Bertrand Leseigneur, our US Retail Innovation correspondent, explains how New-York opens up slowly by slowly and embrace the post-Covid era.
Stores open almost normally following very strict rules. Thus, the number of people in store is limited, opening hours are shorter to allow more time for cleaning and especially the payment process evolves to leave more freedom to customers. The FinTechs sector is therefore exploding in various offers allowing Americans to pay, be paid or invest.
Similarly, the last few months have been marked by the Black Lives Matter movement. This protest movement against police violence against African-American populations has received strong support from the population, and from companies that have had to adapt their communication strategy and sometimes their board of directors.
Finally, the other topic that drives the city and businesses is the presidential election in November. This election, which will, as always, have a global impact, is even more important this year because of the economic and health situation in the United States. Businesses are calling for a massive vote this year and many initiatives are being put in place to make it easier for employees to vote.
FinTech start-ups are transforming the U.S. financial sector, including the way people lend, invest, lend, finance start-ups and even buy insurance. On average, one in three active consumers uses at least two financial technology services. Already in 2018, the United States accounted for 57% of the global FinTech market and it continues to grow.
The stock market investment sector is currently undergoing a major transformation. Google has even needed to offer a new web and mobile interface for its Google Finance in order to meet the growing demand for information on the stock markets.
Four of these FinTech startups are making a lot of headlines right now:
Square is a fintech company that initially specialized in payment processing solutions for small businesses in the United States. It is Jack Dorsey‘s company, who is also the CEO of Twitter.
Square is developing a comprehensive business ecosystem by integrating value-added services to complement its payment solutions across physical and online channels. The start-up has the advantage of being present in almost all sectors of commerce.
The volume of these transactions increases every year.
The company has also enjoyed incredible success in reaching the consumer market with P2P payments and cryptocurrency trading.
Square’s enormous advantage over its competitors lies in its simplicity. The Covid has forced some stores to quickly equip themselves with contactless payment solutions and Square perfectly meets this demand for customers who pay by credit card in particular.
Robinhood is an app that offers to trade on the stock exchange without commission.
Based in NY, the app democratized investment by being the first to offer commission-free transactions and conquered the Millennial generation with its easy-to-use “mobile first” platform that avoids much of the traditional Wall Street suffocation. The app even offers you a free stock to sign up. Many Americans opened a RobinHood account using the $1,200 stimulus sent by the U.S. government during the Covid crisis.
Currently valued at more than $11 billion, the startup’s first investors include rappers Snoop Dogg, Jay-z and Nas and actor Jared Leto. By the end of 2019, RobinHood announced that it already had more than 10 million users (in the U.S. alone).
RobinHood generates significant revenue from payments for the flow of orders, a common but controversial practice where a broker receives compensation and other benefits to direct orders to different parties for the execution of transactions.
An independent analysis suggests that payments for the order flow generated an estimated $69 million in revenue for Robinhood in 2018, up 227% from the previous year, and accounted for more than 40% of its overall revenue, according to a Bloomberg report.
Other sources of revenue include a $5 monthly fee for optional Robinhood Gold membership, which gives the customer access to loans and investment tools and purchase fees with the Robinhood card.
But this ease of buying shares also has many risks. Some users do not yet realize the risks associated with investing in the stock market and many complaints were filed last year against RobinHood for technical problems, which prevented some traders from making their offers, which caused them to lose a lot of money.
In June, Kearns, a 20-year-old trader, committed suicide after his RobinHood account mistakenly showed significant losses from the purchase of shares in companies through fairly complex transactions.
The ease of use must therefore be accompanied by serious precautions because investing in the stock market is not for everyone.
Public is an equity brokerage company based on a mobile application that does not charge commissions on transactions.
Public was founded in 2017 and recently announced a $15 million Series B funding round. Investors included Will Smith, NFL star J.J. Watt and Scott Galloway.
What differentiates Public from RobinHood is that the start-up offers the purchase of shares in fractions. By dividing actions into smaller units, Public makes them accessible to more people. Instead of paying by the share, you pay in dollars.
Public’s other advantage is its online investor community. Some of them are experts in the field, others individuals and sometimes you can meet stars and see what actions they own on Public.
It is also easy to create a group discussion with other users to talk strategy and exchange information to better “trade”.
This strategy can work because many market players accuse RobinHood of pushing users with no real knowledge to invest their money without really knowing what they are doing.
We have already written an article about Venmo, the startup bought by PayPal , which allows you to make payments between any individual using the mobile app. Venmo is one of the big winners of the pandemic, as it can be used by many professionals who previously only accepted cash payments or who do not wish to invest in machines for cash collection.
The CVS chain of stores has just announced that it will accept payments from Venmo. When arriving at the checkout, the customer will only have to scan a Qr Code which will send him to his Venmo account in order to pay the amount of the bill requested by the store.
No more physical contact and a real simplicity of installation.
During the second quarter, Venmo announced that it had increased the amount of payments made to a total of $37 billion by 52% compared to the previous year.
The #BLM movement
Black Lives Matter (BLM) is a political and social movement that advocates a form of non-violent civil disobedience to protest police brutality and racially motivated violence against blacks. The movement returned to the headlines and gained more international attention after the murder of George Floyd by a Minneapolis police officer. An estimated 15 to 26 million people participated in this year’s protests in the United States, making Black Lives Matter one of the largest movements in U.S. history.
New-York City was very concerned about the movement and these protests gave rise to several impulses in the city.
A movement of financial or human support during demonstrations by many companies and stores:
An artistic movement, which took over the protective barricades of some shops in Soho in particular to show the support of artists to the movement.
A movement in support of students and academia: at the entrance to the university buildings in NY, we can now see this plaque.
A community movement: some merchants clearly displaying to be “Black Owned Businesses” and Google is even now proposing to spot businesses run and created by African-Americans.
Politics and Trade
Tensions are rising between supporters of both sides ahead of the US presidential elections in November. Traditionally, this election is held on the 1st Tuesday of November, because it allowed rural people to come to the city to vote in the old days. Sometimes it took a day’s drive to get into town and you didn’t travel on Sunday, a day of prayer in the United States. Tuesday was therefore the preferred day.
It is a weekday and some have to take on their working time to go and vote or to volunteer at polling stations.
Many companies (such as Tory Burch) give their employees paid leave to work at the ballot box and vote. For example, Old Navy and Patagonia are participating in an initiative to recruit volunteers to their businesses to assist at polling stations in the face of a projected shortage of polling workers at the national level as a result of the current pandemic.
Apple has already announced that it is offering its employees 4 hours to vote. Coca Cola will give a day off to vote.
Time To Vote movement, launched in February, brings together more than 600 U.S. companies that will provide facilities for their employees to vote.
The move comes at a time when U.S. companies are facing increasing pressure to help increase voter turnout and demonstrate a deeper commitment to social responsibility. It will take more than 350,000 volunteers for these élections.
Other companies such as Patagonia (above) and H&M are using their advertising resources in Times Square to emphasize the importance of voting.
At Nordstrom Women, the shopping paradise for New Yorkers, the message is the same !
The NBA, which currently has a strong presence in the social and political sector, plans to open some of its locations to become polling stations in November.
Americans are bombarded with messages every day or almost encouraging them to register to vote.
Even Uber is getting on with it. Four years ago, the people transport start-up was already offering price reductions when your trip was used to vote.
It is interesting to note, however, that companies are calling for a vote because it is an important event in the life of the nation. But those who call to vote for a specific candidate always have to deal with backlash, as in this Hobby Lobby store, whose customers are calling for a boycott.
Article published on 6 October 2020 by
Echangeur US Retail Innovation Correspondent