Off the Shelf provides a platform for Retailers and Consumer Packaged Goods companies to discuss and gain insights on the pressing problems, trends and solutions.

April 8, 2014

To Pause (POS) or Not

In a recent study done by University of Arizona and Demandware it was highlighted that Traditional POS systems at Brick and Mortar stores are not able to keep pace with the expectations of digital consumers and the retailer's response in the form of omni-channel strategies.

The reasons are not hard to see; today's POS systems are no better than siloed systems that have stores as boundaries and cannot look outside to support many of the retailer's omni-channel aspirations. Thus the tools and software available as part of traditional POS are falling short of supporting some of the key initiatives like

·        Single view of customer (or the 360o customer view),
·        Cross channel inventory visibility
·        Looking up inventory in nearby stores or
·        Assisted Selling and Product personalization
·        Personalized Offers

Also added to that these traditional POS devices have a cyclical re-haul  which is to happen in the next 2-3 years -perfectly coinciding with the thinking of several CIOs to see if they should replace the Traditional POS systems.

So what are the alternatives that CIOs or Leaders have -

Option1: Extension of current POS to bridge the Gap

One easy way out for retailers is a natural extension of current capabilities and investments to support future needs. Some POS vendors like NCR, Epicor and Oracle already offer capabilities like Assisted Selling, targeted up-sell and cross-sell and mobile POS.

This option is characterized by (View image) leveraging existing investments to a large extent, lower cost, Faster Time to market, Incremental Change management and clearly Short Term Focus.

Option2: Overhaul of the current system in favor of a common customer transaction suite

A compelling alternative would be that of extending the best in class digital commerce architecture to support store operations. This solution will help connect all channels and implement an integrated solution that will provide a common view of customers, products, inventory, price, promotion and order information. This will also help address other in store opportunities like guided selling, and locate nearby store inventory to save the sale.

This approach is generally characterized (View imageby a Flexible Architecture that can scale to support future needs, Significant Initial Investment, a Big Bang Approach to replace existing POS systems, Training and change management initiatives that are needed to support such a big bang and finally has a Long Term Strategic focus.

In the not so distant future we might as well hear from the best in class digital commerce platform vendors like hybris, IBM WCS, ATG and Demandware about the emergence of a new class of enterprise software - we can call it the 'Customer Experience Management Suite' or 'Integrated Customer Transaction Platform' covering all customer touch points (from stores, desktop, mobile, tablet and Call Center) and providing truly seamless experience. 

However replacing the Traditional POS systems cannot happen overnight nor is it feasible. Some of the broad questions below need to be answered before we can arrive at meaningful answers and way forward

  1. Risk perception of Retailers: What if it means putting all the eggs in a single basket for retailers and if they perceive a higher risk in doing that then that's a huge impediment to deal with.
  2.  Complement or Supersede - Given that traditional POS is entrenched and is a proven model, should retailers look to complement investments in Traditional POS with that from the new customer platform?
  3. Applicability for all types of Retail: Will the new POS platform be suited for all types of retail businesses? Definitely the opinion seems to be divided here - will it be more suited for High value transaction businesses compared to high volume transactions
  4. Security Concerns:  The security and PCI Compliance for traditional retail POS further augmented by Video Surveillance puts it ahead of Mobile POS and make the current offering fairly robust with very few incidence of violations. Unless the new platform is able to match up the security aspects of incumbent it is going to be a hard bargain.
  5. Reliability: Given that the new Mobile POS will run on Wireless network, questions around matching the reliability and availability of existing POS system needs to be addressed
  6. Tenders: Again Traditional POS is designed to accept multiple tender types like Cash and card at a bare minimum. Support for multiple types of tenders needs to be built in
  7. Purpose of Use - Self Service or Assisted: How should mobile POS (based on digital commerce architecture) be used in stores?  Should it be left for self-service as standalone kiosk for customers to checkout and complete payment or should it be used by the Store Associate as assisted selling tool? Or should it be a combination thereof?
  8. Business Process Re-Design / Standardization: Right from re-defining the roles of cashiers and store Associates to designing new business process ranging from providing common inventory visibility, uniform chain level pricing, common promotion definition & delivery, Guided selling, Deliver to home and many more - there is a whole lot of Business process and Role alignment that needs to be thought through and designed.
  9. Training needs: Identification of Change management and Training aspects needs to be done upfront. This will help address various aspects like for example, in an assisted selling scenario (using a new mobile POS platform) determine when exactly to approach the customer to assist and close the transaction? Approaching too early might result in wasted opportunity as customer might have other items or approaching too late will mean wasted opportunity. The roles of cashiers needs to be re-evaluated- How to reskill the current army of cashiers and deploy them as trained store associates to help in clientiling or assisted selling
  10. Choice of Technology: Several options exists for retailer that needs a very careful consideration
      1. Platform Options
        • Extension of current Platform with value added use cases
        • Re-haul of existing platform in favor of Table POS
        • Re-haul of existing platform in favor of an integrated Customer transaction platform driven by digital commerce architecture
      2. Other considerations:
        • SAAS vs On-premises
        • Single tier vs n-tier
        • Rich Website like UX vs traditional POS like UX / features
        • Global Platform vs Localization Needs (store specific, Brand specific)
        • Point to point integration vs Open Standards based Integration with ERPs

