BrainTrust Query: “Traditional POS is Dead”

Discussion
Feb 11, 2011
David Dorf

Through a special arrangement,
presented here for discussion is an excerpt from a current article from Insight-Driven
Retailing
Blog.

Traditional POS is dead! — I’ve heard that one
before. The arrival of mobile POS promises to reduce long checkout lines,
shrink the cost of funding of elaborate checkout counters, and free up both
retail space and employees’ time.

I’ll grant that in some situations for some
retailers there might be an opportunity to ditch the traditional POS, but for
the majority of retailers that’s just not practical. Take it from a guy that
had to wake up at 3 a.m. after every Thanksgiving to monitor POS systems across
the U.S. on Black Friday. If a retailer’s website goes down on Black Friday,
they will take a significant hit. If a retailer’s chainwide POS system goes
down on Black Friday, that retailer will cease to exist.

Mobile POS works great
for Apple because the majority of purchases are one or two big-ticket items
that don’t involve cash. There’s still a traditional POS in every store to
fall back on (it’s just hidden).

Try this at home: Choose your favorite e-commerce
site and add an item to the cart while timing how long it takes. Now multiply
that by 15 to represent the 15 items you might buy at a store like Target.
The user interface isn’t optimized for bulk purchases, and that’s how it should
be. The web-store and POS are designed for different purposes.

Self-checkout
is a great addition to POS and so is mobile checkout. But they add capabilities
to POS, they don’t replace it. Centralized architectures, even those based
in the cloud, are quite viable as long as there’s resiliency in the registers.
You cannot assume perfect access to the network, so a POS must always be able
to sell regardless of connectivity.

Clearly the different selling channels should
be sharing common functionality. Things like calculating tax, accepting coupons,
and processing electronic payments can be shared, usually through a service-oriented
architecture. This lowers costs and providers greater consistency, both of
which help retailers.

On paper, these technologies look really good and we should
continue to push boundaries, but I’m not ready to call the patient dead just
yet.

Discussion Questions: What’s the likelihood that mobile POS will eventually lead to a significant reduction in traditional full-service checkouts? Do you see complications/hurdles in rolling out mobile POS? What benefits may full-service checkouts provide over mobile POS?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

17 Comments on "BrainTrust Query: “Traditional POS is Dead”"


Sort by:   newest | oldest | most voted
Steve Montgomery
Guest
10 years 3 months ago

I agree with Mr. Dorf that mobile POS works well in selected environments where the number of items purchased is small (and where there is traditional backup just in case). I also agree that it will not replace traditional POS any time if the near future.

A traditional POS provide an environment geared to handle all types of transactions. There is a defined place for the parties to perform their roles–customers to place their purchases (large or small), the functionality for the store associate to record the transactions and accept payment of any type, etc. I don’t see clerk walking around with cash and a change maker for mobile POS.

Ron Margulis
Guest
10 years 3 months ago

At many high-volume retailers, mobile POS will most likely be leap-frogged by other technologies like item-level RFID–you probably remember the IBM commercial a few years ago where a shady looking character is shown what the viewer perceives to be shoplifting and is collared by a security guard as he exits the store who just reminds him to take his receipt. For low volume, high ticket item retailers, the mobile POS will become the norm to ensure positive customer engagement, make specific offers to loyal shoppers and to help reduce shrink.

John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
10 years 3 months ago

Mobile POS is practical at some retail outlets and during some shopping trips. Shoe stores, The Apple store or a quick trip where a consumer is buying fewer than 3 or 4 items. I use the self checkout at my local grocer when I have fewer than 15 items and not more than 1 or 2 variable weight items. If I have more than 15 items, I look for the shortest full service register lane. Consumer experience is what will ultimately dictate what a retailer does.

Over the next 20-30 years retailers will most likely have a mix of options for consumers. Mobile POS, Self checkout and full service lanes. This gives each consumer the opportunity to check out with the option that best suits their current needs during that trip.

Ben Ball
Guest
10 years 3 months ago

Mobile POS will eventually lead to a reduction in traditional POS because retailers will push it–just as they pushed self-scan–as a labor savings. The unexpected benefit of self-scan is that many shoppers prefer it. This will only increase as generations move on.

The hidden downside to POS is that it will completely eliminate the one most reliable place retailers have to tempt shoppers with impulse purchases–the checkout. They almost lost this opportunity with self-scan, because original self-scan installations did not anticipate nor accommodate product merchandising for items like candy, gum, magazines, and beverages. Retailers figured this one out (with a little help from manufacturers) and solutions were quickly developed.

