VARs Rethink Point of Sale
By Lisa Terry
Is the next generation POS system thin, mobile, and sporting a touchscreen?
You might think so if you roamed the aisles at the recent National Retail Federation BIG Show, replete with tablets of many brands, levels of ruggedness, and operating systems.
It’s POS’ turn in the spotlight again. A trend toward customer centricity combined with an explosion of mobile form factors have retailers of all sizes reconsidering what a POS system looks like and what functions it should serve. Visionaries paint pictures of associates working the aisles with tablets in tow, supported by an array of in-store technologies and customers’ own smart devices, all to create a productive, entertaining, and exceptional shopping experience. In restaurants, the scenario leverages digital signs, kiosks, smartphones, or sleek tablets for ordering, loyalty, and transactions.
And none of these solutions include a big, putty-colored box at the checkout counter.
POS Before and After
It’s time to fasten your seatbelts, because POS is entering an exciting era of innovation, and no one is quite sure what will appear when the dust settles.
“The credit processing and POS businesses have gotten into a mentality that our business is what it is and will never change,” says Henry Helgeson, co-CEO at Merchant Warehouse (merchantwarehouse.com), who predicts buyers will begin balking at solutions that cost upward of $5k. “But POS is a much more fluid market than it was five years ago.” The processor is working with several tablet POS companies to accommodate the differing needs of tablet-based processing. “This requires a lot of change on the part of VARs and developers. I think it will be a very challenging two to three years.”
Here are some of the changes:
Before: POS is a transaction engine
After: POS is the hub of the business
Retail today is all about customer centricity and customer loyalty. So in addition to processing transactions and tracking financials, POS is also the place where retailers and restaurateurs deepen their relationships with their clientele by collecting their demographic, purchase, and preference data while accessing centralized, real-time inventory and delivering increasingly personalized marketing messages through displays, e-mail, even social networks.
Before: POS is a big, retail-hardened box that sits on the counter
After: POS can be fixed, mobile, or even on the customer’s device
To deliver on the vision of a store visit that’s worth the trip, retailers will leverage a range of interconnected technologies. The checkout will persist, but will be complemented by kiosks, digital signage, shelf displays, associate-facing mobile devices, and customers’ own devices. Many will open the transaction, and a few will also close it.
Tablets are currently basking in the limelight. Already, Square (squareup.com) offers the free application Square Register that turns an iPad into a POS device, complete with receipt printer and cash register drivers; ShopKeep (www.shopkeep.com) has a similar offering.
Many manufacturers are showing or promising hardened, retail-friendly tablets. The big question is what operating system to run: Retail software-friendly Windows, or Android, or another OS from the smartphone world? Also: Can they match the iPad’s price point? And the ultimate question: Will tablets really fit into business processes?
Advanced Data Systems (www.ads-pos.com) general manager Jim Stewart is among those taking a cautious approach, aligning with vendors for mobile solutions but still leading with traditional POS.
“I’m fully geared for it, but I’m not demo’ing it,” Stewart says. “My customer is worried about making pizza, they don’t care about technology.”
Even fixed POS is getting a makeover. “You’ll see much sexier systems,” says John Nicewick, marketing director for TE Touch Solutions, a business of TE Connectivity (www.elotouch.com), which makes Elo TouchSystems products. Retailers “will look for hardware that complements the shopping experience.” Think attractive, with a glossy, dual display and creative mounting, as well as being touch-based, minimally invasive and easy to learn. And of course, preferably sub-$1k.
Before: POS lives at the store
After: POS functionality is broken up and run in different places
POS will always need a way to run locally if network connectivity is lost. But beyond that restriction, the software can really run anywhere. So retailers that want to run thin clients, or buy POS via a SaaS model, or share a transaction engine across e-commerce and brick and mortar, can now find software that acts accordingly.
Cross-channel integration, a major initiative among Tier 1 retailers, is also taking place among SMBs. “Several companies out there are writing to that,” says Jason Firment, POS solutions director for BlueStar (www.bluestarinc.com/pos). “You see stores integrating to e-commerce, so everything flows into inventory and you can see a live feed.”
Flexibility is one reason Retail Pro (www.retailpro.com) develops its software modularly, so it can run on a thin or thick client, local or hosted, and even integrate with third parties, such as drop-ship fulfillment partners. “It allows resellers to slice and dice functionality according to need,” even store to store, says Kevin Connor, director of product development for Retail Pro.
Before: Two-line customer displays and promotions on receipts
After: POS integrated with full in-lane displays, digital signage, kiosk, and
More elaborate customer-facing displays will come to SMBs, says TE Touch Solutions’ Nicewick, offering loyalty and upsell/cross-sell messaging. Meanwhile, SMB retailers will begin exploring digital signage featuring a web cam, touch, and gesturing for shelf-mounted displays. These tools offer customers access to remote product experts, allow customers to order an item to be held at the front counter, and eventually, enable automated, dynamic price adjustments according to inventory levels—as the supply dwindles, the price increases, for example. Solution providers and retailers “need to think holistically about the entire system,” says Nicewick. “SMBs will not win against large retailers by doing what they do.”
