July 23, 2012
Retail Customer Experience: Go Mobile Or Go Home – Check-Out Lines Are Disappearing
Through a special arrangement, presented here for discussion is a summary of a current article from Retail Customer Experience, a daily news portal devoted to helping retailers differentiate the shopping experience.
Although only 13 percent of retailers are currently testing mobile POS, another 19 percent said they will begin tests in the next 12 months, according to a recent survey from CompTIA.
And that number will steadily climb over the next few years as retailers look for ways to provide customers with faster and better service, predicts 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," Mr. Kenney said. "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 Mr. Kenney, who pointed out that Apple employees’ use of iPads for product info and checkout sets the bar high for mobility best practices.
Nordstrom 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," Mr. 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."
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. For smaller retailers, managed IT services, whereby an outside IT specialist manages some or all of customer’s IT systems, are an option, according to Mr. Herbert.
[RetailWire editor’s note: JC Penney last week announced plans to eliminate traditional checkouts in favor of mobile payment devices by the end of 2013.]
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Discussion Questions
Discussion Questions: What do you see as the biggest drivers of mobile POS adoption? What are the biggest hurdles?
Poll
Just like any other new form-of-payment options, consumers will need to trust the mobile payment process as well as work their way through the logistics and mechanics of the process. Additionally, unlike credit cards, there will be no universal practice. Each retailer will have some variation of a mobile payment process which consumers will need to learn and accept.
Not unlike the acceptance curve of submitting your credit card information for online shopping, mobile payment will go through a similar acceptance curve. The speed of acceptance will be directly proportional to the speed at which consumers trust the process and security of their accounts.
Just as self-checkout didn’t completely replace POS in grocery stores, Mobile POS will augment traditional POS for non-food. I believe Mobile POS will eventually outnumber fixed POS, but complete replacements will be rare. Nevertheless, Mobile POS is here to stay and every retailer should be evaluating the technology.
Didn’t they say the same thing about “self-service” kiosks?
And to the note JCP will eliminate traditional checkouts — I can’t imagine how that will play out, like all the other shots across the bow — in the middle of the country where technology isn’t worshiped. Rule #1: Know your customer.
Technologists will better know better than I the barriers of adaptation for retailers. I can surmise from my experience that some supermarket retailers and their IT departments will have serious issues with elements of mobile payment with the potential of rivaling the the furor of “Y2K”.
From a marketing perspective, I see positive opportunities of retailers “branding” mobile payment as a much needed enhancement to many loyalty programs that are in need of a shot in the arm. It would be a mistake, in my opinion, of simply adding this new payment option without exploring how the retailer could put its own stamp on the process and at least attempt to differentiate from competitors that begin to offer similar services.
As with any technology enhancements, retailers will be motivated to adapt commensurate with the demand of the consumer, adaptation rates of their key competitors, and of course a thoughtful return on investment model.
It’s way too soon to declare victory here. Retailers are experimenting, but are still struggling with PCI status, design of the cashwrap, and loss prevention practices. Expect more years of waiting in line, unfortunately….
Mobile is likely to become a viable option as more retailers accept it and more shoppers embrace it. However, it would be a mistake for retailers to offer it as the only option for payment.
Self checkout did not completely replace traditional checkouts. Experience with banking and other models suggests that no one form of transaction fills all shopper needs. The key is to allow shoppers to transact in the manner they desire and with which they feel comfortable.
There are many flavors of mobile POS and retailers need to determine which blend will work best for its customers. Some of the possible scenarios include letting the consumer use their own device to complete the transaction; letting the consumer use a store scan device then their own device for mobile payment — or complete through the store’s payment system; or having roving store employees with mobile scanning/payment devices. All have advantages and challenges and will require some degree of process and technology change.
Checkout waits/long lines are consistently a top 3 complaint for in-store customers, so this is fertile ground. Mobile checkout via associates in higher touch models (i.e. Nordstrom, Apple) are interesting however, the real win win value proposition will be when it is consumers using their devices in higher turn segments like mass and grocery. This will push the labor cost lever as well as the consumer sat lever.
