Co-operative Group expand chip and PIN pad functionality

Wednesday, September 19, 2007

Through STS, the Co-operative Group is now able to gather up to 300,000 customer responses from stores around the country within 24 hours at a saving of £100,000 a time.

Using technology from Smart Technology Solutions Limited (STS), the Co-operative Group, the UK's fifth largest retailer, has expanded the functionality on its POS chip and PIN payment terminals to gather customer feedback and improve the customer experience. When paying for goods by credit or debit cards, a sample of the Co-operative Group's customers are presented with a multiple-choice question on the PIN pad asking for their views on the store, the retail experience or aspects of their lifestyles.

The Co-operative Group's chip and PIN transactions are processed using IBM StorePay payment technology and the integrated SmartNS software from STS. By adding a simple application to the SmartNS software, the Co-operative Group is now able to survey up to 300,000 customers at stores across the country. Responses are returned to the the Co-operative Group data centre within 24 hours. Previously, the Co-operative Group would pay up to £100,000 for customers to be surveyed at 24 stores with responses received six weeks later.

Information gathered by the Co-operative Group includes customer perception of their local store, waiting times, frequency of visits, along with information on customers' lifestyles, such as whether they are managing to eat their recommended five portions of fruit and 'veg' a day and how much they snack at work. The Co-operative Group is using the responses to enhance the physical retail environment, to better serve its customers' needs, and to increase the effectiveness of its marketing campaigns.

The Co-operative Group upgraded the payment terminals at its 8,000 lanes across the country in June 2005. The retailer installed IBM POS terminals running IBM's StorePay payment application and integrated SmartNS software. SmartNS integrates any smart card application, through any point of interface to any business system, such as IBM StorePay. The upgrade was, in part, to prepare for the arrival of chip and PIN but also to improve operational efficiency through improved integration of the the Co-operative Group's POS with other retail and business information systems.

The idea of running an application using PIN pads to survey the Co-operative Group's customer base was conceived in April 2006 by the retailer's in-house IT development team at one of its regular innovation days. Discussions with IBM and STS revealed that the process would be extremely straightforward and cost effective, requiring a simple extension of the existing STS software without impacting the core EMV security.

Lawrence Freeman, the Co-operative Group's development manager, said: "Extending the functionality on our POS payment terminals to gather customer feedback has been an extremely successful and satisfying project. Low cost and high impact, it's delivered all you could hope for from a project, and it would have been much more difficult without the flexibility inherent in STS' software."

He continued: "We can reach more customers more quickly and remain in tune with their feelings. The speed with which we can roll out new questions means we can respond to national events. We'll be using the system to see which good cause our customers would like to see us support as our charity of the year."

Cameron Olsen, vice president for business development at STS, said: "We're delighted to have played a part in such an innovative project that will bring the Co-operative Group even closer to its customers. The STS software provides the end user with complete control over the PIN pad, removing the requirement for expensive applications to be written every time a change is required. This project also emphatically demonstrates the opportunity for businesses to increase the returns on their chip and PIN investments.'

Andrew Spaak, payment solutions lead from IBM, said: "This shows the value that IBM's relationship with STS can bring to customers. Our payment application combined with STS' flexible offering allows the customer to not just perform chip and PIN but also to include value-add applications at low cost. As IBM has said, the implementation of smart card technology will not only allow retailers to go live with chip and PIN but also provides them with the infrastructure to innovate."