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Up to date, high-level business information that is relevant to our clients and contacts, helping keep up to date on the ver-changing business world of today.

Joe Weppler / September 25, 2020

Does Same-Day Delivery Work for Your Business?

As consumers rely more on e-commerce for their needs and wants, their desire for instant gratification does not dwindle. Consumers want their packages to arrive at their doors as quickly as possible, and as a result, same-day delivery has become the new benchmark.

Trends and Statistics:

In 2019, the value of the same-day delivery market was USD 5.87 billion, and by 2024 it is expected to be worth USD 15.60 billion. Automation and increased internet and smartphone usage are the main factors behind the exponential growth.

Another unexpected factor is the pandemic. As people avoid the mall and opt to shop online instead, deliveries have increased. To keep up with all the orders, brands have started to use storefronts as extra storage, bought mini-warehouses and opened dark stores — retail distribution centers that cater exclusively to online shopping.

Benefits:

Same-day delivery offers brands numerous alluring benefits. One of the biggest and most tempting is increased customer satisfaction. The digital world has given consumers access to an endless number of brands to choose from. If they are dissatisfied with one, they’re quick to find another.

Although endless options are good for the consumer, it leaves brands struggling to find ways to build customer loyalty.

Same-day delivery became an effective way to increase customer satisfaction and build strong connections with consumers. According to a recent study, 98 percent of consumers base their brand loyalty on their delivery experience and 84 percent would not buy from a brand after a poor delivery experience.

Increasing customer satisfaction ultimately leads to a second benefit: increased sales. Numerous studies have found offering same-day shipping increases conversion rates by 20-30 percent. In other words, a consumer is 20-30 percent more likely to complete their purchase when offered same-day delivery.

Challenges:

Implementing and maintaining same-day-delivery is not an easy task, and any company considering it should keep in mind the challenges they may face.

The biggest challenge is logistics. If a business does not have a proper system in place, getting a product from warehouse to consumer within 24 hours can be an impossible task.

Cost is another challenge. Although same-day-delivery can help increase sales, it does not come cheap. Increasing efficiency is the best way to reduce costs and increase profit. Many smaller companies opt for ‘batch’ deliveries to reduce the number of shipments, while others put an order minimum in place.

Lastly, staffing. Not only do businesses need to ensure they have enough staff, but also make sure staff are properly trained. Brands considering same-day-delivery need to decide if they are going to hire new staff or divide the work among current employees. Both options require planning and training to ensure the transition is smooth and effective.

Deciding what’s right for your business.

Same-day shipping is not beneficial for every business. Before jumping onto the trend, it’s important you take the time to consider if it’s right for your bottom line. If you can’t ensure great customer service for every delivery, then you run the risk of making false promises.

There are four prerequisites required for any business looking to implement same-day-delivery.

Product Availability: Brands must ensure they have enough products locally available. It is easier for big retailers to implement same-day-delivery since they already have various stores throughout the city with stock, but small retailers will need to invest in their warehouse network.

Real-Time Product Visibility: If a business does not know what products they have available and where the product is, it will be impossible to guarantee same-day delivery. Brands should first invest in their IT structure so they can track their product throughout the entire supply chain.

Fulfillment Capacity: Same-day-delivery requires the product to be picked, processed and shipped within 24 hours. Companies need to have proper logistics infrastructures set in place to reduce lead time and have the product ready to be shipped quickly. Real-time product visibility and a good warehouse network is a good starting point. Brands can make sure they can provide same-day-deliveries by auditing their supply-chain to find and fix any problems or delays, and investing in cartonization software to reduce packaging cost and time.

Flexible Last-Mile Capability: Last-mile delivery is the movement of a product from the transportation hub to the destination. Last-mile logistics are used to make sure this final stage is quick, and speedbumps are avoided. Investing in a new logistics system can help brands quickly respond to problems and get the product to the consumer on time.

Joe Weppler / September 18, 2020

Chargebacks & Friendly Fraud

If your business accepts credit cards, you’re likely familiar with the basics of credit card fraud and chargebacks. If you’re not, here’s the rundown:

Banks, payment processing networks and fintech companies pump millions of dollars and countless research and development hours into keeping our payment options secure. Despite their best efforts, credit cards and PINs still get stolen.

In the case of true fraud, a stolen credit card is used without authorized access. If you’re unfortunate enough that the fraudster used the stolen card to pay for something from your business, you’re likely to be subjected to a chargeback when the fraud is detected. That means the real cardholder gets a refund, and that refund comes from your account.