It is now fairly evident that it needs a long drawn process where the pros and cons need to be weighed in before a final decision. For the near future we can safely assume that new POS (Integrated Customer Transaction Platform) at best might at co-exist with the enhanced versions of Traditional POS and not end up replacing it altogether.

However in the long run once the benefits from the new systems are realized, when the risk-reward equation has been hashed out and after enough pilots validate/fail to validate the hypothesis and long after store associates are adequately trained and when Mobile Payments become main-stream - we can for sure say that the new POS platform (with much lower incremental cost) will have sufficiently replaced the existing ones.

In my view we are 5 years from that point of inflection, but that's good enough a time for the likes of established Traditional POS players like Epicor, Oracle, NCR SAP, Microsoft and Retalix to take rearguard action and have a compelling solution offering to stifle progress of Digital Technologies in their own turf. Whichever way the pendulum swings, it's a very interesting space to observe and act in the next 18-24 months as it is bound to have far reaching impact on the future and landscape of POS technologies and solution offerings.

January 30, 2014

The changing behavior of retail customers

On behalf of Nitin Lehri

In today's knowledge based society, consumers are aware that products are interchangeable. What has led to this self-awareness? Of course internet revolution and social forums riding on the cyber wave have a major part to play in this. Organizations have gone to a great length to increase the penetration and reach every consumer in its household thereby educating consumers. Thus consumers have gradually migrated from 'hard' shopping to 'smart' shopping. Few years back retail landscape could be summarized as small corner shops or couple of mom-and-pop stores with few scattered supermarkets. Consumers were having few substitutes for a product at any given store. Further there were few options for the stores itself in the vicinity. Now even the supermarkets are getting saturated fighting for a piece of pie especially in developed economies like UK or Germany. Another significant change has been in purchasing power of consumers as they comfortably splash on luxury goods after satisfying their physiological needs. Thus the standard consumer target group "Joe Bloggs" of 1950s has metamorphosed into multiple precise target groups.

Continue reading "The changing behavior of retail customers" »

January 16, 2014

Yin-Yang of online and offline-from two different worlds to a state of harmony

On behalf of : ** Jaspreet Singh**

Not too long ago, we didn't have any identity on the Internet and there used to be only one world for us. Online space was restricted to governments and academic institutions- it was a separate life-less world with little connection to our daily lives. Gradually, with the mass adoption of email culture and the advent of socialization, collaboration and personalization in the online space, it seems to be brimming with life. Now each one of us are active online and our personal life, work life, education, etc. seem to be imbued with the online world.

Continue reading "Yin-Yang of online and offline-from two different worlds to a state of harmony" »

January 14, 2014

Online shopping in small town India: Will it be a feasible model?