Before: Self-service POS is for big chains
After: Self-service POS is in all tiers in formats where it makes sense
Sure, some big chains have ripped out their self-service recently. But it’s all part of the process of the technology finding its rightful place in retail, where customers have come to expect it.
“We’ve seen our customers in the SMB space adopt self-checkout at a more rapid pace, especially in the last 12 months, particularly in grocery,” says Roger Hert, business development manager for ScanSource POS/Barcoding (www.scansource.com). “They realize to compete they have to invest.”
Next-Gen POS and Vendors
The morphing of POS is exciting—unless you’re the engineer who has to bet the business on creating a hardware or software design that will resonate with fickle customers 6–18 months from now. Tablets were clearly the big bet being made at NRF, but retail has flirted before with form factors that never took off as expected—netbook, anyone?
For software developers, the questions are many: How must the interface change? Does the device have adequate processing power and memory? Does it need full, or only partial POS functionality? Are there sufficient benefits to running natively on the operating system? And if native is the choice, which manufacturer’s flavor of that OS?
It takes a lot of resources for software developers to port their POS code to new operating systems and tap features available to native-run applications. Each POS developer must decide how to approach market demand to run on devices other than fat, fixed POS terminals. Strategies to avoid rewriting code include SOAP, HTML5, and terminal emulation.
But there are always trade-offs. Travis Young, CEO of onePOS (www.onepos.com), points out that web-based solutions require more processing power than native apps. “You can create super-efficient code,” he notes. “Java is not super-efficient but it runs on everything.” onePOS uses SOAP (Simple Object Access Protocol) and HTML5 for its development to run on any platform, though the company does have some Apple and Android apps. “Our long-term plan is, almost everything we do will be enabled via web SOAP calls.”
FuturePOS (web.futurepos.com) has written some functionality for Android, but is more likely to favor terminal services or web browsers to run on mobile. “We’re hedging our bets and covering all bases,” says John Giles, CEO and president, who sees mobile as supplementing, but not replacing, fixed POS.
Not every developer is plunging ahead just yet. “I was surprised to hear that several ISVs were taking a wait-and-see approach, letting the buzz die down” before making a move into new areas such as tablet POS, says Jeanne Aiken, director of merchandising for ScanSource POS/Barcoding.
Of course, it’s also important to remember that all technology is there to be leveraged according the individual business’ needs and problems—not the other way around, says Will Atkinson, president of CAP Software (www.capretail.com). Tablets will fit where they fit, and fail where they don’t.
As long as there has been retail technology, there have been advocates pushing new visions for new retail paradigms making use of the latest innovation. Not all catch on. Through the fads and the bonafide changes, though, the channel has a track record for adapting accordingly, and there is little reason to think that will change as POS undergoes its next transformation.
“The channel is still really healthy,” says BlueStar’s Firment. “The channel is cyclical. The consumer tablet world is scary, but people said the same thing with the Internet in the ‘90s. Technology changes every ten to 15 years that alters what and how we do things, but we can adapt.”
SIDEBAR: Question your Vendors
With the mobility buzz in retail and restaurant circles, solution providers must be prepared to answer questions about mobile devices’ potential role in the customer’s business—and use this as an opportunity to begin a broader discussion about how technology can help deliver on their brand mission.
“Solution providers need to ensure they make a strong case that shows SMB customers how to sustain and thrive in the market,” says Justin Scopaz, vice president and GM, Ingram Micro Data Capture/POS (www.ingrammicro.com). “Having the cheapest solution doesn’t mean the best investment. The consumer approach has completely changed within the last five years. If the customer doesn’t know how to interact with the consumer (social media, loyalty, etc.), it will directly impact the business long term.” Solution providers need to bundle solutions and present them in a way that helps them see the long-term benefit.
A key part of the preperation is knowing where vendor partners are taking their products. “Be involved at the granular level with your software providers—alpha and beta testing, commenting about what end users want to see. It’s a two-way conversation,” recommends BlueStar’s Firment. Additional questions for software partners:
“What is your plan for integrating next-generation merchant transaction types?” suggests Scott Henry, director, North American product marketing for VeriFone (www.verifone.com), citing near-field communications, EMV, Google Wallet and deal sites such as Groupon.
- What is your roadmap?
- What is your approach to mobile migration/integration, and what are the
- implications of this on form factor requirements?
- Are you using open platforms?
- Will this software keep up with device OS updates?
- Is the interface and flow uniform from one platform to another?