It’s a pretty straightforward process. The cardholder notices a fraudulent charge to their card or their bank notifies them of suspicious activity. They then file a dispute about the transaction with their bank. The bank reviews the dispute, and if they think the cardholders claim is valid, they immediately issue them a refund. The bank then issues a chargeback to the credit card company, and the credit card company issues that chargeback to your business.

From there, you can either eat the cost of the chargeback and the associated fees, or you can dispute the chargeback. If you have sufficient evidence that the transaction was not fraudulent, the chargeback gets declined and goes all the way back down the line to the cardholder.

True fraud happens, and when it does, you don’t have many options as a business owner apart from eating the loss. However, true fraud isn’t the only source of chargebacks that you’ll come across as a business owner.

So called “friendly fraud” occurs when a customer, dissatisfied with some part of your product or service, requests a chargeback from their bank rather than come directly to you for a refund. While these types of chargebacks can be honest, they’re often cheap attempts from cardholders to have their cake and eat it too.

In the case of friendly fraud over a simple refund, you’re losing out on both the sale and the product. On top of that, you’re saddled with any extra processing fees that get tacked on for the chargeback. Plus, banks and credit card providers hate chargebacks. If you experience them frequently enough, you may find yourself being labeled a high-risk business, and that can come with significantly higher processing fees and extra rules.

While it is possible to fight a chargeback, there are pros and cons. If you can prove that the sale was legitimate, you’ll likely get the transaction amount back — plus you protect your reputation with the banks. On the flipside, not all chargebacks are fraud. Fighting a chargeback from a loyal customer who made a mistake or had a legitimate issue with their product can jeopardize your relationship with them. You might keep the sale, but is it worth it if it means you’re losing the business of a repeat customer?

At the end of the day, disputing chargebacks is a judgement call — and hopefully not one you have to make too often!

Joe Weppler / September 11, 2020

How the pandemic made AR and AI essential tools

As society started to adapt to the ‘new normal’, Artificial Intelligence (AI) and Augmented Reality (AR) technologies became essential tools to meet both professional and personal needs. Below is a list of three areas impacted by AI and AR technologies.

The Office

Social-distancing measures and other restrictions left companies wondering how to maintain day-to-day functions while following the new rules. Working from home was the most obvious solution, but there was still a concern about a loss of productivity. AI/AR were adopted by many companies to fill the gap between at-home and in-office work and keep productivity high.

The main benefit of AR is that it enables workers to work collaboratively from a distance. Videoconferencing over Zoom, or similar platforms, has become a staple during the pandemic, but VR technology takes it one step further. AR technology enables colleagues in separate locations to work in a shared virtual space and virtually look at the same object. AR is especially beneficial for people working on projects that require product design and other creative and hands-on industries.

AI has similarly been used to make working from home easier. To accommodate the mass number of workers switching to the home office, companies started to use more Chatbots and automated I.T. systems to help answer the questions employees had. AI tech is also used to automate scheduling and allow for the use of e-Signatures.

The Service Industry

New technological advancements always create a mass fear of job loss. During the industrial revolution, weavers prepared for the worst when the spinning jenny was released. Luckily, the revolution also created many jobs.

Workers today are not so lucky. The difference between the industrial revolution and the current pandemic-induced AI/AR revolution is speed. During the industrial revolution and more recent periods of technological revolution, the implementation of new technology was slow. Workers had time to retrain and find other avenues before the technology took over. Since the pandemic put AR/AI implementation into overdrive, there was no time or resources available to retrain staff and many were left without work.

Workers in the service industry were hit the hardest by the transition. To follow government regulations and reduce the risk of transmitting COVID-19, companies quickly replaced workers with machines. Hotel chains deployed robots to assist guests to their rooms. Call centers replaced people with chatbots to answer questions virtually. Tollbooths are now run by AI operators. The list goes on and on.

 Retail

Retail brands needed to find a way to quickly adapt to COVID-19 restrictions and regulations without risking the ambiance of an in-store experience. AR was a perfect solution. AR has three main functions: visualization, annotation, and storytelling. Together, the three replicate the in-store experience from the comfort of the consumers home.

Brands like Amazon and Wayfair use AR to create an easier shopping experience. Amazon’s newly announced “Room Decorator” lets shoppers virtually place multiple items into pictures of their homes to see how it will look. Similarly, Gucci recently partnered with Snapchat to let users try on eight of its shoes virtually.