Mobile POS adoption, like other opportunities to invest in a better customer (and employee) experience such as loyalty, is a function of leadership and customer centricity. Equally important is that it’s also a great example of an initiative that has benefits from a marketing and operational standpoint.
Next time you have the chance, spend some time in a Nordstrom store where you can see, explicitly, how much better it makes the interaction between customers and salespeople. Mobile POS makes the transaction more relationship-oriented, faster and easier.
Financially, over the long-term there are numerous benefits which include less infrastructure and more square feet that can be devoted to merchandise (i.e., driving sales).
Interestingly for mission-critical IT, the mobile checkout market is expanding simultaneously within large and small retail. The drivers and hurdles of adoption differ between size of business.
At the large end, which includes Nordstrom and JCP, a big driver is long lines and the lost impulse sales. Imagine $3,000-5,000 of buyer’s remorse creeping in to an impatient checkout line. The major hurdle is integration with existing POS systems, but the majors like NCR and Verifone are now offering integrated products.
At the small end, which includes well over 10 million businesses with 20 or fewer employees, a big driver is the cost and inconvenience of installing clunky registers and terminals without an IT staff. Managed POS is appealing to them, especially when it’s intuitive. A smartphone plug-in device like Square is fun and easy training for “digital native” staffers.
Mobile POS is still in the early adopter stage. But nothing talks like money. The individual providers are claiming double digit increases in sales, even if the penetration is uneven.
The biggest driver is obviously technology. Any shopper will tell you the least enjoyable part of any shopping experience is checkout. The ability to eliminate the hassle using technology is fantastic and it doesn’t require an invasion of my privacy. I recently visited a coffee shop where the menu was presented on a iPad and a selection was made on the iPad. When the coffee was delivered my credit card was scanned on the iPad. I would venture to guess that this entire process could also be accomplished on an iPhone. Now include the scanner reader App and you can easily take this to retail, check out a customer and send the receipt to the customers phone via Bluetooth or computer via email and the deal is done. The only problem now is for retail to get the scanned price to agree with the advertised price. This seems to be a feat few retailers have mastered!
Why could this not work in grocery?! There is a very strong willingness of shoppers to embrace mobile POS in those stores that are employing it. I see very little overall resistance. I can imaging the “express” order shoppers in the supermarket with hand baskets and a couple clerks roaming the front of the store looking for shoppers to check out. I see no real obstacles. No reason for delayed deployment across all retail formats.
Bob Phibbs hit the nail on the head: know your customer.
Rarely is a single solution the panacea. Checkout lanes still exist today despite the ease of self checkouts. In many places there is a full time associate assigned to assist those using self checkout to overcome problems which may arise.
Mobile POS is simply another option to traditional checkout which will be readily adopted by some customers and rejected by others.
To unilateral decide that the customers will adapt and adopt the new technology without first gauging customer acceptance in an empirical way isn’t wise.
The benefits of mobile POS is that it brings another option to your customer base without excluding existing customers who prefer traditional checkout experience, and keeps you relevant to the changing nature of brick and mortar retailing.
The biggest driver of mobile POS adoption is the influx and availability of mobile devices and smartphones. Such a large percentage of consumers have these devices, it is in the best interest of retailers to take advantage of this technology. The ability to eliminate a checkout or register (such as Nordstrom has accomplished) should make the in-store experience faster and easier for consumers. I believe this will spread to other verticals over time and will change the in-store experience for the better.
This is a great concept, but requires a large investment in equipment. For some retailers it might make sense. However, for the majority of retailers, it is simply an expensive technology. Customer service isn’t built upon giving people a tablet when a cell phone will do. Instead, it is built upon driving business through anticipating customers needs and exceeding these before the customer realizes that they even have these needs!
I strongly agree with the statement: “The entire experience of queuing-up and waiting in line is going to go from standard operating procedure to unacceptably bad customer experience overnight.” The modality of this is only hinted at by the Nordstrom/Apple checkout procedure. What is coming is an Apple/Google/other mobile “VISA.” I doubt that the existing Visa will be in the lead on this — more likely a technology company, and a smart phone supplier like Apple is in the pole position on something like this.
