As co-founder, President, and a Board Member at Omnyway, Mohammad Khan is at the center of a revolution in retail payment and loyalty systems. As brick-and-mortar stores try to keep pace with the eCommerce juggernaut, Omnyway is giving them tools to challenge Amazon and other online sellers – and maybe even beat them at their own game. The mingling of mobile, online, and in-person shopping is also creating a powerful challenge for traditional retailers – as well as impressive opportunities, in Khan’s view.
Tim Spenny, a FinTech thought leader and SVP in market researcher GfK’s Financial Services practice, recently spoke to Khan about his company’s remarkable history and the evolution of the retail marketplace.
Spenny: Can you tell us a little about the work that you’re doing at Omnyway and the impact you’re having on the market?
Khan: Omnyway started two-and-a-half years ago, when nobody was listening to the digital commerce needs of large retailers. They were looking for a platform to deliver a much more enhanced shopping experience in physical stores, online, and through other channels. Our objective was to make a mobile app, because we believe very strongly that apps are some of the best tools for retailers to build relationships with their customers, to influence them positively and to gain loyalty.
Starbucks is a great example. Since it added pre-ordering to its mobile app – relieving customers of waiting in line – 30% of its sales in the United States now come via the app. An even more salient example is Amazon, which has taken away many of retailers’ previously loyal customers through its mobile app and online. Our objective at Omnyway is to enable retailers to deliver service that is equal to or even better than Amazon.
So we developed what we call a contextual digital commerce platform, which is used to enable many different use cases within the retailer’s mobile app. One of our services allows consumers to participate in retailer loyalty and rewards and other programs – streamlining all of that into redemption at the time of checkout. Making it easier for the customer to participate in the loyalty reward program is a major win for retailers.
Kohl’s has rolled out Kohl’s Pay as part of its app, which delivers that checkout experience. Working with Omnyway, Kohl’s was one of the first large retailers to go live with this offering – in October of last year – and it’s been getting very good reviews.
Spenny: I know that you recently had a name change, from Omnypay to Omnyway. What was the driver there, and what do you see the name change really signifying?
Khan: Omnyway is all about enabling the whole digital shopping experience; the role of our platform starts as soon as you go in. We enable things like self-checkout or mobile for payment. So, the payment features is about 55% of what we do as far as solutions that we deliver to the retailers; and we saw that the name Omnypay would continue to remind our potential customers that we started as a payment-only company. We needed to expand the perception of what we do, and that’s the reason we changed Omnypay to Omnyway. We also did not want to come off as a payment option, like ApplePay or SamsungPay; some people were thinking of us this way.
Spenny: What do you see as the biggest challenge the retail industry is facing?
Khan: I think the biggest challenge is the consumer-payer exchange. Consumers are using mobile devices when they come to a physical store or shop online; they make decisions about what product they’re going to buy, whether the price is good, and they seek product information and other people’s opinions. They are doing all of those things while standing in the physical store. In fact, a survey last year showed that 10% of the frequent buyers of Amazon in the US buy through the Amazon mobile app while standing in somebody else’s physical store.
To survive and prosper, retailers need their own mobile app, so that the same person who might use Amazon’s app while standing in the store would be tempted to pull out that retailer’s own app instead. Shoppers should be excited to use that retailer’s app, because they’re going to see a more personalized, relevant experience.
Spenny: Consumer mobile behavior is definitely having an impact on the in-store experience. How do you feel that is going to change over time?
Khan: If you go today into any mall or retail store, you will notice fewer shoppers and associates. There used to be a lot more help – people you could talk to for information. This challenge is going to continue to grow unless retailers turn the situation around and make their customers’ store visits much more productive and efficient – and also more fun and engaging.
For example, I should be able to scan items by myself and see the product, the price, and the recommendations – tantamount to me using my mobile device. I want to check out right there, rather than stand in a long line at the point of sale; I should be able to complete that check-out anywhere in the store. That is why we enable scan-and-go.
Think about when you go into the department store and you like the jeans – it’s a good design and everything is right; but your size is not available, so you walk away. In a digital platform-enabled environment, that item in your size can be ordered, put into your e-cart, and become part of the complete sale checkout. But that item will be shipped to your home instead. We call it the “virtual aisle,” or the “endless aisle” approach.
Spenny: Can you tell me how payment systems and loyalty are connected – or should be – in today’s world?
Khan: I think today loyalty has new meaning. Five years ago, loyalty meant that you earn points, and then you were going to redeem those points going online. But it was very hard to redeem them, and so people gradually stopped participating in those programs. Today, loyalty means that you are recognized when you walk into the store. You are given discounts, and you enjoy those discounts during that trip to the physical store. Loyalty means that you also earn points – but you can redeem those points at the time of the purchase, as part of the purchase.
One example is the Kohl’s Yes to You loyalty program, with more than 40 million members. Loyalty points through the Kohl’s app/Kohl’s Pay can be redeemed as a dollar value at the time of purchase. You get a personalized experience and instant gratification when you are doing the shopping; that’s why this approach has started to produce much better results.