Monday, June 23, 2014
"We're really starting to see merchants eagerly adopt these apps," said Mark Schulze, Vice President of Business Development at Clover. "We could have released the app store and it could have landed with a huge thud and nobody cared. But merchants are in there. They are downloading things and integrating things."
Silicon Valley-based Clover, operating as an independent subsidiary of First Data, sells Clover Station, a tablet POS system that connects merchants to the app store, where they can surf hundreds of apps geared to their specific vertical markets, such as hospitality and restaurants.
The Clover App Market operates an open developer platform. Third-party developers write apps for Clover's marketplace that focus on particular needs of merchants, like inventory tracking and customer engagement. The developers set the prices they charge merchants for using their apps via Clover Station. "One developer said I get what you guys are trying to do," Schulze said. "The analogy is like you're iOS for merchants."
First Data unveiled Clover Station at the 2013 Money2020 conference held in Las Vegas last October. Since then, Clover has been busy building up the app marketplace. It's most recent additions are a private-label gift card app from Gyft Inc. and an instant customer feedback app from DropThought Inc. The DropThought app addresses a growing interest of merchants – how to leverage mobile technology in real time to understand who their customers are and provide better service to them. DropThought allows restaurant patrons, for example, to provide instant feedback on the quality of meals and service through the Clover Station itself or through virtual (email/text) or printed receipts.
But the app also addresses a growing merchant concern – reputation management. Through social media and review sites like Yelp Inc., customers can quickly damage brands with bad reviews. Karan Chaudhry, co-founder and Chief Executive Officer at DropThought said time is the primary factor that merchants are up against.
"It puts businesses on the defensive because they are blindsided," Chaudhry said. "If this is the first time they are hearing about it, but the more they hear about it – guess what? –the more the whole world hears about it at the same time. So they don't really have the time to recover."
If a bad review is published online, the longer it goes unaddressed the more it is associated with the brand. "As a result, if you want an effective intervention, it will be that much more effective the closer it is to the point of experience," Chaudhry said.
Reviewers on social media also tend to be a vocal minority, he added, which means a very small percentage of customers can have a disproportionately large say over the shaping of a merchant's image. DropThought counters that by raising participation rates. "We are seeing five times to 100 times more data coming to these businesses on our existing clients as compared to other social media platforms," Chaudhry stated.
DropThought cited a recent test conducted at three restaurants over a 16-month period that concluded negative reviews on Yelp! dropped between 8 and 17 percent in the eight months after DropThought instant feedback was introduced. DropThought said a one-star improvement in a Yelp rating translates to a 5 to 9 percent revenue increase.
Clover added Gyft Cloud to its marketplace in April 2014. Gyft Cloud allows small to midsize businesses (SMBs) to sell their own branded gift cards to customers. Vinny Lingham, co-founder and CEO of Gyft, said an estimated 90 percent of SMBs do not offer plastic gift card programs for lack of money and resources. "[E]ven though many owners want to sell gift cards, they just don't have the budget or capabilities to enable them," he stated.
Via Gyft Cloud, virtual gift cards are stored on customers' smart devices and can be remotely topped up. Through the service, merchants can also issue store credit rather than cash refunds in order to boost repeat visits.
Schulze noted that First Data offers its own virtual gift card platform, but the acquirer doesn't mind the competition. "It is an open ecosystem," he said. "We even bring in products that are competitive to First Data products. … It's really about giving merchants choice and helping them run their businesses better."
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