That is, ALL of your credit cards will get replaced by your ONE smartphone, and this becomes your new “Visa/Mastercard/AMEX” or what have you. That takes care of the payment function of the three crucial functions of retail.
Another important functionality of the smart phone credit card is the ability to assist the shopper by actively SELLING them on what they want to buy. This is the meeting of the minds component, the single most important part of every single retail transaction. Wait until some real salesmen get involved with this, rather than a bunch of techies and self-service retail order takers!
The third component of retail, the delivery of the goods or services, we have already discussed extensively on RW — Amazon same-day-delivery, drop-off-points, cum bricks stores, etc.
But look for a single source mobile “credit card,” coming soon to retailing, globally.
This strikes me as a solution in search of a problem: long lines are caused by an imbalance of customers to associates, and I don’t see how having the latter carry the registers with them helps anything; in fact, since an oft heard complaint is that they can’t be found when needed; not having them at a central location is likely to make this problem even worse. And what about the customer who wants a bag … is a supply cart wheeled around with the iPad?
No shopper likes the checkout queue. For that reason alone, mobile POS will likely receive a favorable reception by shoppers at specialty retailers and department stores. But that doesn’t mean the same tech will work equally as well at c-stores, drug stores, grocery retailers and home improvement chains.
At a minimum, all merchants should monitor mobile POS tech and adoption, and they should begin exploring if and how that tech will work for their stores. The caution flag here isn’t only ensuring all the retailer’s tech needs align, but also how the tech aligns with the desired shopping experience.
How will mobile POS fit into the big-box store where the checkout process is, for good reason, normally located at the front end? How will the tech work in a small c-store that’s dense with small items, a small staff and a large number of convenience-minded shoppers with small patience? In the big-box case, perhaps mobile POS finds a home in certain departments, if the merchant can also address any potential product theft issues. In the c-store’s case, it may be that any potential mobile POS funds may be better spent on hiring a new associate. In either case, creative thinking is needed.
It’s not acceptable to wait until after mobile POS tech is adopted to work out the shopping experience, nor is it acceptable to slow down adoption while the shopping experience is pondered. Rather, a parallel track is needed to ensure that in the retailer’s eagerness to improve the shopping experience, the shopping experience doesn’t get forgotten.
I’ll agree with David, Bob, and company that Mobile POS shouldn’t and likely won’t completely replace dedicated POS/Cash Wrap terminals in most retail environments.
Mobile POS has some fundamental flaws. Don Norman, David Maister’s and others have published extensively on the psychology of waiting in line. A critical tenant, is that shoppers want to feel they are be treated fairly. When the only way to pay is via a mobile POS wielding employee, and that employee doesn’t have an apparent means of serving customers in the proper (fair) order, you have a bad experience. You can see this daily in Apple stores.
It’s also unlikely any shopper wants to stand in store with an employee to square footage ratio of 1 to 1000 (grocery, home improvement, etc…) and hope to find an employee that will check them out.
There are still many retail segments that do a significant portion of their revenue in cash. That being said, I do think Mobile POS is going to very quickly become the primary (rather than secondary) payment point for many retail segments. Visit almost any high service environment that has tested mobile POS as a supplement to cash wrap and you’ll notice two things: 1. Sales associates grab the mobile POS before they take the customer to cash wrap; and 2. The next stores that a retailer has the opportunity to design from the ground up are less cash-wrap centric than previous stores.
Instead of designing stores with enough checkout terminals to support their peak volume, they design them only with capacity to support avg volume. Instead of designing shopping experiences to end with a face to face employee interaction, they design them to end with a shoulder to shoulder interaction. Mobile POS does fundamentally improve most retail segments, and as a result, static cash-wraps are getting demoted to serve secondary edge cases.
Although the POS industry has incrementally improved their solutions every year, they have struggled to deliver an ROI that caused retailers to upgrade, which is why the majority of retail in the US runs on 10-20 year old POS solutions. Mobile POS is the first POS innovation that is truly driving an industry wide upgrade cycle at retail.