Before the pandemic, AI and AR were used by retail brands to generate personalized recommendations, answer questions with chatbots and provide a realistic look at a product. Now, for many businesses, it has replaced the in-store experience entirely. Jon Cheney, CEO of Seek AR, predicts the use of AR by retail brands will continue to grow even after the pandemic ends. Once people experience the ease and flexibility of shopping from home, they will no longer feel the need to go to a physical store.

 

For better or for worse, the recent increase of AI and AR technologies is undeniable. Both have quickly become essential tools used in sectors ranging from retail to healthcare.  So next time you are shopping online, visiting a hotel, or working from home keep an eye out for how your experience is being tailored by AI and AR.

Joe Weppler / September 4, 2020

Benefits of Banking with Biometrics

Picture this. You walk up to your front door and a beam of light scans your eye. The door opens and you walk inside. As you take off your coat, you receive a notification on your phone about an abnormal charge on your debit card. You lift your phone to your face and are instantly looking at your recent bank statement.

No, you have not been transported to a new spy movie. You are living in today’s world of biometric identification.

Biometric identification refers to technological systems and devices that allow machines to confirm an individual identity by comparing saved data to the live person. If you have a phone that you can unlock with your fingerprint or face, then you are using biometrics. Banks are one of many industries to turn to biometrics and have been working for years to implement it both in the front and back-end of their apps and services. The goal is to create a system that is safe and secure but still allows users to access services quickly and without hassle.

Improves Consumer Experience

When using traditional username/password identification, users need to either go through the ‘forgot password’ process and answer Knowledge-Based Authentication questions or contact a call center. Biometric identification removes this process and makes the app more user-friendly.

Increases Security and Fights Fraud

Since more people are using banking apps instead of going to brick-and-mortar locations, banks need to ensure their apps and websites are secure.

Banks consider biometric identification as a key tool for fighting fraud and securing financial and personal data. Biometrics have gone through rigorous testing and are found time and time again to be safer than traditional passwords and username logins. According to a study by consulting firm Deloitte, three-quarters of corporate cyberattacks are caused by weak passwords. The same study reported that 56 per cent of employees use the same passwords for personal and corporate accounts and 20 per cent share passwords with other employees. Hacks are mainly caused by human error and repetition of passwords.

By removing the need for a PIN or password, biometrics increase security and reduce the threat of information being compromised by hackers.

Fast and Accurate

The process of entering a username and password is relatively quick until you forget your password and must go through the ‘forgot password’ process. Now logging-in, which should have taken less than a minute, takes five or more. Banks were receiving negative feedback about the password process as people became tired of resetting and remembering passwords and wanted to find a solution.

Biometric identification makes signing-in fast and accurate. Users just scan their finger, face, or in some cases eyes, and login immediately.

Not a Perfect Science

Biometric identification is not perfect. Like any technology, there are weak points that need to be taken into consideration before use.  Biometrics’ main weakness stems from its main strength; only accepting a perfect match. This means if a person’s finger is greasy, there is background noise or poor lighting, the device will not recognize the person as a match.

Biometrics is also not immune to hacking and fraud. Sadly, as biometric technology evolves, so does malware. Since the introduction of biometric identification, hackers have started to use deepfakes and voice biometrics to trick the biometric software. Hackers will use AI technology to create a holographic image of the person or use audio manipulation to copy a person’s voice.

Looking on the Bright Side

These negatives should be taken with a grain of salt. You do not need to fear being locked out of your banking app if you just ate a large fry and have no napkins. Nor do you need to live in fear of a person making an AI replica of your face.

Many banking apps that use biometric identification use multi-factor authentication (MFA). This means the user can sign in either using the biometric scan or switch to a PIN or password. Even if your finger is greasy, you can still access your bank statements.

New software is being developed to identify and stop any attempts to fake a voice, face or fingerprint. One way to do this is with passive biometrics. Passive biometrics study the user’s inherent behavior, such as how they hold their thumb when they unlock their device, how they move the mouse, or how they type on a keyboard. These characteristics are taken into consideration when a user logs-in and prevents hackers.

It is also important to remember that for someone to hack into your account using biometrics, they would first need to steal your device. Luckily, it is much easier to tell if your phone has been stolen than it is a password.

Whether you are wary or excited about the use of biometric identification, it is clear it is here to stay. Banks and other industries, like retail, have become reliant on the security and efficiency of biometric identification.