Retailers are in the midst of an arduous but essential transition from siloed channels to unified commerce. Much of that work entails transforming the underlying infrastructure that controls the way merchandise is planned, orders are managed, inventory is distributed and customer data is accessed.
But the unified commerce transformation also changes the end points that feed off that foundation. POS, long considered the heart of a retailer’s store systems, is now disrupted. At the same time retailers are shifting their cultures and infrastructure, they must reconsider how POS functions in this new world.
“Traditional in-store POS capabilities are becoming modularized and are being migrated to a single commerce platform,” says Brian Brunk, principal, Boston Retail Partners (BRP). “With the increasing sophistication of today’s network technology, we will see a more rapid movement of these capabilities to the cloud. POS as we know it today will be changed forever.”
Why Unified Commerce
Eight-five percent of retailers consider unified commerce a top priority, according to BRP’s “17th Annual POS/Customer Engagement Benchmarking Survey,” but 37% also report their POS software is more than five years old. So at the same time they are working to integrate or replace disparate backend systems, those retailers need to revisit the role of POS in the customer experience, and consider how they can align new solutions with both where they are now and where they want to go. That’s a lot to take on.
“Having a great single customer experience across all channels should be a retailer’s top priority — this is the foundation of platforms,” says Bob Feher, market intelligence for NCR. “Platforms will allow for a better customer experience with seamless interactions” at the POS in addition to other benefits across the organization.
Retailers Power Ahead
Retailers drove forward aggressively toward unified commerce. In 2016:
- Performance Bicycle adopted a singular platform to unify its channels and support seamless customer experiences. At POS, associates can create any order and have it fulfilled to the customer’s specifications.
- PacSun deployed new POS to support omnichannel capabilities and transform the customer experience, including a new loyalty program and the ability to deliver what customers want, when and where they want it.
- Dick’s Sporting Goods worked toward an immersive and interactive customer experience, one that ties e-commerce, mobility and wearables.
BCBG Max Azria also made major advancements toward a cloud-based, unified platform. “The benefit of unifying our customer engagement processes in the cloud is huge,” says Robert Fort, CIO, BCBG Max Azria. “Beyond the usual IT benefits of centralized software deployment and support, our customer benefits from seamless, real-time processes and data sharing.”
But many retailers are struggling. In one cautionary tale, Rent-A-Center attempted to accelerate a POS rollout as part of a unified commerce transformation. But system performance issues brought short-term pain by impeding employee profitability and negatively impacting core sales. Things later improved, but the incident points to the cultural and technical difficulties.
“Retailers are grappling with technical integration challenges,” says Mike Hughes, VP, singular commerce strategy, Aptos, including siloed backend e-commerce and order management systems not aligned with store POS. “Something’s gotta give, and it’s a big project to reengineer a hub for centralized inventory management, order routing, order orchestration and fulfillment. This presents widespread organizational disruption.”
While some extol a single, central platform, many retailers struggle to find a viable path to that ideal.
“One of the principal challenges is that no retailer buys software this way today, and even if they did no retailer would ever rip-and-replace their entire retail enterprise software stack in a single go,” says Jeff Warren, VP solutions management, Oracle Retail. “We believe that the focus should actually be about a unified experience for both the customer and associate. What is important is having all of the functionality at their fingertips, not that it all comes from a single monolithic piece of software.” This is achieved using tools such as strong web services and APIs.
Many are confident that retailers will find their way. “By 2020 the vast majority of major retailers will have some form of unified commerce in place to support buy anywhere, fulfill from anywhere,” predicts Aptos’ Hughes.
POS will find its rightful place in this new setting, delivering not just fast, secure transactions, but the same omnichannel and customer-centric experience the retailer needs to deliver at any touchpoint.
In the company’s benchmarking survey, BRP’s Bunk, called this singular approach “the game changer, as it fundamentally changes how retailers think about POS and is driving much of the activity we are seeing in the solution marketplace.”