For certain categories like electronics and fashion, mobile POS makes a lot of sense. For mass merchandise/food where you need a bagging station, traditional retail checkout is still going to be needed. From a hurdle perspective, data security like PCI compliance, durability of the equipment, and having a robust wireless infrastructure with high availability will be key to success.
It’s not the technical points I worry about, but the loss of a company’s personal interaction with customer that’s the biggest aspect of the store experience lost through mobile POS. That magic moment when the register clerk gives you an authentic hello, asks you if you’ve found everything you were looking for, and suggests the perfect accompaniment for what you’re buying, that’s lost. The question is, what will bring more customers back; fast, efficient technology, or a warm, human interaction? We’ll see.
Mobile POS is a rapidly escalating segment of checkout options for many retailers. There is a requirement of a comprehensive technology solution that maps to the retailer’s or brand’s DNA and intended shopping experience. Like any technology, mobile POS is not a silver bullet, but rather a growing part of a range of checkout solutions which should always be designed around the intended customer experience.
There is certainly a great opportunity and growth in the mobile POS market. However, as mentioned by others, it is way too early to declare such a complete victory in replacing all lanes. Like has been mentioned, mobile is likely to follow an adoption pattern similar to self-checkout, replacing some but not all POS lanes.
In reality total mobilization of checkout will not happen for a couple of fundamental reasons, including:
1. Some shoppers still desire to use cash for transactions. Sure, the percentage is decreasing, however cash will remain an important tender for the foreseeable future.
2. Mobile is more practical with few items purchased. The Apple Store is a perfect environment, where most customers are buying 1-3 items, and in most cases don’t need a bag to carry them out.
On a related note, there is a huge opportunity for mobile payment, an opportunity that is still in its infancy. With the right solution approach mobile payment should have a higher growth rate that mobile POS.
The biggest drivers of mobile POS are the increases in total revenue at peak periods, by reducing the number of customers who abandon or decrease their transactions because of excessive wait time. Every associate becomes a cash register, and the improvement in customer service, at least in the Apple model, is not subtle.
The biggest hurdle is old-fashioned thinking — that customers need to be “funneled” through an impulse shopping area in order to maximize transaction value. What those old-time retailers miss is that the transaction value may rise, but so does frustration, decreasing annual and lifetime value.
The biggest drivers of mobile POS adoption are consumers’ familiarity with online and mobile commerce. And as the article mentions, once consumers have experienced and become comfortable with anywhere-in-store checkout (at retailers like Apple and Nordstrom), they will begin to expect/appreciate the convenience elsewhere. As for hurdles, they’re the same as they’ve always been for online/mobile transactions: reliable connectivity and security.
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Just like any other new form-of-payment options, consumers will need to trust the mobile payment process as well as work their way through the logistics and mechanics of the process. Additionally, unlike credit cards, there will be no universal practice. Each retailer will have some variation of a mobile payment process which consumers will need to learn and accept.
Not unlike the acceptance curve of submitting your credit card information for online shopping, mobile payment will go through a similar acceptance curve. The speed of acceptance will be directly proportional to the speed at which consumers trust the process and security of their accounts.
Just as self-checkout didn’t completely replace POS in grocery stores, Mobile POS will augment traditional POS for non-food. I believe Mobile POS will eventually outnumber fixed POS, but complete replacements will be rare. Nevertheless, Mobile POS is here to stay and every retailer should be evaluating the technology.
Didn’t they say the same thing about “self-service” kiosks?
And to the note JCP will eliminate traditional checkouts — I can’t imagine how that will play out, like all the other shots across the bow — in the middle of the country where technology isn’t worshiped. Rule #1: Know your customer.
Technologists will better know better than I the barriers of adaptation for retailers. I can surmise from my experience that some supermarket retailers and their IT departments will have serious issues with elements of mobile payment with the potential of rivaling the the furor of “Y2K”.
From a marketing perspective, I see positive opportunities of retailers “branding” mobile payment as a much needed enhancement to many loyalty programs that are in need of a shot in the arm. It would be a mistake, in my opinion, of simply adding this new payment option without exploring how the retailer could put its own stamp on the process and at least attempt to differentiate from competitors that begin to offer similar services.
