How Éxito increased contactless payment transactions by 44%

Problem

Éxito wanted to improve the customer experience by driving contactless adoption

Éxito, a large, innovative retail chain in Latin America, was exploring ways to improve the customer experience across its portfolio of stores. The retail industry was moving towards a contactless payment model, and Éxito had an interest in evaluating the use of the technology across its footprint of stores in Colombia.

Mastercard partnered with Éxito to examine the entire ecosystem – 500 stores of different sizes across Colombia - and segmented stores by location, type (convenience, grocery, superstore, etc.), number of cashiers and other elements. The segmentation identified 34 stores for the pilot, and 231 that were similar to the pilot stores, to act as a control group.

The pilot was specifically designed to:

Mastercard and Éxito ran pilots that tested four key elements using three unique scenarios to help isolate the impact of each.

Key elements included:

Cashier training
Éxito provided their cashiers with comprehensive training on the benefits of using contactless, supported by a range of online and offline materials outlining campaign details. While all stores had training, the format was split between virtual and in-store to see which worked best. Branded customizable training templates were provided to Éxito by Mastercard.

Cashier incentives
All cashiers were incentivized to push contactless, with a weekly prize for percentage growth, and another for the best communication of contactless benefits. The latter was evaluated by mystery shoppers.

Branding and communication
In one group of stores, promotional materials (banners, stickers, posters) were placed across the aisles, on aisle floors and at the checkout counters, while the second group of stores displayed the messaging only around their checkout counters. Branded customizable templates were provided to Éxito by Mastercard. Communication effort only included in-store messaging. Online channels like EDM and social media were not used in this campaign.

Cardholder incentive
Different cardholder incentives were tested to see which value incentive [high ($10–$15), low ($2–$3), or no incentive] was most effective in driving contactless transactions.

By using Test & Learn® to optimize the contactless campaign, Éxito could drive a 19% return on investment

The pilot showcased the impact that encouraging contactless transactions would have on the region. Contactless transactions increased by 44%, as an average across all stores, with much of the increase coming at the expense of other payment methods like Chip & PIN. Éxito also observed a modest increase in total cash transactions of 1.1%, as contactless transactions were meaningfully faster and allowed cashiers to handle more transactions during store hours. Overall, total transactions increased by 1.7%.

The store’s size impacted the amount of contactless and cash transactions. While every store but Éxito Express (a smaller convenience store) saw a significant increase in contactless, large Éxito supermarkets also saw an increase in cash transactions over the course of the campaign - likely due to increased throughput. For Éxito, this meant introducing contactless could be especially beneficial for their larger store formats. Moving towards contactless resulted in a 3.9% overall saving in checkout time (approximately 3 seconds per customer). This time reduction included the time it took the cashier to discuss contactless with the customer. By looking at each scenario, Éxito was able to identify the impact that each campaign element had on total transactions, with scenario 2 bringing the best results overall. On-site training over virtual was key, with a much bigger contactless and cash uplift for stores that offered physical training.

The analysis also revealed that low-value cardholder incentives worked just as well as high value ones, and cashier incentives had little impact – in fact, the best performing stores were the ones that did not win.

Furthermore, putting signage around the store seemed far less effective than just having smarter signage at the Point of Sale, potentially as people are more concerned about finding their products when they are walking the aisles. Modelling the variables of Scenario 2 to the remaining 284 large Éxito stores in Colombia suggests there to be a substantial opportunity to drive transactions through contactless. It is estimated that optimizing the campaign and extending it across these additional locations could bring Éxito significant additional revenue, with 19% return on investment.