Mobile POS and the end of waiting in line

July 5, 2012

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.

Topics: Mobile Apps , POS , Retail , Trends / Statistics

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