Executives at B.C.’s 100 largest private companies understand that innovation is vital to stay in growth mode. The key, however, is to strike a balance and sometimes not take the risks that can harm those who are on the bleeding edge of change.
Retailers are eagerly watching the rapid evolution in how customers want to pay for goods and services. Access to the “digital wallet,” which Google Inc. and MasterCard Inc. announced May 26, may come to Canada sooner than many think.
Now being tested in New York and San Francisco, the program allows customers to pay for goods with a wave of their smartphone. It is set to be rolled out across the U.S. this summer among the 120,000 or so retailers who use MasterCard’s proprietary PayPass technology.
“We’ve seen, in the past three years, the unbelievable evolution of what is going on with regard to how people in [Asia] are using their cell phones,” Starbucks Corp. CEO Howard Schultz told a Vancouver audience on the same day that Google made its big announcement.
“I’ll make a prediction that in two years – three years maximum – the amount of commerce that everyone in this room is doing on their smartphone is going to be close to 50% of how you are currently paying for your bills, services, products and things you are going to buy.”
Schulz did not wait to embrace the ability for his American customers to pay for goods with their iPhones.
He rolled out a program earlier this year that does not use Bluetooth or Wi-Fi to send bank account numbers to Starbucks headquarters. Instead, customers use a Starbucks app and wave their iPhones in front of a scanner while revealing a barcode that links with the customer’s Starbucks account.
“This is a time in the world when, not only can you not embrace the status quo, but you must push for reinvention,” said Schultz, who opened his first coffee shop outside Seattle in Vancouver’s Seabus terminal. That was in the 1980s, and the shop was named Il Giornale. He later bought Starbucks and rebranded the location with that now-ubiquitous moniker.
A&W Food Services of Canada Inc. CEO Paul Hollands counters that corporate executives’ first priority should be to think about what their customers want and not exclusively about what technology enables the company to provide.
He is closely watching the evolution of digital payment technology but has opted to be more progressive when it comes to having self-serve kiosks inside the company’s seven new urban street-front locations.
That’s something Starbucks has not done.
“We don’t want to be the leader in the payment technology area simply because we think it’s an area that continues to evolve and we want to make sure that the technology that we do use is proven, safe, secure and what our customers want,” he said.
Hollands’ self-serve kiosks allow customers to touch a screen to select their order and tailored toppings and then to pay by credit card.
The company has recently opened seven prominent street-front urban locations including outlets on Robson Street, at the Seabus terminal and on Alberni Street. Those outlets are a diversion from the company’s historic roots either in malls or as a drive-in restaurant.
The kiosks were selected for those locations because Hollands believes that the demographic who eats there is younger and more technology savvy.
Mountain Equipment Co-op CEO David Labistour told Business in Vancouver that, like Hollands, his big concern about new-fangled technological payment platforms is that they may put customer personal information at risk.
“We don’t compromise our members’ info in any way,” he said. “We’re looking at everything but we’re looking at it through the lens of, ‘We don’t want to drop the ball like Sony [Corp.]did,’” Labistour said.
That Japanese multinational recently endured the wrath of consumers when it had a security breach that put personal information in more than 100 million accounts, mainly in its PlayStation gaming network, at risk.
“The key is not so much innovation as adaptability,” Labistour said. “As markets change, opportunities exist all around you. If the rate of change outside your organization exceeds the rate of change inside your organization, you’re going backward.”