In the dynamic world of commerce, the entry or transition from online to in-store operations presents a lucrative yet challenging frontier for startups. With a market where 81% of global retail sales still occur in-store compared to 19% e-commerce, the potential for growth and expansion in this arena is immense.
This shift, fueled by technological advancements and evolving consumer behaviours, offers startups specialising in payments and commerce or related services like embedded finance, delivery, insurance, and loyalty or rewards, among others, an opportunity to scale and innovate.
Despite its complexities, the in-store landscape offers startups higher conversion rates, less competition than the saturated online market, and a chance to enhance customer experience through tangible interactions.
StartupIN Program: Opening opportunities in in-store commerce
For startups, venturing into in-store payments means tapping into an established market with high visibility and consumer reach.
Ingenico, a global payment industry leader, stands at the forefront of this space, offering a comprehensive suite of in-store payment solutions. Their extensive global footprint and 42 years of innovation and expertise in the in-store payments market provide startups with a reliable platform to expand their services. Ingenico’s smart POS terminals, managed services, and cloud-based orchestration platforms provide an omnichannel solution, bridging the gap between online and physical commerce.
The StartupIN program by Ingenico is particularly instrumental, offering startups the tools, business connections, and guidance needed to navigate the in-store landscape successfully.
Mickael Joye, Startup Integration Lead at Ingenico, elaborated on the company's role in fostering startup growth.
More importantly, our global expertise and presence provide these emerging companies with comprehensive support in navigating the intricate maze of regulations and protocols. By doing so, we help to streamline their journey, easing the often time-intensive assessments and integrations, and facilitating a smoother and more efficient entry into the market.
Mickael Joye’s insights into Ingenico’s commitment to enabling startup growth in the in-store payments sector set the stage for understanding these startups’ specific challenges. The journey from concept to market is paved with obstacles and the StartupIN program can provide the solutions that will be integral to their success.
The challenges and solutions
- Understanding POS terminal hardware: Startups transitioning to in-store spaces must navigate the world of payment terminals. With Android open OS terminals, developers can transform these devices from simple payment tools to comprehensive commerce solutions.
- In-store entry costs: One of the primary barriers for startups moving into in-store environments is the initial investment in POS terminal hardware. Ingenico’s StartupIN program directly addresses this challenge by providing startups with the necessary hardware for their proof of concept, free of charge. It reduces the financial burden on startups but also allows them to experiment and innovate with their in-store solutions without the concern of upfront hardware expenses.
- Microservice architecture & API-driven solutions: Microservice architecture can help build in-store solutions that complement online products. This approach allows startups to maintain agility and resilience without compromising their core online solutions.
- Scalable infrastructure: In contrast to online shopping, where delays are often tolerated and transactions can be revisited, the in-store experience demands immediate and seamless transactions. Delays or inefficiencies in physical stores can lead to instant customer dissatisfaction as shoppers are unlikely to wait and may leave without purchasing. Therefore, robust and scalable infrastructure, supported by cloud technology with auto-scaling and regional deployment, is essential in ensuring swift, reliable transactions and upholding service-level agreements in the in-store environment.
- Automation & merchant onboarding: Startups need to streamline the integration of their solutions into the diverse frameworks of merchants, especially those associated with Ingenico’s customers. Dedicated merchant management APIs can significantly ease this integration process and ensure efficient adaptation and service delivery within the in-store commerce sector.
Gokula Krishna, Chief Technology Officer, Anycover highlights the impact of such integration: “Integrating with Android Open OS terminals has been a game-changer for us, bridging the gap between digital convenience and in-store personalisation. The API-driven architecture not only simplifies retailer onboarding but also empowers us to innovate rapidly, ensuring our in-store solutions are as dynamic and user-friendly as our online presence. This has been instrumental in enhancing the shopping experience for our customers and has given us a significant edge in the competitive retail landscape.” - Customer experience at Point-of-Sale: Enhancing the in-store experience involves incorporating POS terminals and mobile-centric elements for a user-friendly journey. Technologies like QR codes and NFC are vital in optimising data capture for efficiency and loyalty programs.
- Navigating ECRs and payment device integration: The diversity in Electronic Cash Registers (ECR) protocols poses a significant challenge due to regional variations and legacy issues. Each integration must be approached individually, requiring thorough assessment and time investment.
- Security in in-store transactions: Ensuring security in in-store transactions is paramount. Startups must comply with PCI DSS, encrypt data in transit and at rest, and maintain stringent access controls to protect customer data and uphold credibility.
Unlocking growth opportunities
While the in-store payments landscape presents challenges, it is also abundant with opportunities for forward-thinking startups. With the right strategies, such as leveraging microservices architecture, scalable cloud infrastructures, and robust security protocols, startups can overcome the hurdles of infiltrating this space.
The advantages of higher conversion rates, a less competitive environment than online commerce, and innovation potential make the in-store space attractive. Ingenico’s support through the StartupIN program further empowers startups to capitalise on these opportunities, paving the way for a successful foray into in-store commerce. While complex, this journey is a promising avenue for startups to expand their footprint and impact in the evolving world of commerce.
If you are an early startup that is an in-store native or have plans to enter the in-store space, visit the StartupIN Program website to find out how Ingenico’s innovations can help your business pursue in-store commerce success.
