PayPal’s Gauthier: Retailers Needs to Bring Together Products, Places and People

For PayPal’s Patrick Gauthier, the future of commerce isn’t online — it lays at the intersection of places, product, and people. During a morning keynote at Street Fight Summit West Tuesday, Gauthier, the GM of emerging retail services at PayPal, said that the challenge for retailers today is to reach consumers across mediums as much as dominating online or brick-and-mortar.

“Online, it’s about connecting products with people,” Gauthier said. “The shopping journey starts with ‘What do I want to buy today?'”

With 75% of smartphone users now identifying themselves as mobile shoppers, and 70% saying they’ve used their phones to find a store or store information, the time has come for retailers to create what Gauthier calls the “commerce 360 environment.”

Gauthier, a long-time payments executive, said instead of fighting over consumers in a noisy online environment, retailers are using consumer data to transform the shopping journey and message consumer across the purchasing funnel.

“If we want to connect with consumers, we have to recognize that we have to speak to the heart as much as to the mind,” Gauthier said.

Gauthier and his team at PayPal have spent considerable time looking for ways to make commerce personal, focusing on the underlying notion of “synthetic identity.” The challenge facing marketers, says Gauthier, is connecting very different pieces of data— from a user’s phone number to their phone’s device ID to a payment account — in order to recognize consumers as they move throughout their day.

Using this data, marketers are able to create the types of personalized recommendations that actually trump traditional product offers and discounts. Although 55% of shoppers find personalized offers and recommendations appealing, Gauthier said there’s a reason why brands like Apple don’t typically discount their products in the traditional sense. Recommendations, on the other hand, provide retailers with a way to increase conversions without lowering prices. Currently, one-third of Amazon’s business comes from recommendations.

“Funny enough, people trust other people more than they trust a particular retailer that might want to sell them something,” Gauthier said.

Gauthier also touched on proximity messaging technologies — in particular bluetooth beacons — as a way to not only message, but understand consumer behavior as well. He suggested that store analytics as a whole may see a boon before retailers start to adopt in-store messaging en masse. For brick-and-mortar retailers, these hyperlocal tools are breaking down boundaries and connecting elements of the physical shopping experience to what may be happening online.

Retailers are expressing a high degree of interest in beacons as a way to create continuity between what happens before and after consumers arrive at their stores. While single directional beacons, like iBeacon, have the most visibility today, Gauthier said there are actually opportunities to use beacons in a bi-directional way, as well. Bi-directional beacons could potentially allow retailers to channel from a location to a server, including both payments and personal content in a way to personalize the relationship with shoppers.

“This [is] about treating a person as a person,” Gauthier said.

Stephanie Miles is a senior editor at Street Fight.