As with any technology enhancements, retailers will be motivated to adapt commensurate with the demand of the consumer, adaptation rates of their key competitors, and of course a thoughtful return on investment model.
It’s way too soon to declare victory here. Retailers are experimenting, but are still struggling with PCI status, design of the cashwrap, and loss prevention practices. Expect more years of waiting in line, unfortunately….
Mobile is likely to become a viable option as more retailers accept it and more shoppers embrace it. However, it would be a mistake for retailers to offer it as the only option for payment.
Self checkout did not completely replace traditional checkouts. Experience with banking and other models suggests that no one form of transaction fills all shopper needs. The key is to allow shoppers to transact in the manner they desire and with which they feel comfortable.
There are many flavors of mobile POS and retailers need to determine which blend will work best for its customers. Some of the possible scenarios include letting the consumer use their own device to complete the transaction; letting the consumer use a store scan device then their own device for mobile payment — or complete through the store’s payment system; or having roving store employees with mobile scanning/payment devices. All have advantages and challenges and will require some degree of process and technology change.
Checkout waits/long lines are consistently a top 3 complaint for in-store customers, so this is fertile ground. Mobile checkout via associates in higher touch models (i.e. Nordstrom, Apple) are interesting however, the real win win value proposition will be when it is consumers using their devices in higher turn segments like mass and grocery. This will push the labor cost lever as well as the consumer sat lever.
Mobile POS adoption, like other opportunities to invest in a better customer (and employee) experience such as loyalty, is a function of leadership and customer centricity. Equally important is that it’s also a great example of an initiative that has benefits from a marketing and operational standpoint.
Next time you have the chance, spend some time in a Nordstrom store where you can see, explicitly, how much better it makes the interaction between customers and salespeople. Mobile POS makes the transaction more relationship-oriented, faster and easier.
Financially, over the long-term there are numerous benefits which include less infrastructure and more square feet that can be devoted to merchandise (i.e., driving sales).
Interestingly for mission-critical IT, the mobile checkout market is expanding simultaneously within large and small retail. The drivers and hurdles of adoption differ between size of business.
At the large end, which includes Nordstrom and JCP, a big driver is long lines and the lost impulse sales. Imagine $3,000-5,000 of buyer’s remorse creeping in to an impatient checkout line. The major hurdle is integration with existing POS systems, but the majors like NCR and Verifone are now offering integrated products.
At the small end, which includes well over 10 million businesses with 20 or fewer employees, a big driver is the cost and inconvenience of installing clunky registers and terminals without an IT staff. Managed POS is appealing to them, especially when it’s intuitive. A smartphone plug-in device like Square is fun and easy training for “digital native” staffers.
Mobile POS is still in the early adopter stage. But nothing talks like money. The individual providers are claiming double digit increases in sales, even if the penetration is uneven.
The biggest driver is obviously technology. Any shopper will tell you the least enjoyable part of any shopping experience is checkout. The ability to eliminate the hassle using technology is fantastic and it doesn’t require an invasion of my privacy. I recently visited a coffee shop where the menu was presented on a iPad and a selection was made on the iPad. When the coffee was delivered my credit card was scanned on the iPad. I would venture to guess that this entire process could also be accomplished on an iPhone. Now include the scanner reader App and you can easily take this to retail, check out a customer and send the receipt to the customers phone via Bluetooth or computer via email and the deal is done. The only problem now is for retail to get the scanned price to agree with the advertised price. This seems to be a feat few retailers have mastered!
Why could this not work in grocery?! There is a very strong willingness of shoppers to embrace mobile POS in those stores that are employing it. I see very little overall resistance. I can imaging the “express” order shoppers in the supermarket with hand baskets and a couple clerks roaming the front of the store looking for shoppers to check out. I see no real obstacles. No reason for delayed deployment across all retail formats.
Bob Phibbs hit the nail on the head: know your customer.
Rarely is a single solution the panacea. Checkout lanes still exist today despite the ease of self checkouts. In many places there is a full time associate assigned to assist those using self checkout to overcome problems which may arise.
