Nov. 20, 2012
It’s no secret that consumers today are demanding, and that retailers must offer, a multi-channel experience to simply survive. But thriving—winning the loyalty game—is an infinitely more difficult task.
The rapid surge of mobile and tablet use provides an opportunity for retailers to thrive and accelerate beyond the competition. Empowered by their own mobile technology, consumers have shown they prefer using mobile solutions in the store. Using this preferred channel, retailers are turning to mobile Point-of-Sale (POS) to deliver the multi-channel shopping experience that consumers demand.
According to a recent article by Boston Retail Partners, Real-time Retailing Is the Key, retailers that have deployed mobile POS have not only increased transactions by 20 percent but also boosted their customer satisfaction rating to 82 percent. While only 7 percent of retailers currently use mobile POS, 52 percent plan to implement mobile POS within the next two years.
Put simply, mobile POS is a trend retailers cannot afford to ignore.
Key Opportunities for Retailers
The opportunities for mobile POS are far and wide, from impacting the checkout area to assisting consumers on the floor and empowering associates to provide better service. Retailers who have deployed mobile POS can experience a variety of benefits, notably capturing more sales, increasing store capacity and improving operations. Improving customer satisfaction and loyalty, however, is a critical benefit in the converged retailing, or c-tailing, world. Mobile interaction must feel like a seamless extension of all the other channels offered by the retailer.
The key takeaway for any retailer is that while the benefits of mobile POS can be significant, it is in no way a one-size-fits-all solution. In some cases, certain implementations of mobile POS could even work against you. For example, queue busting is a mobile POS application where an order is pre-scanned and suspended before finalizing at the traditional POS. However, it does not work well for every retailer. For retailers who rely on upselling at the checkout through promotions, warranties or impulse items, revenue can be lost with queue busting. Mobile POS must work in line with all aspects of your business, not sabotage your efforts to add revenue at the checkout.
The bottom line for retailers is that you must direct your mobile POS implementation in the areas that will have the biggest impact for your store and your consumers. Understanding the intricacies of your unique business challenges and opportunities is the first crucial step.
Top Three Challenges for Retailers
Once you determine the proper direction for your mobile POS implementation, you must then identify the challenges your store will face as a result. Let’s take a look at three of the most common challenges retailers encounter when deploying mobile POS.
#1: Security, security, security
Mobile POS units bring a new level of access to information for associates and consumers. Retailers must first consider how their mobile POS program will operate within the parameters of Payment Card Industry (PCI) Compliance, protection of personally identifiable information (PII) and loss prevention.
A mobile wireless network must be PCI compliant to protect transaction and consumer data. Also, when considering a user interface design, a retailer must remember that mobile POS breaks down the barriers present at a traditional POS counter. Safeguarding PII must be considered, as consumers may be able to view the screen held in the palm of the associates’ hands.
Retailers must define system management factors for safety. Issues like requiring employee authentication and restricting access to public sites and applications (apps) need to be considered. Does your device need to be retail hardened, or will a consumer device fit your needs? What, if any, tool will be used to manage in-store device inventory? What procedures or services will handle lost or stolen devices, particularly in regards to confidential customer data?
#2: The (practically) never-ending list of operational challenges
A retailer has many operational challenges to consider and overcome with mobile POS.
A retailer must consider questions around device sharing, the flow of the transaction, item handling, receipts and supplies.
The questions and challenges can add up and are unique for every retailer. Honing in on your primary challenges and strategizing realistic ways to manage the issues is a key step to ensuring your program’s success.
#3: Training and marketing complexities
Mobile POS may redirect your associates from tasks, like stocking shelves, and put them in direct contact with your consumers. The retailer must equip associates with the skills required to approach your consumers on the fly, as well as provide them with instruction for how to work with new technology and apps.
However, the training doesn’t stop with your team; your consumers will need to be trained as well. For example, if your shoppers are accustomed to front-end checkout and your mobile POS will move these transactions to the floor, you must educate shoppers to eliminate confusion. How, when and where you do so will be unique to each retailer.
Retail Segments That Can Benefit
Mobile POS has potential for practically any retail segment. As smartphone use surges, today’s shoppers often carry advanced mobile technology that gives them access to product and price information as they shop. With this in mind, associates on the floor should have even greater accessibility to full product details and store/warehouse inventory information.
While there are potential benefits for any retailer, some segments are better suited than others. Let’s take a look at where mobile POS shines.
For shoppers in a specialty retail store, this is not a routine visit. These shoppers have come for a more customized and enhanced consumer experience and a higher level of service. The act of clienteling, where retailers proactively nurture relationships with their customers so they are more likely to visit and buy from your store, also comes into play. Shoppers with discretionary income seek special treatment, rewards and loyalty programs personalized for them. Mobile POS shines in this environment because it better serves consumers looking for more information on high-ticket items. When an item is out of stock, it allows the associate to still close the sale. And, shoppers are served through a more personalized experience that encourages loyalty.
Mobile POS provides an opportunity in the general merchandise space to seamlessly link the in-store experience with online shopping. A key example is a department store where coordinating items can lead to larger purchases. If a shopper in a store is purchasing or browsing bedspreads, a matching set of curtains can be offered as well. Merging the in-store and online shopping experience can help boost sales and improve the consumer experience.
Grocery and food
With the rise of personal mobile apps, in-aisle scanning and mobile self-checkout are gaining popularity. Mobile POS may allow certain retailers in the grocery or food/deli segments to improve operations and boost loyalty.
With so many factors to consider and manage, the retailer needs to make sure their mobile POS solution is implemented correctly. This process requires an expert examination of your business issues to best define your mobile scenario.
Defining your mobile scenario gets back to the operational challenges and opportunities we’ve discussed. It’s unique to every retailer. But how do you get there?
A recent Retail Systems Research survey, Omni-Channel Benchmark Report 2012, noted that “retail winners” aren’t mastering channel convergence on their way—they are smart enough to ask for help. This separates the best from the rest, or “retail laggards”—those who are still struggling with store systems while their peers are moving on to capturing the consumer. Findings show that the majority of retail winners have a greater willingness to work with outside integration partners than in the past: 56 percent compared to only 25 percent in 2011.
The answer to mobile POS success lies in deciding to get help—and selecting the right technology partner to go on this journey with you. Choose wisely. You’ll need dedication, expertise and experience on your side.
Marcia Crosland is the Director of the Customer Experience Consulting team within NCR’s Global Consulting Group.