For years, retailers have focused on the wrong technologies —in-store TV networks, augmented reality, magic interactive dressing room mirrors—rather than mobile point of sale ‘clienteling’ tools.
It’s no secret that the retail industry is going through a digital transformation. Take a walk through the closest mall or department store and you will encounter RFID product tags, interactive video displays, even iBeacon technology that detects your presence in the store and alerts you to deals.
But, have these retailers focused on the wrong technologies? Mobile point of sale (mPOS) is one such digital innovation that retailers have been slow to adopt, yet the impact on revenue can be substantial and immediate. According to a June 2014 Forrester Research Inc., report [The State of The Digital Store 2014], “Perry Ellis…experienced a 14% lift in average order volume once it implemented ‘endless aisle’ capabilities in-store.”
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How can a single technology make such a big difference? The answer lies in the idea that the entire shopping experience can be transformed when sales associates have access to off-site inventory tracking and recommendation engines. This new transformation is often referred to as ‘clienteling,’ and it empowers sales associates to help shoppers find out-of-stock items, as well as make suggestions for popular associated products.
In a clienteling situation, shoppers are introduced to an “endless aisle” with virtually unlimited inventory and choices. Can’t find that blouse in your color or size? No worry! The color of your choice can be shipped to your home immediately. Built-in recommendation engines can also provide sales associates with smart suggestions to complement that blouse. This intelligence provides real potential for sales-floor-level employees to increase average order value.
Roadblock: Integration
The most common roadblock is the integration component. In order to avoid operational nightmares, mPOS devices need to be tightly integrated with the company’s existing enterprise systems and operational processes. This can seem a daunting task as integration needs may extend from existing retail systems (POS, ERP, and accounting systems) to digital inventory, which may live in an external system, such as an eCommerce platform.
Innovators, such as Square, have revolutionized the mobile checkout for micro merchants and simple service providers, such as taxis, to make it easy to accept payments anywhere an iPhone can connect to a network. However, just accepting payments for even small, medium, and large merchants is not enough. Without integration, employees are left spending three to four hours after a day selling and accepting payments, manually reconciling their sales with the backend systems that manage inventory, orders, commissions, and financial reporting. The other aspect is that vendors like Square sell these services bundled with credit card merchant accounts, which is great for micro merchants, but creates issues for larger merchants who already have established merchant accounts, typically with better rates.
Another approach on the market is a response from the traditional POS (Point of Sale) vendors who are busy mobilizing their complex POS systems that over the years have evolved into much more than payment systems, but inventory management, reporting, and customer management systems. The challenge here is that not all of these capabilities translate very well for ease-of-use and meeting consumer expectations on mobile devices. The other issue is that traditionally the richness of data, in terms of product imagery and description in POS systems, is not sufficient to meet the expectations of the consumer or in assisting sales associates.
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So what is the solution? “Forrester expects that eCommerce platform vendors will continue to invest in and evolve their mPOS capabilities” [Forrester Research Inc., Market Overview: Mobile Point of Service Solutions for Retail – September 2013]. ECommerce solutions already have four winning components: integration with existing store systems, rich product imagery, cross selling data, and interface usability. With minimal customization, merchants can leverage numerous backend connections already developed for their eCommerce and mobile commerce needs to coordinate things such as orders, invoices, inventory levels, and gift cards. These systems are also constantly updated with new payment method integrations and other technologies, generally provided by the vendor via automatic updates. From a usability standpoint, eCommerce solutions are built for conversions and increasing average order size via recommendation engines — so product search, recommendations, and checkout are already customer-friendly.
Retailers should seriously consider integrated mPOS solutions that have evolved from eCommerce platforms. Generally, they offer the endless aisle and recommendation engine features that result in true ROI and make integration quick and effective.
Image: Giuseppe Leto Barone