Forget the excitement of biometrics at the counter, for the near future at least it’s self-checkout and mobile point of sale that hold the most promise for New Zealand POS and accounting resellers.
Louise Francis, IDC New Zealand senior market analyst, says with the retail market still subdued by the worldwide financial battering of the past few years, 2011 saw New Zealand retailers taking a cautious approach to POS, and that’s a trend likely to continue for the immediate future.
"New Zealand retailers have been implementing new POS systems to support store expansion plans or to consolidate and replace legacy systems that can no longer cope with multiple channels, or as a result of store merger and acquisition activity,” Francis says. She cites the example of fuel retailer Z, which has invested $10 million in POS.
Rather than chucking out an entire system and starting again, retailers are looking at upgrades or enhancements and maintenance of existing POS systems. Top objectives cited for implementing POS/accounting systems at the moment included increasing customer loyalty, reducing costs, increasing customer insight and improving the customer shopping experience.
IDC estimates POS hardware and software spend, excluding cash registers, throughout Asia Pacific, was US$8880 million in 2011. Almost 60% of store systems budgets – which includes digital signage, loss prevention systems, order management, payment systems and retail specific mobile devices – is dedicated to POS with between five and six per cent of total IT spend, covering software, hardware and IT services, dedicated to POS technology.
While no New Zealand specific figures are available for POS’ market value in New Zealand, Francis estimates it to be around $14 million to $16 million per annum for POS hardware and software.
She says recent times have seen growth of self-checkouts, a move away from end-to-end solutions, favouring instead a best of breed approach, and the growth of POS centralisation. Modern POS systems are also now more than a transactional tool, exchanging customer data for demand intelligence, merchandising, promo, price and CRM/loyalty management processes.
Francis says spending in the New Zealand retail market is estimated to have grown by 1.2% in 2011, and growth of 2.2% is forecast for 2012. "It will not be until 2013 that IDC expects a recovery to pre-financial crisis growth rates,” she adds.
But despite a less than hugely optimistic outlook, there will still be growth opportunities in point of sale and accounting.
Francis says new POS investments will mostly occur in new technologies, with mobile point of sale and self-checkouts presenting the greatest opportunities, as retailers seek to support modernisation of merchandise management processes.
She says mobile POS will continue to be in greater demand as it reduces checkout time, delivers a perception of better customer service, enables cross-selling on the shop floor, captures customer feedback and allows for quick inventory checks.
"Even now we see things like someone going to buy a television and a store manager being able to check inventory on the floor and do the checkout on the floor rather than having to go to the counter. It reduces checkout time and provides a perception of better customer service,” Francis says.
"Customers are used to using mobile tools and they expect the same of shop staff, and they don’t expect staff to have to go away anymore.”
She says mobile apps, including ones which allow stores to send a coupon to a customer as they enter a store, will also become increasingly popular.
Last year Motorola reported rapid rises in the number of imaging scanners – which read phones – being sold internationally, as retailers begin implementing mobile bar code applications. Top of Motorola’s list, according to Point of Sale News, were expected to be mobile coupons which Motorola expected to be ‘really prevalent’ in 2012.
Loyalty cards, mobile gift cards and games and contests also made the list.
Mobile is also the name of the game when it comes to accounting, with Catie Cotcher, Reckon New Zealand general manager, noting that New Zealand businesses increasingly want to be able to have an overview of the business while out on the road, and also want staff to be able to send invoices while out on the road.
Cotcher says changes in the economy have prompted business owners to keep an increasingly close eye on their business. "They want to be a lot more on the pulse and know how things are trending out and so forth.”
Francis says other significant areas of investment linked to POS either directly or indirectly in 2012 are expected to be self-checkout/self-scanning systems, integration of POS with marketing, promotion management applications and loss prevention systems.
Francis says resellers need to push the productivity message, as this will be critical over the next year. "Retail organisations are under huge pressure to drive down costs and improve efficiencies, and productivity-related spending on ICT will continue to be the biggest opportunity for vendors selling into the retail/wholesale sector,” she says.
"POS solutions need to be easily integrated with existing systems, fast to implement, inexpensive, modular and future-proofed.”
Francis says one of the biggest complaints IDC hears about vendors and resellers is ‘a lack of industry knowledge’. "Resellers must realise that new investment will mostly occur in new-to-market technologies, like mobile POS and self-checkouts, that enhance the shopping experience for customers, rather than replacement technology.
"Most of the POS investment in 2012 will be around selective upgrades or maintenance, at least until 2013,” she adds. And when it comes to selecting POS, she says selecting a vendor best in class, retail industry expertise and price are the most important factors for New Zealand retailers.
Meanwhile, Cotcher says resellers need to be across all the different options now available in accounting. "There’s so much variety there to produce a solution that will best fit your client’s needs.”
She advocates resellers selling to retail or trades attending workshops or conferences for the respective trades to get a better understanding of what the customer needs. "The more you know, the more of a business solution you can provide.”
And as for the long touted biometrics?
Francis says biometrics for payments ‘is probably a long way off’ with several international trials in the financial sector ‘dying at birth’. "Issues such as security and privacy are still a big concern,” Francis says.
However, she says there may be a role in POS workforce management, eliminating the need for password/logon-ids, badges and so forth to log into checkouts