Is Your Software Stopping the Sale?Three Imperatives to Prepare for the Future of Point of Sale

The Architecture Albatross........................................................................................................................................................................5

Three Imperatives to Prepare for the Future of Point of Sale....................................................................................................6

Meeting the Needs of Mobile and Web-Savvy Customers..........................................................................................................7

Delivering a True Omni-Channel Customer Experience by Dissolving Channel Boundaries and Adapting to Device Innovations..........................................................................................................8

Creating a Future-Proof POS Architecture.........................................................................................................................................9

Toward the Future of POS......................................................................................... ..............................................................................11

Inside

Mobile and web-savvy customers expect retailers to keep pace with the changing tides of technology. Whether in the store or at their desk, or on their mobile devices, potential buyers want to see the same product information, product reviews, and promotions as they want to take their shopping experience wherever they are.

Customers are demanding more from retailers.

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Retailers have been sluggish in keeping up with advances in mobile devices and other technologies that are making “retail anywhere” possible. With market demand forcing retailers to react, how can they adapt now to deliver a superior, digitally enabled experience for customers?

The architecture albatross

The majority of today’s retailers are still running point of sale (POS) software that was not designed with omni-channel scenarios in mind.

This is a major bottleneck in moving toward the future of POS. These monolithic POS architectures do not deliver a consistent experience from the channel perspective, and they do not allow retailers to adapt to new technology trends or devices.

In an effort to enhance their omni-channel capabilities, retailers historically have made “band-aid” fixes, bolting new solutions on top of their core POS software. These solutions might offer short-term answers, but they also create long-term issues by hindering flexibility and speed to market. For example, a new promotion idea may take up to four to five months to be implemented at POS. The technology cannot adapt as fast as the business is thinking.

According to Gartner and Accenture research in 2011, it takes 2 to 5 years to bring most new POS functions—such as retail public social networks or mobile coupons—into mainstream adoption. Some retailers are better equipped than others to do so. Traditional brick and mortar retailers struggle the most as they are competing for the customer’s loyalty and wallet share alongside similar retailers, but also with online retailers. However, all retailers run the risk of the productivity plateau if too much time goes by before the POS idea takes hold.

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Three imperatives to prepare for the future of point of sale Many retailers are struggling with legacy POS systems that were built on yesterday’s assumptions about consumer behavior. By addressing these three imperatives, retailers can move closer to building a point of sale system of the future that enhances customer satisfaction and strengthens cross-selling efforts. These imperatives include:

1. Meeting the needs of mobile and web-savvy customers.

2. Delivering a true omni-channel customer experience by dissolving channel boundaries and adapting to device innovations.

3. Creating a future-proof POS architecture.

1. Meeting the needs of mobile and web-savvy customers.

Customers expect a seamless, integrated experience. They are only satisfied when they can buy what they want, whenever and wherever they want it. In most cases, customers are savvier about the products the retailers are offering. They conduct product research before even walking into the store. Customers think that the retailers should be able to deliver on the findings of their research, be it through social media, online or at the store.

To respond to this growing sentiment, retailers can no longer strategize and operate their stores, websites and mobile shopping channels independently. Many retailers are concerned with adding m-commerce functions and integrating e-commerce with stores. They are also worried about the speed at which they can update and upgrade POS systems to keep up with new technology. Retailers must have a comprehensive strategy around adopting popular or emerging mobile devices, and leveraging them to deliver a remarkable shopping experience.

There is no “one-device-fits-all” plan, but there are ways to successfully navigate the ever-changing technology landscape and adopt new technologies in ways both sales associates and customers will welcome.

Consider the Apple Store. These stores are always abuzz with customers hungry for this unique retail experience. Representatives answer customers’ questions, check stock and finalize sales with hand-held devices. Nordstrom is also jumping on the wireless wagon. As of early April 2012, Nordstrom had deployed more than 6,000 mobile POS devices throughout its 117 full-line stores. It is not a coincidence that the company’s March 2012 quarter-to-date total retail sales were $1.73 billion (increased 15.3 percent) compared with total retail sales of $1.50 billion for the same period in fiscal 2011.1 Nordstrom also announced that it is foreseeing more e-commerce and mobile commerce in its future. Nordstrom is moving toward an engine which is going to

Fifty-two percent of retailers consider modern POS hardware and software a “very valuable” technology to support.- Retail Systems Research, June 2011 report, “The 21st Century Store: The Search for Relevance.”

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provide new mobile shopping options and personalization features for customers, so that the customers will receive recommendations based on their online and in-store buying habits.

