When word leaked out late last year that Old Navy was piloting a mobile point of sale (POS) system, consumers were excited. At the National Retail Federation’s annual conference, other major retailers such as Target and Walgreens also announced mobile POS initiatives. Clearly, this technology is going mainstream.
Consumers find it very attractive to be able to get information about products and their in-store availability, and then to complete sales transactions on the shop floor as opposed to lining up at cash registers. With the immense popularity of handheld mobile devices, it seems the next logical step for retailers is to incorporate the latest mobile technology into the shopping experience in order to improve customer service and eliminate traffic bottlenecks in stores.
Given the size of the store chains announcing such moves, however, smaller retailers might think that the latest in retail technology is strictly for big-box retailers and brand name chains that have millions of dollars to spend on custom development of mobile POS systems. Not so.
What is mobile POS?
There is a range of mobile tools enable payments, and solutions are available to everyone from the kid who cuts your lawn all the way up to the big chains. But mobile POS is about much more than just payment processing.
Mobile payment processing tools alone do not offer barcode scanning, nor do they tie into business workflows. Retailers require more functionality than just the ability to swipe credit cards.
Retailers are evaluating and adopting systems that use either retailer-owned, associate operated or consumer-owned-and-operated handheld devices, based on their individual needs.
An effective retailer-owned system must integrate with a range of other business systems, including customer relationship management software, accounting software, marketing platforms and other parts of the retailer’s backend system in addition to facilitating product lookup, loyalty program lookup and pricing lookup.
When the consumer’s device is used, the onus is on providing self-driven options and specialty applications that facilitate product lookup, price comparisons and access to payment options and promotions.
This first approach is the one garnering the most attention from retailers, with technology analyst firm the Aberdeen Group, in its December 2010 report “Retailers target POS mobility for engagement, interactivity, and revenue,” reporting that three-quarters of the retailers surveyed planned on developing a retailer-owned handheld device system as opposed to one that uses consumer-owned devices. The gulf is not wide however, and both approaches are being widely adopted.
How to select the right system for your business
Here are some important considerations for retailers looking to adopt a mobile POS system.
Cost: This is often the key determinant for many businesses. Until recently, retailers looking to deploy mobile POS were limited to expensive custom application development. Now there are systems on the market that offer attractive functionality at an affordable price. Cost should no longer be a barrier to adoption.
System elements: A mobile POS system will consist of hardware and a software feature set that must integrate into your backend system for non-sales processes. If the mobile POS you’re considering does not tie into inventory management, reporting, costing and purchasing or play nicely with your accounting and marketing platforms – don’t choose it. It will only introduce problems into your business rather than streamline processes.
Security: There’s a fear that mobile POS systems introduce security threats because sensitive data is manipulated and stored on the handheld device. The solution is to select a system that does not process credit card transactions on the device but, rather, processes the data live on the server using a recognized security protocol like SSL.
Performance: If your mobile POS handhelds take a long time to process transactions, or if it’s difficult for your staff to learn how to operate them effectively, pass. There are user-friendly systems available that offer quick transaction speed.
Vendor: There are enough mobile POS vendors now that you should easily be able to do some fact checking and see what the market thinks about their products and services, as well as support. Does the company continuously improve its software and provide free updates? Is technical support available when you need it? Do your research and engage with a vendor that will provide you what you need not just now, but in the long term.
Data to support mobile POS adoption
With an undeniable shift taking place, there’s a wealth of research that supports the adoption of mobile POS. Motorola Solutions reported some interesting findings from its annual holiday survey that quizzed more than 1,000 shoppers and more than 500 retail sales associates over a two-week span at the start of December 2010:
- 28 percent of store visits ended with an average of $132 unspent due to abandoned purchases driven by out-of-stocks, limited store associate assistance and long check-out processes.
- Nearly 25 percent of surveyed shoppers said they would be very likely to take advantage of a sales associate using a handheld payment terminal to complete their purchase, compared to only nine percent who would be very likely to use their own mobile phone to scan their items and process payment without assistance.
- 68 percent of surveyed retail associates would find it helpful to be able to use a small mobile device to scan barcodes to check inventory and availability of items requested by customers.
Meanwhile, Aberdeen Group reported that 65 percent of retailers identified mobility as a key POS focal point.
Dax Dasilva is founder, CEO and vice-president of development at Xsilva Systems Inc., makers of LightSpeed Mobile, a fully-integrated mobile POS system for the Mac.