FreedomPay Q&A - Next Level Commerce & Connected Dining with Laurent May & Daniel Litwin
In the lead up to FreedomPay’s roundtable event on ‘How Technology is Enabling American Recovery’, Head of Ready Laurent May joined Daniel Litwin to discuss how COVID has made contactless dining the norm.
Listen to the podcast or see the chat captured in full below.
Daniel Litwin: Can you clarify what Ready does, Ready’s business, how Ready intersects with retail, and recent developments at Ready?
Laurent May: Ready has a focus on contactless order and payment, or what we like to call ‘Connected Dining’ in the restaurant space. We also offer a full experience from digital menus, ordering, loyalty, reviews and payment without using in-store hardware or services. You do this all on your own phone. Customers are able to scan a QR code or tap an NFC tag right in context at the table to bring up this digital experience. That allows you to order food to your table in a contactless way, provide feedback to the restaurant in a digital and contactless way, or what was one of our core use cases - paying your bill at the end of a restaurant experience.
So we’re really focused on what people are calling contactless payment in the contactless category but we really think it’s about connecting diners to restaurants that they love to visit and be patrons of in a personal way, on their own device. We started with payments and now we're expanding that ecosystem to include other things that make sense to create for customers. Payments are obviously a very key part of the retail or restaurant experience but there's also some really interesting opportunities to add value to customers and merchants by extending that surface area to loyalty. We’re growing and adding products features and we see ourselves as leaders in that space right now.
Daniel: Let’s get into the meat of the conversation. Again, we’re chatting retail’s broader economic recovery during COVID. So, just to pull your personal perspective and insights on this, how would you characterize retail’s economic recovery mid COVID and mid-recession?
Laurent: Well, it’s obviously been very difficult out there. Our focus is on restaurants who were hit very early with shutdowns on in-restaurant dining so COVID obviously brought a lot of pain into that industry. At the same time, there's been a lot of opportunity for innovation and the opportunity for these merchants in retail and restaurants, I think is to actually look at their digital transformation strategy and take this time with the pandemic and turn it into a positive, into an opportunity. We’ve been talking to restaurants that have had digital transformation plans with a 5 year road map turn into 3 - 6 months.
The ones that have been able to have that digital strategy, whether that be online ordering or contactless pick up for retail or restaurants, they’re the ones that thrived. They’re the ones that were able to be innovative and be able to stay open and hang on during those shutdowns and be able to serve their customers in a new way.
On the back of that, this is going to be a longer road to recovery but I think when we get on the other side of it, these industries will be changed forever. The new baseline is customers are going to be expecting to be able to control their experiences, to be able to interface with these brands, retail, restaurants, and any other outfit the way they want to digitally, online, and contactlessly.
Technology has been a tool these restaurants and retailers have been able to use to be able to get their product and services out to customers in a way they haven't done in the past, especially in the restaurant space. There are a lot of companies that were caught flat-footed and quickly had to adjust and open new channels like third party deliveries. And those that did that are going to be really successful on the back of this and have a good launching pad into the recovery.
Daniel: Positives and negatives on the response. Where has the industry fallen short in its recovery in context of a pandemic that was completely unexpected? What could retailers have done better to adapt to COVID?
Laurent: It’s just not having that strategy in place or having very little of that strategy implemented and being forced to implement it quickly. What happens there is you’re forced to make really quick and not thought out decisions, you’re in survival mode right? So thinking I need to get a delivery service going I need to get an online website. You’re not necessarily going through the process that yields the best results for you, you might have some existing vendors that do some of these products on the side and because they’re existing vendors it’s easy to turn them on, but then you’re left with a lunch bag letdown when you start using the service and it’s not meeting your needs.
So due to unpreparedness and the fact that it came on so quickly we saw some good intended decisions and vendors being installed but not all of them turned out really well. I think there’s a bit of technology buyers remorse and a bit of a re-evaluation cycle that’s happening. I don’t think you could have really done things better in this pandemic because it was so acute and so fast that everyone was doing the best that they could.
I think it’s important if you made it through to step back and think about if this vendor is the right vendor long term if this service style is baseline? Is this how I want to operate moving forward? I think that’s definitely a trend moving forward is that evaluation period as everyone is catching their breath at the end of this. We’ve seen that as a trend for sure. I think it’s an opportunity for digital transformation in this wholesale business model shift that may have fallen short for some people out there.