GUESS is now embracing iPad as part of its sales strategy. The excitement behind the new integration was described by Michael Relich, GUESS Inc.’s executive vice president and chief information officer, stating that “VeriFone’s GlobalBay iPad Retailing solution provides GUESS with the flexibility to easily configure, customize and deploy multiple customer engagement capabilities and staff training content on the fly.” He added that they will now be able to “access our online resources in the store and sales associates can roll the iPads into the dressing room to visually display options and accessories to make shopping more fulfilling and enjoyable.”2

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Customers expect to see, feel and get the same experience regardless of channel. So when newer, better, faster devices with enhanced capabilities hit the market (on average, every three to six months), retailers must seamlessly integrate these devices to help dissolve or mute the boundaries between channels. The possibilities to reach customers in new ways with these portable devices are endless, but the monolithic architecture (Figure 1) is a constraint in today’s retail world.

Retailers are striving to understand: is POS the center of the universe that the retail experience revolves around, or is it merely a tool for delivering a consistent experience to the customer?

2. Delivering a true omni-channel customer experience by dissolving channel boundaries and adapting to device innovations.

What is clear is that retailers need a flexible technology ecosystem that allows for plug and play.

A future-proof architecture will be flexible to allow the addition of new capabilities, such as mobile POS checkout for customers and store associates, and also connections to other systems. By creating a sustainable architecture that flexes with consumer needs, companies can avoid investing in band-aid fixes that end up being more costly over the long term.

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Store Associate

SelfService Customer

Register

ElectronicJournal

SupplyChain

Kiosk

TransactionLog

Customer and Item

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Connection toCorporate

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Figure 1: Monolithic architecture

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3. Creating a future-proof POS architecture.

Figure 2: The flexible, future-state architecture

UI Layer

Extended Application Layer

Core Application Layer

Business Logic Layer

Services Layer

Security Layer

Data Layer

The “future state” POS architecture must deliver the speed to market and agility that retailers need to keep up with consumer demand and technology advances. Most architectures today limit the ability for retailers to bring a new idea to customers in a short period of time.

The future state architecture has to be able to deploy capabilities in various layers, as everything will be service-based. The layers must be independent of each other so that retailers can deploy new capabilities in one layer, without having to make any changes to the core of the architecture.

Extensions and plug-ins

In addition to standardization on a common framework for building the POS application, another goal for the future POS architecture is allowing customizations to be added to the existing process without risks to the core application’s logic (e.g. sign-on, item, tax and tender). Extensions to the primary POS flow should be encapsulated outside of the core, yet interact with the transaction and share its services.

Extensions (plug-ins) will register themselves with POS to be invoked when items or other events require capture of additional informa-tion, or an action such as activation. Sale associate imitated events may also activate a plug-in.

The future-proof POS architecture will allow development of plug-ins to occur in parallel with others. They can be tested independently and integration-tested to focus on their logic, without side effects to the core POS transaction.

Plug-ins, because they are external to POS, can be disabled and removed with no changes to the core POS. The POS and the plug-in will share common infrastructural components and services. The usage of these will allow shared knowledge of the operation environ-ment, enabling a consistent experience for the associate. At the same time, plug-ins will not bog memory or infrastructure.

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The cloud

Vendors are developing strategies of POS in a cloud, but the adoption of this architecture has been slow among retailers. However, any retailer thinking of re-platforming POS applications should consider this architecture. The business case is too strong to ignore based on the age-old argument, “we can’t rely on the network being up 100 percent of the time.”

Competitiveness in the broadband market has enabled retailers to consider the most reliable networks. Additionally, redundant technologies, such as routers enabled with 4G backup, continue to be developed. One must think about whether an e-commerce platform can become tomorrow’s POS platform for retailers, or vice-versa. The explosion of e-commerce (.com) has challenged the notion of uptime and scalability. But now that we have crossed some of the fundamental barriers that compelled organizations to design offline capabilities, POS application may no longer be needed. Successful organizations, such as Amazon, are running with those principles in mind.

Toward the future of POSMobile devices, such as the iPad, can truly revolutionize the customer experience. In recent years, businesses are still trying to figure out how to best leverage these devices. Some have made progress, and retailers including Nordstrom, Guess and Apple are embracing these devices as part of their sales and marketing ecosystem.

The mobile consumer is embracing technology, and they have the same expectations for retailers. In response, retailers must start at the foundation, addressing the critical imperatives and building a flexible POS architecture that can meet the needs of today’s—and tomorrow’s—digital consumer.

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Nathaniel FrySenior Executivenathaniel.fry@accenture.com

1Forbes, “Nordstrom Sees Sales Boost From Mobile POS Devices,” April 6, 2012, online at http://www.forbes.com/sites/kellyclay/2012/04/06/nordstrom-sees-15-3-increase-in-retail-sales-following-introduction-of-mobile-pos-devices/

2 Mobile Marketing Magazine, “GUESS Deploys In-store iPads”, online at http://mobilemarketingmagazine.com/content/guess-deploys-store-ipads.

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