You’ve likely experienced an over-loaded or offline EFTPOS terminal, while stood at the till waiting to pay for your items. You’ve probably also had a terminal refuse to read the magnetic strip on your card, and you may even by now have opted for the self-service checkout in the supermarket, sure it will save you from the painful queue that’s backed up behind a flustered mother with three kids and a trolley stacked to the roof.
But things in the POS market are certainly changing and innovation is ironing out the niggling issues evident in this evolving technology. The advent of online retail and automated checkouts makes it perfectly acceptable for the customer to bypass face-to-face interaction at the POS, should they so choose. Are we encouraging anti-social purchasing behaviour? Could it be that in the not-so-distant future, customers will be making the majority of their purchases from behind the safety of electronic walls? In our latest Sales Toolbox, The Channel looks in to what these changes mean for resellers and system integrators in the POS market, what the buyer wants to achieve and how best margins can be achieved.
The changing POS climate
The point of sale is usually regarded as the aspect of purchase that increases customer intimacy and service, where a business can get a comprehensive overview of a customer. The idea of a POS application is growing substantially, as retailers are now interested in integrating more into the technology, such as installation, access, and supply chains, with the ability to get it all in one place, at one time, and in real time.
The growing online retail industry is one that can’t be ignored. For businesses to stay competitive in today’s climate, online retailing is crucial. "It’s ultimately about giving the customer choices and different experiences,” says Vern Hue, IDC Analyst.
Automated checkouts are having an impact. The convenience and time we save through use of self-service automated checkouts in supermarkets now far outweighs the personal touch that might come from a cashier.
Furthermore, there is now an increasing trend towards IP-based EFTPOS terminals that run over an Ethernet or wireless internet connection rather than conventional telephone lines. This is practical and attractive to retailers wanting to reduce their telecommunications costs.
According to Gartner, over the last two years the hype surrounding mobile POS solutions has experienced a revival in the retail market. Customers’ expectations are considered to be one of the driving forces behind this resurgence. A Gartner retail consumer survey (Retailers: Let customers guide your investment in mobile POS) revealed that, on average, customers cited faster check-outs as a top three customer service basic across all retail segments.
For those retailers looking to satisfy this customer demand, Mobile POS is a highly appealing option, helping to support faster throughput, consequently improving customer service in the store. This can be particularly helpful during peak trading times, such as the Christmas period.
Vern Hue believes that the rise of mobile hand-held devices is one of the most interesting and exciting trends in POS presently. "These hand-held devices act as portable terminals, enabling those in line to scan their items before reaching the checkout counter and paying before exiting the store. This saves both the customer and the attendant a lot of time and effort.”
Note Gartner’s recommendations for implementing mobile POS for retailers:
- Factor in cross-channel transaction processes, such as reserve online and checkout/pick up in the store.
- If investigating third-party mobile POS applications on devices such as the Apple iPhone, consider how that third-party mobile POS application will integrate with the main POS application running on the in-store fixed checkouts.
It’s all about the personal touch
The penetration of touchscreen technology and digital signage in the POS market is hard to ignore, particularly in verticals like hospitality. Julian Smith, General Manager, Business, at MYOB, estimates that more than 80% of businesses in the hospitality industry now use this technology.
Just recently, restaurants in U.S. city Chicago announced they would be adopting the use of Apple iPads as menus. Upscale eatery Chicago Cut steakhouse on the northern bank of the Chicago River has invested in 40 iPads at about US$700 each, for use when selecting wine. Since April last year, when Apple debuted the tablet in America, the device has been in use as a full menu at classy restaurants, hamburger eateries and quick-service chains.
While browsing the wine list, customers of Chicago Cut can now view the vineyard where their chosen wine originated, thanks to the creation a custom app that looks like a virtual wine cellar. It lists the restaurant’s 750 wines, includes photos of bottles on wooden shelves and allows for searches based on variety, price or region of origin.
Diners can also access information about a wine’s taste, composition and a Google map of the vineyard. Wine sales at the restaurant had shown a 20% increase per customer, which is testament to the novel, engaging new way to ‘virtually’ try before you buy.
"Keyboards and mice are not suitable for the wet and dusty environments of kitchens and bars,” says Smith. "In recent years, the price of this technology has dropped and many other types of retailers with limited counter space are also leaning towards all-in-one touchscreen terminals, as they have a smaller footprint than a conventional tower PC, plus a separate monitor.”
Minimising unsightly cables and hardware clutter on the countertop is undoubtedly a top selling point when pitching to a customer. Touchscreens and digital signage provide an innovative canvas through which to present product ranges and respective product information to the customer.
The future is automated
Five years ago, at a conference in the U.S, the founder of www.pets.com boldly stated that retail would not exist in five years time. Clearly not the case, Advance Retail’s Mark McGeachen believes there has been a lot of fear-mongering with the claims that retail, and subsequently traditional POS systems, were going to die out.
"Good retailers have the ability to mix bricks and mortar,” he says. "Buying something online but not being able to return it is a problem. We need to drive the convergence and integration, rather than one killing the other.”
All said and done, the rise of technologies such as online retail, automated checkouts and touch screens doesn’t mean the end of POS, merely a shift in the industry’s direction. "It’s still an evolving market,” says McGeachen. "There are a lot of deals happening at the moment, and fewer vendors means slower growth.”
"While online retail works for many situations, it lacks immediacy,” says MYOB’s Smith. "You can’t walk out of the store with the goods. A major challenge in the future will be for smaller, local retailers to compete with online discount retailers.”
The influence of these newer technologies reflects how customers are growing comfortable with automated information. If anything, a customer’s retail experience is now enhanced with the ability to inspect products online before going in to a store to purchase them.
The interaction that occurs at the point of sale is still the key for many, where the focus lies on the relationship between the retailer and the customer.