Interview

Interview with DOCOMO Digital CEO on omnichannel strategies for businesses to grow

Monday 27 November 2017 10:45 CET | Editor: Melisande Mual | Interview

Hiroyuki Sato, CEO at DOCOMO Digital: Our company offers merchants new alternative payment methods and omnichannel strategies for better conversion rates at checkout

This interview was first published in the Online Payments and Ecommerce Market Guide 2017, our flagship publication analyzing the latest trends in the payments ecosystem. Readers who enjoyed this interview are invited to download the guide, which offers multiple insights from industry experts.

What are the main challenges that some merchants face when integrating Direct Carrier Billing (DCB) into their businesses?

The first issue merchants have to deal with is upgrading their host system in order to manage the complexity of accepting orders online or through mobile devices. This is a very costly and timeconsuming exercise for the merchant, one that has to be planned months in advance as to have a minimum impact on their live operations.

Next, they will have to upgrade or develop new mobile applications. Any new payment method will require new coding and development on the merchant’s website and mobile application. This also means devoting resources to code, test, pilot, and implement the new application, as well as the purchase flows in conjunction with their partners, telecommunication operators and consumers.

Finally, awareness of the new payment method is another key issue. Once a new payment method is implemented by the merchant, it is critical to ensure that the internal staff as well as external customers are aware of this new payment method. The merchant will need to train their staff to support queries from customers who want to adopt and use direct carrier billing and, likewise, customers will need to have the required tools and incentives to adopt the new payment option.

DCB works well in the digital space of commerce. What could you tell about its adoption into the brick-and-mortar space?

Direct Billing has secured a significant stake in the digital space where it is used for in-app purchases and for seamless subscription to various products and services.

However, the benefits of DCB can also be seen in the ‘real world’, where consumers use carrier billing to make purchases for physical small-value goods (public transport tickets, parking tickets, event tickets for sports and entertainment) and services. In Japan, consumers use carrier billing for fashion, groceries, appliances, and transportation tickets. Japanese culture is a predominately mobile-first one and cities offer consumers the possibility to charge prepaid transportation cards (similar to Oyster in the UK) from their mobile phones, making the whole process of buying a ticket quicker and more efficient.

In Europe, card payments volume is very high. The introduction of new regulation, such as the PSD2, will allow new market entrants to work with telecommunication operators and merchants to fully utilise the benefits of DCB. Telecommunication operators can leverage their own customer base, authentication and billing capabilities to ensure the success of carrier billing for in-store purchases.

DOCOMO Digital is a global company, with a strong focus on Europe. How does DCB adoption, by consumers and businesses alike, differ in Japan and Europe?

In Japan, DCB has been in use since 1999, when, with the launch of i-mode, consumers were able to purchase content on their feature phones. This evolved from digital to physical goods and services, and Japanese consumers have fully embraced DCB as a major payment method in the last decade. As a result, Japanese business and culture are heavily rooted in using mobile devices to make purchases. Lower levels of regulatory hurdles, superior operator risk and authentication management systems contributed to the growth and widespread adoption of carrier billing in Japan.

In contrast, Europe is a heavy-card penetrated consumer payments market. Here, the majority of DCB adoption has been seen in in-app purchases, digital downloads, and online subscriptions. This region has several regulatory and ecosystem challenges that tend to slow the growth of DCB.

How does DOCOMO Digital assist businesses to make the most of the omnichannel opportunity?

We have a number of specific products and services for merchants who need mobile payments capabilities. We can help merchants develop a new mobile application, introduce new payment flows or add new payment methods. The end result is a tailored product or service, which can be combined with our marketing capabilities to help boost awareness and adoption of the new payment services.

Could you name some of the biggest challenges for merchants to become truly omnichannel?

In omnichannel commerce, retailers and wholesalers must have a single cross-channel overview over their customers’ behaviour with total visibility of their inventory and order management across all their channels. This has to be done within a single platform that manages all online orders, from websites to marketplaces. Moreover, the data should be available in real-time and accessible to all users who manage the backend system.

A flexible Point of Sale (POS) system that can link and integrate with online sales channels is also essential. Unfortunately, many retailers’ IT systems, which were not designed to incorporate customer insight across all channels, make developing and adopting an omnichannel strategy difficult. In today’s IT market, most big players’ systems are the byproduct of outdated code bases (and system architecture) dating back to the late 80s or even earlier. As a result, various companies have patched together their backend systems as best as they could.

However, this has led to inefficient or insufficient performance, with inherently restricted features. Even if newer players have built systems with more modern code, they were still unable to address some core architectural challenges. Thus, even today, managing unlimited sales channels and inventory locations of various types is still a major engineering challenge.

About Hiroyuki Sato

Hiroyuki Sato, a 25-year NTT Group and NTT DOCOMO veteran, with over seven years of global business management and M&A experience, leads DOCOMO Digital with his ambitious vision to enable next-generation mobilecentric digital commerce in the global market.

 

 

About DOCOMO Digital

DOCOMO Digital is an innovative payments solutions provider. With over 15 years of experience building and safely operating the world’s most advanced mobile commerce environment, the company works with partners to bring to life their digital aspirations.


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Keywords: interview, DOCOMO Digital, DOCOMO, Japan, Europe, omnichannel, merchants, alternative payment methods, checkout, conversion
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Countries: World