMs & PREPAID SERVICES
“We have now analysed our base and
developed customer segments based on
their value and lifestyle. We are utilising
this to help us make decisions on the
right promotions, ranges and layouts for
our customers as well as ensuring we are
advertising in the correct media,” says
Rohland.
However, whether this expensive
investment will eventually pay off, and
whether the data collected will ever be
mined effectively remain critical questions
for many industry critics.
Technicalities of transactions
Payzone at Spar offers customers a bouquet of
money services, including buying bus tickets,
transferring money to another Spar branch
and settling utility bills while shopping for
their groceries.
shoppers shopping at Pick n Pay through its
loyalty programme, Smart Shopper.
“In the first year of the programme,
we signed up five million smart shoppers,
which gives us a massive platform through
which to communicate with our shoppers,”
comments Bronwen Rohland, marketing
director at Pick n Pay. Essentially, customers
are awarded Smart Shopper points for
every Rand spent in a Pick n Pay store.
These points can then be transferred at
the Smart Shopper kiosk (in the front of
all stores) to the Smart Shopper card and
used to pay for the customer’s next shop
or be donated to charity. Says Rohland: “It
was launched after extensive research into
international best practice on loyalty cards.
It was a capital extensive launch, which is
in the process of paying dividends.” Already,
she says that stores have seen increased
store visits and increased basket size.
gift card
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SUPERMARKET & RETAILER, JUNE 2012
Besides staff members having to be trained
to actually ask customers if they have a
loyalty card (and if not, give them more
information to sign up), they need to
process the actual transaction. Nowadays,
most customers transact solely using cards
so there is nothing more frustrating when
a card machine is out of order. And it is the
teller who has to deal with the wrath of the
customer.
“Point-of-sale (POS) affects how fast
customers can be processed at the till and
this transaction turnaround time directly
affects the retailer’s business,” comments
Graham Williams, MD at Stanchion
Payment Solutions. Added to this is the
tussle between taking the time to go
through all the checks to prevent card fraud
versus processing customers as quickly as
possible.
The POS space is going to get very
interesting in the next year or so, according
to Williams. He says that mobile payments
have been coming to the fore for the last
five years but legislation and political
tug-of-wars are preventing these to be
implemented as yet. “From a tech point
The Smart Shopper kiosks at the front of every Pick n Pay store allow customers to view tailored
promotions, convert points to use against the next purchase or donate them to charity.
card payments
airtime top-up
There is nothing more frustrating for a
customer than when they are prevented from
buying by card. Tellers need to be trained on
how to deal with this situation in order for the
store not to lose a customer.
Customers not only expect to be able to buy
airtime in your store. They want to pay their
bills, get a Lotto ticket, transfer money to their
relatives and get cash-back at the till.
This then frees up staff members for
other value-added services. “It’s ready and
enabled for South Africa,” says Anderson.
Of course, security is an issue but the
self-checkout technology has various
safety features built in. For example, the
full basket of groceries will be weighed
at the start – and then cross-checked
after scanning. This verifies the weight
of the scanned products and if there is a
discrepancy, a yellow warning light will
come on and the supervisor can then check
the error. “That is just one of the many
checks and balances we have put in place,”
explains Bytes Managed Solutions’ Alan
Anderson.
of view, mobile payment solutions are
available today,” he says. Already, mobile
banking and mobile money are starting to
take off thanks to partnerships between
banks and cell phone companies.
More excitement and
innovation to come
One of the retail solutions that Bytes
Managed Solutions has waiting in the
wings is a self-checkout system for
convenience stores and supermarkets.
This has been very successful in overseas
markets like Middle East Africa (MEA), USA,
Australasia and Asia and involves customers
scanning their own basket of groceries and
paying, without the need for a teller to
facilitate any part of the transaction.
Various retail groups have partnered with banks to offer customers even more of a service.
Pictured here, the Nedbank branch in Boxer Superstores Noord Street is opening 400 new
accounts each month.
An ATM results in increased footfall to the store and provides
an additional revenue stream for the retailer.
“It is actually probably more secure than
the traditional checkout system where
sweethearting is rife,” he adds.
Near field communication (NFC) is also
definitely on the cards. In fact, Standard
Bank has recently launched Muvo, an
NFC transit card in South Africa where no
ticket or cash is required. Absa has also just
announced a tap and go card to be used by
rugby fans at the Absa Boktown fan parks.
For now, experimenting with this ‘new’
technology seems to be limited to the
banks, but once fully in place, these same
technologies will no doubt be extended to
retailer-bank partnerships. “Retailers could
certainly use mobile payments and NFC
to gain competitive advantage,” concludes
Stanchion Payment Solutions’ Graham
Williams.
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SUPERMARKET & RETAILER, JUNE 2012