Daniel: Moving to the positive. What has powered the areas where retailers have come out on top and adapted well to the pandemic and recession?
Laurent: Yeah I think there's a lot of really interesting and positive stories that have come out of this around that digital transformation side. We've seen QSR restaurants have very little drive through traffic turn into drive-through machines and increase their sales 200 - 300% through that channel. Or people getting creative with the contactless and curbside pickup or seeing people come up with virtual drive-throughs where they might not have that physical space but they're being creative and able to create a safe commerce experience for their customers. I think another thing that’s happened, especially in the restaurant space, there was a lot of dependence on the 3rd party delivery. That made sense when the dining rooms were open and fixed costs were supporting dining rooms and you could add an additional channel without too much harm but when you’re relying on that as the key channel for serving your customers, that economic model turned upside down.
And the good that came out of that was all of these restaurants looking for first- party delivery and takeout services were able to take over that customer ownership. So now we have restaurants that have a real relationship with the diners they were serving through these third parties. Now they have this ability to really increase this surface area and the relationship that they’re having with these customers now they've shifted them from a third-party service to a first-party service.
On the positive side, there's been a ton of innovation, there’s has been a ton of acceleration of this digital transformation and I think at the end of it, you’re going to see these companies that have done that have a really strong relationship with their customers which will be a springboard when we get back to normal.
So, innovation, adaptability, agility, and that business model turnover, that was a positive thing for the industry as third-party was becoming really taxing on the business model and relationship model they had with customers.
Daniel: One of the staples we've seen for many retailers to get customers feeling more comfortable back in-store is just a general inclusion of contactless solutions and contactless experiences. Contactless was already cementing itself as part of retail's future before the pandemic so can you track the growth of contactless solutions for us and some of the ways they were already showing their potential to retailers before COVID?
Laurent: If you look at it in any environment, regardless of segment or vertical, there has been this long shift from non-contactless moving to contactless. I think that’s been spurred on by ApplePay, GooglePay - these types of products have pushed not only merchants but consumers to adopt those methodologies. You’re now also seeing card issuers providing contactless cards. So that was obviously a big trend. Like where I'm based out of Vancouver in Canada or in the UK, where contactless cards and contact the terminals are absolutely everywhere. Any purchase under $100 is basically done by an ApplePay, GooglePay or contactless wave transaction. In the US, we’re seeing that accelerate now, I think every single card issuer is going to be providing that technology.
And just in speaking with a lot of our customers that use Ready contactless pay at table, they’re also supplementing that with the ability to change out their card processing terminals, going through that entire upgrade cycle. There is absolutely a trend to contactless but it was following the rest of the world from a geographic perspective in the US. There's no doubt that contactless, from a payment perspective, absolutely accelerated over the last 6 months in restaurant, retail, and all industries.
There are other areas of contactless that need to be done in retail, it’s not just payment. It’s signing up for services, signing up for loyalty, it’s providing feedback. If you think about all the different parts, outside of the purchasing experience, all the different contact you may have with a retail store or restaurant, there’s actually a lot there. In our example, menus are a big piece of contact with servers and staff with the paper. That’s an area that we innovated on, we delivered a digital menu experience. We’re saving 600,000 paper menus from going into the garbage each month. But it has also provided a contactless and better experience. You’re taking this opportunity to make the experience better from a low fidelity paper menu into something that’s real-time, allows you to filter based on dietary needs, provides up to date pictures of calorie counts and stuff like that. So you take a contactless need and extend it and make it better and I think that’s the type of innovation that’s happening across retail and restaurants.
Daniel: So with all that as context, what are some expected and unexpected ways that COVID-19 re-cemented touchless technology into the retail landscape. Was touchless given a second boost of lifeblood because of COVID-19 and how do you imagine that trajectory now moving forward?
Laurent: Customer and merchant adoption have had to come together for the touchless experience to take hold. There's tons of stories of people rolling out technology that works but merchants don't necessarily push it or customers aren’t ready for it. What COVID did on both sides of the relationship is push the requirement of offering touchless experiences for merchants and customers. Now where Ready is deployed when it was kind of a new thing, and not necessarily seen by everyone before, there's an expectation to have contactless payments and as a guest I’m going to be in control of my guest experience through my own phone.
