Point of Sale – The Change Agent for Retail Evolution

This post is also available in: German

We’ve talked a lot about how the retail industry is going through a transformation in this blog. The consumer, and their desire to make informed purchase decisions are driving most of this change.  As retailers begin to adapt to the connected consumer, many of their systems will begin to change in order to support the experience the consumer is demanding. The one system change that will likely take the lead in this change is the Point of Sale (POS).

Retail stores are doing everything they can to entice consumers to visit their location, and forego shopping online. The theory is that a superb in-store experience, combined with instant fulfillment, will make even the savviest connected consumer spend more time and money in the store.  For this to happen however, there is a bar for convenience that has been set by the e-commerce industry that must be matched – checkout.

The greatest in-store experience that ends with a long wait at checkout,  a delay for a price check, or a scanner that will not read a mobile coupon, will undue any of the positive experiences the consumer had while shopping for a product. As a result, retailers need to rethink the checkout process in the store, and make it as seamless as possible. Ideally, the consumer will be able to walk into a store, be recognized immediately by a technology such as iBeacon, shop for their products, and simply walk out. During that process, their credit card will be charged for the transaction, and coupons will be automatically applied, and a receipt emailed to the consumer.

Now that is a scenario that is probably a little farther out in the future than most consumers would like. However, there are some scenarios in place today that are a vast improvement over today’s long checkout lines. The first that comes to mind is the Apple Store. There, the consumer simply opens the Apple Store app, scans the products they want to purchase, and pay with their iTunes account. The receipt is emailed, and the consumer can leave the store without ever interacting with a store employee.

There are other checkout methods that require even less work for the consumer. Many retail locations have abandoned a front of store register, for associates with mobile check out devices, such as an iPad. Stores like Urban Outfitters have forsaken the cash register for the iPad.

As the point of sale goes mobile, there will be a huge ripple impact to the other systems at the retailer.  Inventory, sourcing, supply chain, and product information systems will now have to be able to be better connected and serve data to mobile POS apps. This will require data from these systems to be delivered by vastly different methods and technologies than are in place today. The requirements for technology change will also align nicely with the changes required for retailers to break down the silos that have held back Omni-Channel efforts as well.

As retailers begin to change their core technology stack, they will also look to enhance their product information content supply chain. They will look to require more data, both from manufacturers, as well as third party sources (reviews, analysis, etc.) and social media. This will help retailers respond more efficiently and effectively to the growing consumer demand for product information.

The impact of new POS technologies will not stop at retailers systems. Everyone in the retail ecosystem will need to respond to this as well. From logistics providers, manufacturers, distributors, and even GS1 (from identification to symbology – more on this in another blog post). So the transition won’t happen overnight, but as a consumer, I’ll be happy to see the front of store cash register go away. Perhaps what I’m more excited about is how the shift in the checkout process and POS technology, will lead the way for a much better shopping experience all around.

About Ken Sickles

VP of Global Product & Strategy - "Crafting a better world with technology."

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