Two weeks ago Amazon introduced the Echo Look and yesterday; the Company introduced the Echo Show. These are second generation products to the Echo and Echo Dot which kicked off Amazon’s voice-enabled ordering wave. All these voice-enabled devices will serve to fuel the growing trend of users making purchases and interacting with Siri-type voice-enabled assistants. Amazon is starting to socialize these devices both of which serve to expand Amazon’s retail sales capabilities. Community banks now have a limited chance to get customers to use their credit and debit cards on the platform to increase interchange and card revenue while maintaining both engagement and the collection of data. In this article, we explore the why and how of marketing alongside the largest force in e-commerce.
Consider the near future, measured in months not years, where consumers take advantage of both the Look and Show to generate clothing recommendations that can be driven by taking photos of yourself that are then analyzed by Amazon’s machine-learning algorithms. Recommendations are then generated tailored for individual preferences, environment, and requirements. Finally, Amazon will then add a crowdsource element as users will be able to see a layer of human opinion from both friends and fashion experts. The app will keep a complete history of past outfits allowing you to both record what you are wearing on any given date or occasion and will record how you felt about the outfit. Shortly, the app will know you better than your best friend, so you will be eager to review items that it has picked out for you after scouring trends, celebrity photos, and similar data streams.
With these new products, Amazon gains a huge advantage by giving us the first digital personal shopper at scale. Amazon is already a leader in voice-activated shopping as with Alexa, Amazon’s Fire TV and other devices, you can purchase groceries and anything else Amazon sells all while you are moving around your home or office. Currently, only 9% of households use voice commands to make purchases, so the technology is still young which is why the time is ripe for banks.
How To Get Your Card On The Payment Platform
Usage shows that consumers register between one to three cards for payments on each e-commerce site. Once they register, it has proven difficult to get users to change cards. This means that it pays for community banks to spend effort now in order to incentive customers to register their bank-issued credit and debit cards on any given platform so that the community bank can remain top-of-wallet. While we produced this article in response to Amazon’s new battery of products, it pertains to any e-commerce or payment’s platform. Here are some tactics that some of the large banks are successfully using at getting their credit or debit card in the number one position on any given platform:
Marketing the product: By simply informing customers of various products and asking for your card to be registered is the most straightforward and impactful way to get your card registered. A video or how-to-guide to show users how to register their card in Uber, Lyft, Venmo, Paypal, ApplePay, Amazon, etc. will work wonders. While many will ignore you, a few customers that have been meaning to get on will take your advice and register.
Education: Banks can take a thought leadership position and post information on the safety and security of using their cards online. Security is usually the top reason the consumers state for reasons why not to utilize an online e-commerce or payment platform. There is a bunch of negative content on the internet about why you should not use your debit card that banks could counter and further educate customers on how to mitigate the stated risks.
Reminder emails: An automated email drip campaign that does both the above will keep your bank’s name in front of the customer and will let them know that you want to be the card of choice.
Promotion/New Product: If all else fails, community banks can offer a special promotion that provides a free service, $20 bonus on their first payment or purchase, double reward points or something similar to incentivize customers to use or switch cards. In a similar vein, banks can roll out a specialty card that is seemingly designed for the purpose of online payments. Adding additional attributes such as security features, ID Theft Protection, special rewards, product insurance or similar will help convince customers.
At a minimum, it pays to have a strategic conversation about the above so your bank can make a proactive decision around both if it wants to entirely cede the payment space and how this change in voice-assisted shopping will further impact physical retail locations and the associated impact on your bank. Amazon is already the world’s largest retailer, and both the Echo Look and Show will serve to increase the technology adoption and potentially disrupt smaller banks from the payment game.
We have found that you have to provide about 30% more value to get a customer to go through the hassle of switching cards on payment and e-commerce platforms. As products like Amazon’s Look and Show become more popular and gain more usage traction, it will pay for community banks to remain relevant and invest marketing dollars now to protect their fee revenue stream in the future. It works best if you can be the first card your customers grab when they initially register for a given app. With adoption just in the nascent stages, the time for banks to move is now. Otherwise, banks are going to have to get even more creative to get their cards back in the number one position.
Submitted by Chris Nichols on May 10, 2017