That’s a new baseline. If you think about things in the context of COVID of “what’s going to snap back to how it was before and what’s the new baseline?”. That’s how we think about things when we’re thinking about product features - we want to spend our time on the new baseline. We absolutely believe that once customers try this touchless checkout there’s absolutely no way why they’d go back to any other way. It saves time, it’s more safe, it’s better for the staff. When we look at our own stats, something like 98% of people that have used it want to use it again.
So that sort of confluence of merchants en masse offering these solutions and customers having that expectation, the orders of magnitude increase usage to the point where it’s just mainstream.
Pre-COVID, Ready had fantastic usage rates. We would have 20% of customers scanning a QR code and checking out on their own device before they left the restaurant. We have deployments that are 70, 80, 90% of people that are doing this new contactless checkout on their own phone. So it just tells you that the environment, merchant adoption, customer adoption are all coming together to create this new category and the new baseline is the expectation, and not a novelty around these types of services.
Daniel: What I find interesting about touchless is also how it can intersect with the digital and e-commerce side of retail and obviously over the last several years has expanded and become the future of convenient shopping for many consumers. When you integrate touchless there's opportunities to tie and other digital strategies and ways of better targeting customers with those digital interfaces. So can you elaborate a bit on some of the intersections you see between touchless technology and long-term digital strategies that have become a proactive part of retailer’s strategies over the years?
Laurent: It's a really good point, this is a big opportunity to not think about contactless payments as a technology product or a payment method. You’ve got to think about it as an opportunity to open up a relationship with a customer. You're offloading a transaction or a payment from a card on a terminal to someone’s own device in our case.
And what can you do with that? You can do anything. Moving that context from a card in terminal to the customer's own device allows you to do really interesting things. So on our side, we’re doing integration into loyalty and we’re also doing integration into survey experiences.
A typical restaurant might have gotten feedback on survey cards or the bottom of the receipt where you go to a link to fill out a survey. A really good number from these sort of old school survey companies would be 70 pieces of feedback in any given month per location. We're seeing an order of magnitude higher than that, at 70 per day. So there is an opportunity when you offload it if you change the context of where the transaction’s happening to innovate on that surface area and there's a lot of personalization that’s going to happen around loyalty and rewards. There’s a lot of feedback that’s going to happen at the beginning and the end of a transaction.
But, the big thing is that it’s going to enable the retailer to offload that process onto someone’s personal device, opening up that personal relationship experience that really couldn't happen before or was really clunky. Like even checking out at a clothing store and being asked for your email address and have to type it out; that’s not a great experience.
And the uptake for those things are really really low but when you push it to people’s own device there are so many great ways of collecting that information whether that be identity platforms like “sign in with Apple” or “continue with Google”, where it’s one click and you’re able to enroll someone into this rich ecosystem. So that's where we're focused on. The point of payment is incredibly important; it's probably the most important part of the customer journey, arguably, on both the merchant and the customer side. When you're making a decision to maybe tip and, in our case, provide feedback. But it also provides a really interesting area for innovation and I think that's going to become very standard across customer journeys.
Daniel: Do you find that customers, themselves, are ready for touchless at scale? Do you think the general shopping audience has adapted to a lot of the other digital intersections of retail that will give touchless the most bang for its buck? What are your thoughts there?
Laurent: We're seeing that confluence of the environment of merchant adoption and customer adoption coming together to provide what is unmistakably a trend of people ready to adopt this technology, who previously were a little bit late to do so. Even with our own stats, we’ve gone from 20% to 80% share of checkout in the last four months. Those stats cannot happen without customers being ready, willing and able, and wanting and seeking out these solutions.
Prior to COVID we kind of hit what seemed like some sort of limit on adoption, best demographic, busiest restaurant, busiest retail establishment at the 20-30% mark. But now we just blow through that and that’s a whole industry coming together, offering these solutions. There's a whole bunch of vendors out there offering these solutions and doing different things.
I think the key thing is though, is you can’t choose a solution that's just checking a box. There are bodies littered on the side of the highway just looking at a technology and applying it to a problem. You know, let’s add a QR code to this experience, let’s add a touchless experience to this checkout. That doesn't really work. You have to look at the guest problem, you have to look at the customer journey and you have to work backwards from there. I've made that mistake more than anyone, applying technology and seeing if it works. You have to start with the customer in mind. What problems are you solving? And it's really clear that this touchless technology in this environment is the right choice. And customers are certainly adopting it in droves, like I said, our share of checkout has ballooned. We’ve seen one and a half million people using our checkout since COVID started, so there's a huge amount of growth in this area and that comes back to customer adoption. And, pardon the pun, but I do think customers are ready for it. The proof is in the numbers.