Mobile POS is simply another option to traditional checkout which will be readily adopted by some customers and rejected by others.
To unilateral decide that the customers will adapt and adopt the new technology without first gauging customer acceptance in an empirical way isn’t wise.
The benefits of mobile POS is that it brings another option to your customer base without excluding existing customers who prefer traditional checkout experience, and keeps you relevant to the changing nature of brick and mortar retailing.
The biggest driver of mobile POS adoption is the influx and availability of mobile devices and smartphones. Such a large percentage of consumers have these devices, it is in the best interest of retailers to take advantage of this technology. The ability to eliminate a checkout or register (such as Nordstrom has accomplished) should make the in-store experience faster and easier for consumers. I believe this will spread to other verticals over time and will change the in-store experience for the better.
This is a great concept, but requires a large investment in equipment. For some retailers it might make sense. However, for the majority of retailers, it is simply an expensive technology. Customer service isn’t built upon giving people a tablet when a cell phone will do. Instead, it is built upon driving business through anticipating customers needs and exceeding these before the customer realizes that they even have these needs!
I strongly agree with the statement: “The entire experience of queuing-up and waiting in line is going to go from standard operating procedure to unacceptably bad customer experience overnight.” The modality of this is only hinted at by the Nordstrom/Apple checkout procedure. What is coming is an Apple/Google/other mobile “VISA.” I doubt that the existing Visa will be in the lead on this — more likely a technology company, and a smart phone supplier like Apple is in the pole position on something like this.
That is, ALL of your credit cards will get replaced by your ONE smartphone, and this becomes your new “Visa/Mastercard/AMEX” or what have you. That takes care of the payment function of the three crucial functions of retail.
Another important functionality of the smart phone credit card is the ability to assist the shopper by actively SELLING them on what they want to buy. This is the meeting of the minds component, the single most important part of every single retail transaction. Wait until some real salesmen get involved with this, rather than a bunch of techies and self-service retail order takers!
The third component of retail, the delivery of the goods or services, we have already discussed extensively on RW — Amazon same-day-delivery, drop-off-points, cum bricks stores, etc.
But look for a single source mobile “credit card,” coming soon to retailing, globally.
This strikes me as a solution in search of a problem: long lines are caused by an imbalance of customers to associates, and I don’t see how having the latter carry the registers with them helps anything; in fact, since an oft heard complaint is that they can’t be found when needed; not having them at a central location is likely to make this problem even worse. And what about the customer who wants a bag … is a supply cart wheeled around with the iPad?
No shopper likes the checkout queue. For that reason alone, mobile POS will likely receive a favorable reception by shoppers at specialty retailers and department stores. But that doesn’t mean the same tech will work equally as well at c-stores, drug stores, grocery retailers and home improvement chains.
At a minimum, all merchants should monitor mobile POS tech and adoption, and they should begin exploring if and how that tech will work for their stores. The caution flag here isn’t only ensuring all the retailer’s tech needs align, but also how the tech aligns with the desired shopping experience.
How will mobile POS fit into the big-box store where the checkout process is, for good reason, normally located at the front end? How will the tech work in a small c-store that’s dense with small items, a small staff and a large number of convenience-minded shoppers with small patience? In the big-box case, perhaps mobile POS finds a home in certain departments, if the merchant can also address any potential product theft issues. In the c-store’s case, it may be that any potential mobile POS funds may be better spent on hiring a new associate. In either case, creative thinking is needed.
It’s not acceptable to wait until after mobile POS tech is adopted to work out the shopping experience, nor is it acceptable to slow down adoption while the shopping experience is pondered. Rather, a parallel track is needed to ensure that in the retailer’s eagerness to improve the shopping experience, the shopping experience doesn’t get forgotten.
I’ll agree with David, Bob, and company that Mobile POS shouldn’t and likely won’t completely replace dedicated POS/Cash Wrap terminals in most retail environments.
