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Mobile POS and the end of waiting in line

The store of the future will not feature long check-out lines or any lines for that matter, according to retail experts and a recent survey from CompTIA predicting that traditional point-of-sale solutions will soon look archaic. Although only 13 percent of retailers polled said they're currently testing a mobile POS, another 19 percent said they will begin tests in the next 12 months. And that number will steadily climb over the next few years as retailers look for ways to provide customers with faster and better service, said John Kenney, SVP of business development for Stella Nova Technologies Inc.

"The entire experience of queuing-up and waiting in line is going to go from standard operating procedure to unacceptably bad customer experience overnight," Kenney said. "The retailers who aren't developing their plans now with a focus on mobility are going to find themselves hanging on to a tailpipe rather than setting out a well-thought through vision. It's tricky because mobile implementations are going to be radically different from retailer to retailer and vertical to vertical. That being said, every retailer is going to have to figure out what mobile transacting looks like in their environment. "

That's been pretty easy for Apple and Nordstrom, two early adapters of mobile POS, said Kenney, who pointed out that Apple employees' use of iPads for product info and checkout sets the bar high for mobility best practices.

"There is no argument that they have a seamless and well-thought through approach. When you walk through an Apple Store everything makes sense. Store operations, merchandising, and technology all complement one another in their environment," he said.

Unlike Apple, Nordstrom isn't necessarily an environment where mobility is a no-brainer, so it's interesting to see how quickly the retailer has implemented the technology. It has already armed 6,000 sales associates in 117 of its stores with modified iPod Touches. Each device has a merchandise scanner and a credit card slider to allow staff to check out customers from anywhere in the store.

"They've done a really good job on the Operational side," Kenney said. "You get the sense when you talk with store employees there that there is no question about the company's direction to use mobile POS. They clearly have everyone pointed in the same direction, and I'm guessing that's why they are seeing so much success with it."

Besides making shopping easier for customers, the mobile devices may have also contributed to an increase in Nordstrom sales, because while it reduces customer wait time, it also reduces the amount of time customers usually spend pondering purchases. The company's 2012 March sales report showed that "Preliminary quarter-to-date total retail sales of $1.73 billion increased 15.3 percent compared with total retail sales of $1.50 billion for the same period in fiscal 2011." Additionally, according to the 2011 Nordstrom Annual Report, "both the average selling price and the number of items sold increased in 2011 compared with 2010."

On the other hand, Kenney said, there are numerous examples of retailers who seem to be "dithering about with toe-in-the-water mobility 'testing.' They tend to look very similar because they have mixed adoption rates, disjointed mobile applications, and they seem to lack an enterprise vision around mobility."

Not so fast

Throwing together a mobile strategy too quickly, however, is just as bad as tiptoeing around implementation, said Tim Herbert, CompTIA vice president, who pointed out that adoption of any emerging solution must be accompanied by a broad-based technology strategy that addresses foundational needs.

"Reliable wireless connectivity, robust security, quality end-points, data back-up and other IT basics cannot be overlooked by retailers anxious to add new capabilities," he said.

That can be a problem for smaller retailers who lack proper IT departments to help them implement mobile technology correctly. In fact, about 99.7 percent of retailers are classified as small businesses, meaning they have fewer than 500 employees, according to U.S. Economic Census data. Many of those are even smaller, often having fewer than 25 employees. They should look into hiring outside help, Herbert said.

"Managed IT services, as the name suggests, is a model whereby an outside IT specialist manages some or all of customer's IT systems," Herbert said. "In the CompTIA research, retailers mentioned one of the greatest detriments of having technology shortcomings is that it pulls them away from working on other aspects of the business. Managed IT services is not for everyone, but in many cases, it does provide significant return on investment."

Photo: The Square Register turns an iPad into a mobile point of sale terminal for processing payments anywhere.

For more stories on this topic, visit the Retail research center.

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User Comments – Give us your opinion!
  • R B
    56380116
    It is great to see major retailers adopting mobile. SubtleData (www.subtledata.com) has been implemented by many companies that are looking to hook their traditional Point of Sale system to their mobile devices. Integrated mobile experiences can do great things to move the Point of Sale closer to the Point of Decision.
  • Sriram Subramanian
    56358654
    Thanks Cherryh, pretty good insights in this article. I've been following this space for a while now and I believe there are 2 other important dimensions:
    1. The mobile experience (product info, recommendations, checkout etc.) needs to be driven by consumers and not just the store staff. Also, when it comes to traction for smartphone apps, consumers would much rather have one app that they can use across stores that they frequent rather than download one app per retailer.
    2. As you correctly pointed out, small and mid-sized retailers don't want to build these mobile experiences themselves and are looking for ways to capture the attention of the mobile shopper. What they need is a simple self-service platform that they can plug their data into and offer a rich, analytics-driven consumer experience.

    We are starting to see some success in the mid-west with our in store mobile shopping platform for SMBs. I'd be happy to share more lessons/insights as we continue rolling out at different retailers and verticals.

    -Sriram
    sriram@fermyon.com
    twitter: @Fermyon
  • Philip Cohen
    56315872
    “[Nordstrom] has already armed 6,000 sales associates in 117 of its stores with modified iPod Touches. Each device has a merchandise scanner and a credit card slider to allow staff to check out customers from anywhere in the store.”

    So, instead of having staff at a checkout point, staff are going to be wandering around the store looking for customers to “check out” …

    Now, from a security point of view, please, explain to me again how this "mobile" operation is going to get customers through a secure point-of-sale checkout faster ...

    OK, department stores aren’t securely fenced as are some other retailers; but seriously, you can now never find staff in a department store anyway, so how is this going to make anything better, and what about the carry bag and the receipt …

    I definitely am missing something here …

    Well, at least they have not yet made my old bit of plastic obsolete …
  • Abraham Paul
    56308444
    Universal Money Management by phone http://wp.me/p1ZsI2-4g
  • Joe Ariganello
    55955571
    The idea of getting rid of long lines at popular retail stores with mobile POS is an interesting one. Successful examples from Apple and Nordstrom have set the bar for a new trend in the industry, but whether or not these strategies can be practiced by all industries will be interesting to see. Although risk comes when implementing any new mobile strategy, the upside can be great. And a new technology, such as this one, holds tremendous potential. http://bit.ly/HWhOoo
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