On behalf of : Manideepa Talukdar

India is the fastest growing e-commerce market in Asia according to a study conducted by Forrester Research in 2012 for ASSOCHAM's 2nd National Conference on e-Commerce 2012. In 2013 the Indian e-commerce market grew by a mind boggling 88% to $16billion as per a survey conducted by the industry body ASSOCHAM. In the early days Indian e-commerce market was being led by Tier I cities but the trend has moved on to smaller towns. For instance online shopping website derives 60% of its revenues from smaller towns.

Continue reading "Online shopping in small town India: Will it be a feasible model?" »

January 12, 2014

How to engage your online customers' brains

On behalf of : Jayalakshmi Subramanian
Is social commerce even worth discussing? There is a lot of noise being made about social media and how it is the manna from heaven from marketers. While one can safely say that investing in social media might give some monetary returns and returns more in the form of intangibles such as brand building and consumer intimacy, the real question is - Is there any spending happening aided by social media or in other words is Social Commerce a reality now?

Continue reading "How to engage your online customers' brains" »

January 7, 2014

Gaining Insights into Competition (through Social Media) like never before

On behalf of : Princee Jain

A couple of previous blogs (Can insights from social analytics be the final piece to the "360° customer view" puzzle?) explain how social media can help profile consumer behavior towards a brand, a product, an event etc. In this blog I would like to throw light on how social media can help companies know their competition far better than before especially from the days when there was no social media.

Continue reading "Gaining Insights into Competition (through Social Media) like never before" »

December 25, 2013

The Hybrid shopping experience

On behalf of : Ugandharji HM

Retailing has been evolving over the years. What started as independent 'mom and pop stores' transformed into the first true self-service grocery stores in the form of Piggly Wiggly, where customer selected merchandise as they walked through the maze to the cashier. This further changed with the advent of the 'Big Box' retailers such as Walmart and Carrefour, which completely changed the landscape of retailing- the customer now had the option of shopping all under one roof. The rise of the digital era, completely redefined customer shopping experience with Digital retailing such as amazon and ebay, and shopping now could be done anytime, anywhere as long as one was connected to the internet.

Continue reading "The Hybrid shopping experience" »

Soft Goods Retailing: Where to draw the boundaries?

On behalf of : Anup Kumar

Should retailers continue with 'Make to Stock' or adopt 'Make to Order'? Apparels industry has moved on to force fit the consumers in one of the five defined sets - XS, S, M, L, and XL. The question that needs to be answered is how to address the changing consumer demands. A consumer may still like to go ahead with one of the five sets, but they have continued to evolve in terms of the selection between color of the dress, texture and fabric of the cloth, design and fashion trend, etc. Though consumers have been picky on these aspects ever since the industry existed consumer demand has evolved to find out what offer is just exclusive for them. Now retailers need to redraw the boundary between the traditional way of fulfillment and the way to address the changing buying pattern of the consumers.

Continue reading "Soft Goods Retailing: Where to draw the boundaries?" »

Soft Good Retailing: Is it a Rubik's cube or simply 1+1?

On behalf of : Anup Kumar

With the empowerment of consumers by technology in various ways, the style of shopping has changed over the past few decades and if given a deeper thought shopping for apparels has seen the biggest shift. Is it only to do with the changing life style of consumers or is it also a lot to do with the adoption of retailers to the changing life style? If it is more to do with the second option ever wonder what more needs to be done?

Continue reading "Soft Good Retailing: Is it a Rubik's cube or simply 1+1?" »

Online Grocery Shopping: The Next Big Thing or The Big Avoid?

On behalf of : Roary Lee

What ever happened to Webvan? Over a decade ago, Webvan was the hottest thing since sliced bread. At home, from the comfort of my favorite couch, I would go online and select all of the grocery items that I wanted. Then, I would checkout and select a delivery date and time. Like clockwork, when the scheduled time would arrive, I'd see that tan Webvan truck heading into my subdivision. All I had to do was answer the door. The driver even brought the groceries into the house!

Continue reading "Online Grocery Shopping: The Next Big Thing or The Big Avoid?" »