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Exclusive: PayPal Innovation Guru Shares Secrets to POS Success

18.05.12

Not even a month into 2012 and the payments space is already abuzz with innovation. One company seeming to have its finger in many of those pots is PayPal . Patrick Gauthier, Head of Product Strategy and Business Operations for Retail Services at the company opened up to PYMNTS.com about goals for the Home Depot pilot, the digital wallet's future and addressed in-store payments as PayPal's game to lose.

KAREN WEBSTER, PYMNTS.com: So we’re fresh off the NRF conference. Or I guess you’re still there. So I thought we could talk a little bit about what PayPal is doing to reinvent the shopping and retail experience for both consumers and merchants. So to kick off that conversation why don’t you give us a little overview of the big splash that you guys made around your shopping showcase? What did anyone miss who wasn’t fortunate enough to take your tour?

PATRICK GAUTHIER, PayPal : Yeah. So both at the shopping showcase, which was a pop-up store that we’ve had in New York for now a couple months, and at the NRF, we have been showcasing commerce vignettes that cover the spectrum of commerce, a coffee shop, an apparel shop, a home improvement store, and a supermarket. And the point of those vignettes is to really illustrate how a number of new technologies and new platforms are going to radically transform -- are already transforming -- the way consumers shop and buy and the way merchants can engage those consumers. So let me give you a couple of examples. In the coffee shop vignette that we had both at the NRF and in the shopping showcase, we show how you can integrate mobile for engagement before the store. You can preorder. You can receive offers specific to that particular store when you’re in the vicinity. And then at the store use either your phone or a different modality -- a card or simply keying in your phone number -- in order to execute the payment. And so the storyline in this is the consumer can start to engage with the merchant before they’re at the store. And the engagement with the merchant at the store can be much richer. The loyalty cards of the merchant can be included in the experience. You can really tie much more the purchase with consumer preference and therefore personalize. But also with any form of rewards that the merchants would want to do to really then have a direct connection between the business the consumer is making with that merchant and ongoing efforts that the merchants have to stay connected with that consumer. Another example would be the apparel store. Again we have both at the NRF and at the shopping showcase. And there this is a fairly elaborate vignette, which starts again outside of the store. But in this case we start with the window. And the action of looking at the window. Saying oh, there’s a product that I’m interested in here. Might want more information. I’m going to potentially scan some more information. And even through the interaction with the wallet have some clarity over what funds I have available. Which may be direct funds or credit that we extend to that consumer. Because the store was a high-end store. So it’s more about discretionary shopping. And then in the context of the interaction. OK, I’m interested in a product that the store has. And I see using a technology such as Milo that they have a certain inventory. And because they recognize me as a frequent customer they’re willing to extend a certain offer for me to not just the product that I’m interested in but also a companion product. And to keep them on hold for me for a period of time. A day or so. Until it is convenient for me to come and pick it up. And we translate that into an experience into the store, where having reserved the product, now I come to pick it up. The interaction again is such that the store knows me. It’s personalized. And the knowing me includes knowing my sizes for instance. Conduct the transaction. And then as the consumer is exiting the store, there is a promotion by the store for a gift card. And that gift card is a virtual gift card. I scan a barcode, initiated a transaction for gift card, which by the way via e-mail I now send to a family member as a birthday present. And then collect in my wallet funds. Promotional funds for the store for my next shopping journey there. And so to tie again multiple opportunities to engage the consumer. So what those vignettes showed is in a narrative that was very practical how the interaction between a merchant and a consumer is changing in time and in space as well as in kind. And so it’s of course argued that first commerce drives payment, not the other way around, and secondly we have to be willing and capable to support commerce anywhere anytime in any way that the merchant and the consumer desire. That we are now at a time of reinvention. Rapid reinvention that uses multiple channels and mobile in particular to create a richer degree of engagement. And that it is something that the consumers expect, but it’s also something that the merchants now have an imperative to do. Because otherwise they will be remedied at the low end of their segment.

Source: PYMNTS.com