Mobile POS has some fundamental flaws. Don Norman, David Maister’s and others have published extensively on the psychology of waiting in line. A critical tenant, is that shoppers want to feel they are be treated fairly. When the only way to pay is via a mobile POS wielding employee, and that employee doesn’t have an apparent means of serving customers in the proper (fair) order, you have a bad experience. You can see this daily in Apple stores.
It’s also unlikely any shopper wants to stand in store with an employee to square footage ratio of 1 to 1000 (grocery, home improvement, etc…) and hope to find an employee that will check them out.
There are still many retail segments that do a significant portion of their revenue in cash. That being said, I do think Mobile POS is going to very quickly become the primary (rather than secondary) payment point for many retail segments. Visit almost any high service environment that has tested mobile POS as a supplement to cash wrap and you’ll notice two things: 1. Sales associates grab the mobile POS before they take the customer to cash wrap; and 2. The next stores that a retailer has the opportunity to design from the ground up are less cash-wrap centric than previous stores.
Instead of designing stores with enough checkout terminals to support their peak volume, they design them only with capacity to support avg volume. Instead of designing shopping experiences to end with a face to face employee interaction, they design them to end with a shoulder to shoulder interaction. Mobile POS does fundamentally improve most retail segments, and as a result, static cash-wraps are getting demoted to serve secondary edge cases.
Although the POS industry has incrementally improved their solutions every year, they have struggled to deliver an ROI that caused retailers to upgrade, which is why the majority of retail in the US runs on 10-20 year old POS solutions. Mobile POS is the first POS innovation that is truly driving an industry wide upgrade cycle at retail.
For certain categories like electronics and fashion, mobile POS makes a lot of sense. For mass merchandise/food where you need a bagging station, traditional retail checkout is still going to be needed. From a hurdle perspective, data security like PCI compliance, durability of the equipment, and having a robust wireless infrastructure with high availability will be key to success.
It’s not the technical points I worry about, but the loss of a company’s personal interaction with customer that’s the biggest aspect of the store experience lost through mobile POS. That magic moment when the register clerk gives you an authentic hello, asks you if you’ve found everything you were looking for, and suggests the perfect accompaniment for what you’re buying, that’s lost. The question is, what will bring more customers back; fast, efficient technology, or a warm, human interaction? We’ll see.
Mobile POS is a rapidly escalating segment of checkout options for many retailers. There is a requirement of a comprehensive technology solution that maps to the retailer’s or brand’s DNA and intended shopping experience. Like any technology, mobile POS is not a silver bullet, but rather a growing part of a range of checkout solutions which should always be designed around the intended customer experience.
There is certainly a great opportunity and growth in the mobile POS market. However, as mentioned by others, it is way too early to declare such a complete victory in replacing all lanes. Like has been mentioned, mobile is likely to follow an adoption pattern similar to self-checkout, replacing some but not all POS lanes.
In reality total mobilization of checkout will not happen for a couple of fundamental reasons, including:
1. Some shoppers still desire to use cash for transactions. Sure, the percentage is decreasing, however cash will remain an important tender for the foreseeable future.
2. Mobile is more practical with few items purchased. The Apple Store is a perfect environment, where most customers are buying 1-3 items, and in most cases don’t need a bag to carry them out.
On a related note, there is a huge opportunity for mobile payment, an opportunity that is still in its infancy. With the right solution approach mobile payment should have a higher growth rate that mobile POS.
The biggest drivers of mobile POS are the increases in total revenue at peak periods, by reducing the number of customers who abandon or decrease their transactions because of excessive wait time. Every associate becomes a cash register, and the improvement in customer service, at least in the Apple model, is not subtle.
The biggest hurdle is old-fashioned thinking — that customers need to be “funneled” through an impulse shopping area in order to maximize transaction value. What those old-time retailers miss is that the transaction value may rise, but so does frustration, decreasing annual and lifetime value.
The biggest drivers of mobile POS adoption are consumers’ familiarity with online and mobile commerce. And as the article mentions, once consumers have experienced and become comfortable with anywhere-in-store checkout (at retailers like Apple and Nordstrom), they will begin to expect/appreciate the convenience elsewhere. As for hurdles, they’re the same as they’ve always been for online/mobile transactions: reliable connectivity and security.