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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.

October 22, 2012

Are you Game?

I was intrigued when my son walked up to me with a request to order a pizza he had made on ipad game app from Dominos. The fun and excitement of playing the game coupled with pride of self-accomplishment was inescapable in his eyes...we did order the pizza and it was clear that Dominos now had a new Gen Y consumer.

Continue reading "Are you Game?" »

September 30, 2012

"Mobile Apps For Faster Shopping Sprees"

 "Google Indoor Maps" has opened a whole new opportunity to retailers whereby they can enable their customers in getting easy and quick access to the products that they're looking for. In brief, "Google Indoor Maps" allows a person walking inside a store to navigate his travel within this indoor location just like what she(/he) would have done while driving a car using a GPS

Integrating these maps with Retailer's own mobile application (app) and tagging a store's aisles by "Product Categories" on these Google Indoor Maps for a large format store, going down to category of products available by Brands may be just the beginning of the thought as to how Retailers allow their patrons to directly reach out for the product that they are looking for rather than wandering through store departments or searching for a store associate which for some shoppers may be time consuming or even frustrating.

One of the best supporting feature on Google floor maps, is the ability to guide the user by individual floor's plans, whereby a large multi-level retail stores can also be covered easily and therefore we feel that some of the immediate exploits can be in the large scale Store or say Super Store

Let us try to understand how one such Retailer app may make the life a Retailer's clientele much simpler and the shopping experience much better. Assume the scenario that our loyal Customer "Louise" is entering such a Large Super Store for her weekly purchases which runs across several departments of the store like fresh produce, dry grocery, apparel, cleaning supplies, bath-ware, electronics, sports goods and the list goes on. Soon after she has parked at the store, Louise logs-in to the Retailer's own native Mobile app on her smart phone. The Retailer's app upon invocation on her smart phone, detects her geographical location and the store that she is visiting today via Location Based Services (LBS) wherein this specific store's latest tagged maps can be pulled and displayed on Louise's phone's screen

To make the whole shopping trip faster, Louise has keyed in the shopping-list beforehand in the app and a route map is prepared for her upon her check-in into the store via this app. This route map is based on the latest movement of shelves/racks in the store.  Such a guided walk cuts down the Louise's walk through the aisles a short, easy and a confortable one

Louise was looking for a shirt for her son, but the size small does not appear on the shelf today... does the store have it? No problem... the check would be a quick one by Louise quickly getting to know this via her mobile app. Moreover, if it is not available in store right now, the app prompts her with an easy and quick site to store order which she can pick up during her trip next week 

Another use for this app+google maps eco-system can be to integrate with the floor maps and publish current vacancies/next available time slots/expected wait times in Large Store's sub stores like ophthalmologist shops, saloons etc.

 

This Large Super Store's sub stores are very frequently publishing a status of a vacant customer spots/seat available or unavailability of the same on the floor map which when viewed by Louise, will give her an idea whether she needs to do the shopping first or go to the sub store for a quick visit to the hair salon

While these are just some of the initial thoughts, when pursued actively this specific technology can be utilized in umpteen ways to boost the store sales and to guarantee customer satisfaction. Overall, sky is the limit when one starts documenting the concept of such a solution/product. Customer purchase/return history and loyalty points can be utilized to highlight offers/deals when customer is approaching a specific aisle or when she has been looking for a specific product for some time

This article has been contributed by Ashutosh Kaushal - Senior Consultant (Sterling Commerce - Infosys Ltd). You can reach Ashutosh at Ashutosh_Kaushal@infosys.com.

 

Leveraging Social / Consumer Genome for Merchandising

Most retailers traditionally leverage sales data from POS terminals to analyze buying behavior. In some cases, loyalty card data is also used to determine appropriate assortment decisions. These data sources and their corresponding analysis have proven reasonably helpful, though they don't convey the whole picture. With the recent explosion in social and consumer related data on the web, there is a wealth of information that Retailers should be exploiting and incorporating into their merchandising decisions, primarily around assortment and space.

Social/Consumer genome related data provides rich insights into needs, wants and buying behavior of individuals. This data when combined with demographic and geographic data can provide a good map of consumer wants and needs for a given market for a set of product categories.

A major input into merchandising decisions / assortment plans is to determine consumer buying behavior to identify what products sell and what potential products could sell to increase sales. Based on this analysis, assortment decisions of inclusion/exclusion or allotment of space are provided. The means to identify this buying behavior was typically the use of POS data or data from Nielsen/IRI that provided good basis for WHAT was being purchased. When married with Demographic data, there was a good proxy for WHY the products were being purchased. Even when rigorous correlation and clustering analysis is carried out, the determination of buying behavior and the reasons for the same were proxies at best.

Now with the availability of consumer genome or social genome information, the analysis of WHY purchases are being made and what is being purchased with identification of latent and express needs becomes even more accurate as there is clear expression of wants and needs. This will significantly enhance the quality of assortment and merchandising decisions as the degree of error/approximation is reduced.

There are however some pitfalls to the use of this data. We cannot solely rely on this data as web usage and consumer/social genome information may not fully represent buying needs and wants for the entire market population. This data usage has to be married to traditional sales analysis to augment the decision making process.

There are no tools / application products in the market place that provide truly integrated capabilities. The holy grail for optimized merchandising would be to integrate social/consumer genome data effectively into the traditional clustering analysis and thereby into the assortment planning process. This might be a challenge for some of the retailers who struggle with traditional approaches. Asking them to adopt more advanced analytical approaches to incorporate social/consumer genome data would be a challenge.

The key would be to devise suitable technology/process platform augmented with robust analytics shared services that can leverage necessary data to enable optimized merchandising decisions.

This article has been contributed by Amitabh Mudaliar (Group Engagement Manager - RCL Infosys). You can reach Amitabh at Amitabh_M@infosys.com.