Daniel: What about the retailers? Do you think that they sort of, in general, see the value in touchless beyond just the surface-level additions that give some sheen and “oooh ahhh” to the experience? Do you find that retailers have strategies ready to take advantage of touchless at scale?
Laurent: In the retail environment you obviously you need to integrate into a lot of different systems and subsystems so the point of sales are a really important part of that integration and that's a little bit slower-moving when there’s a legacy technology provider. If you look at companies like Square, companies like Lightspeed, they are investing in these areas right so I think for the merchants out there it's really important. If you look at FreedomPay of course, there’s a whole touchless platform that you’ve provided where ecosystem partners like ourselves have plugged into to be able to offer retailers, restaurateurs that touchless experience.
But the vendors out there, point of sale companies and the payment companies all need to come together to provide a solution that makes sense and we’re seeing a lot of touchless experiences being enabled in retail, but we’re not seeing a lot of that extra value being hung off of it yet. I think there will be a lot of that happening, with personalization, rewards offers, loyalty, that's where that intersection will happen at payment and it will go into all segments including retail. We’re looking to vendors like ourselves, FreedomPay, and others to come together to provide those solutions.
Daniel: Alright Laurent we are getting close to the end of our conversation but I want to wrap by looking at the FreedomPay event that you're participating in soon as I mentioned at the top of the podcast. So like we said coming up on October 29th live at 2 p.m. central, FreedomPay is hosting an industry Round Table where you and several other thought leaders will analyze and discuss strategies for economic recovery in retail as we move into 2021 as well as discussing how innovative technologies are going to enable this recovery, touchless obviously included, so what are you most excited about for the panel and why?
Laurent: Yeah I love speaking with, and participating in, these types of events because you just get to see such an interesting cross-section of companies and vendors and partners that are seeing the exact same thing we are. And what it allows us to do as an industry is learn from each other, share best practices with your audience and merchants and retailers out there. It's an opportunity for us to come together to discuss some of these problems, these opportunities and challenges as colleagues, to innovate and make us better as an industry.
We're in this as an industry to help our retailers are restaurateurs, the entire community out there. Speaking with our peers is a great way to level up everyone's product set, mindset, and how we can help people out there. In the end, we're here to serve our collective community and I think by sharing our ideas, best practices, experiences, we can do better for everyone. So that’s what I get excited about. You know, you’re working remotely from home, it’s hard to get plugged into the mainstream sort of dialogue and be able to have contact with your peers and your friends - so it's great to be able to get together and talk about such an important topic for 2021.
Daniel: How do you see some of these technologies and trends that we discussed earlier, specifically touchless, intersecting with some of the different panelists’ backgrounds and expertise and some of what you're hoping to chat about?
Laurent: It would be interesting to sort of frame the question to the panelists: “what's going to snap back to normal what's the new baseline?” and how they think about their products and services and their customer base. That’s something we think about every single day as we chart our future and of course, there's so much uncertainty and unknown for the upcoming year or so I think that's a really interesting way to frame a discussion. I’d be really interested to hear feedback on the retail landscape in that context as well as any other thoughts or perspectives that will help us prepare for 2021, that's going to be a really interesting discussion point.
Daniel: And as our listening audience prepares for the roundtable coming up here again on October 29th, what are some takeaways you hope industry professionals get from the panel and why? What are you really expecting to be communicated and give us a value judgment on some of the takeaways?
Laurent: As we think about the future, knowing contactless is here to stay. Having conversation around this, making customers feel comfortable with this new normal is an important strategy.
I think number two is: use this as an opportunity to think about your long-term digital strategy. Don't think about quick fixes, don’t think about checking a box “I have contactless, I have touchless”. Just think about the ecosystem, think about what this can do for your business long-term.
And then, the third thing I would say in the context of our core market, which is the hospitality market, contactless doesn't mean robotic and cold. It can supplement your dining experience, it can supplement your retail experience to make it better. There’s this sort of fear that a contactless or touchless experience is going to take away from the shopping, dining, or retail experience. I think that couldn’t be further from the truth. I think that’s going to make it better. It’s going to put more control into the hands of your guests and customers. And that's something to embrace not be scared of.