But with mobile POS that “100% chance” to tempt the shopper will be a thing of the past.

Ralph Jacobson
Guest
10 years 3 months ago
This all comes down to having to provide the customer with the “choice and control” of their shopping experience. Based upon the different shopping missions involved, multiple types of POS with continue to be required to satisfy the customers’ diverse needs for fast, low item quantity transactions, as well as high-service large orders. Examples in this article highlight scenarios that demand different execution strategies at the point of checkout, especially the type of merchandise being purchased. Where improvements can be made are in the layout of the physical stores. I still see “express lanes” in supermarkets that are designated “15 items or less,” while those same stores have an average transaction size of 12 items. So, an average transaction is an “express” transaction? Maybe. However, the allocation of express lanes typically don’t reflect that fact. Also, for large transaction, how well do we truly satisfy those most important customers? We should go back to those days in the 1970s when Jewel Food Stores in Chicago, my alma mater, employed “Super Teams” for large orders on… Read more »
Larry Negrich
Guest
10 years 3 months ago
Remember when “line busting” was going to solve all of the checkout issues? I don’t hear that term much anymore. We are seeing a great amount of interest in mobile (read: tablet-format) POS solutions. Durability, connectivity, integration are all issues that have to be dealt with to make these viable POS/register solutions for larger retailers. A couple of vendors have introduced retail hardened tablets that can take a licking and still keep ticking (second archaic reference of the day). As far as self-checkout, I find the Trader Joe’s commercials interesting as they depict the self-checkout process as lower level of customer service. Hybrid POS environments accommodating traditional registers/lanes, mobile tablets, self-checkout, and eventual consumer-mobile-device executed checkout would be ideal as it would give consumer their choice of interaction at the point of purchase. Shoppers will be able to choose from dealing with a chatty cashier who touches everything being purchased or live a life of isolation while bagging and paying for their own items without ever talking to a store employee. Options are great from… Read more »
Paula Rosenblum
Guest
10 years 3 months ago

Black Friday for you, David…the day before Halloween for me! The panic of the POS potentially going down.

I don’t think traditional POS is going anywhere. As David points out, for one to two items, mobile POS will work just fine, but you can’t avoid the assembly line approach to fast moving consumer goods. We’ve seen a tunnel on these pages (I couldn’t relate), we’ve seen the RFID portal (physics got in the way of that one), and now I guess there’s some presumption that the human buyer might self-scan as she walks through the store. Not gonna happen. We need more assisted service.

I will say that in most cases, POS as an island of automation is dead. It must be integrated with the rest of retailers’ selling channels. Although again, having worked my way through the Supermarket, found all the things I want to buy, the LAST thing I want is for someone to try to sell me something or give me a coupon at the POS.

Anne Howe
Guest
10 years 3 months ago

What has happened to the concept of shopper assistance? The last thing I want as a shopper is to be responsible for everything all by myself. All the technology in the universe that helps retailers become more efficient is only useful if it takes the burden off the shopper. I think retailers are wise to test and learn, but only if shopper preference is at the top of the list as to why they are doing what they are doing.

Ben Ball
Guest
10 years 3 months ago

Paula makes a great point that deserves elaboration on my original post.

I don’t think consumers “value” most of the things retailers do to try and encourage incremental impulse purchasing. From checkout merchandising to putting the milk in the far corner of the store, consumers will tell us they would prefer a different shopping experience–and they mean it!

But the dilemma for retailers is that eliminating these impediments to customer satisfaction almost always results in lost sales per trip. And until someone comes up with a shopping experience that is SO compelling that it can overcome the number one reason consumers choose a store (proximity and convenience) thus causing shoppers to completely abandon their local supermarket–then this will be something retailers must wrestle with.

Mark Burr
Guest
10 years 3 months ago
Too often we forget that the purpose of POS is to take the ‘money’ from the customer. It’s higher purpose is to make that ‘final’ impression on the customer. If there is no other point in the store where there is an experience connection it was always assured that there is at POS. It’s that final chance to greet, converse, get to know, and meet your customer’s need. Technology tells us that we can ‘save labor’ in numerous ways through both self-checkout and other POS advances. Wise retailers maintain a healthy skepticism in that premise. Studies suggest that even customers who don’t use self-checkout regularly still expect certain retailers to ‘have it’. However, even with self-checkout, effectively utilized, customer connection and experience can be maintained if not enhanced though the ‘check-out assistant’. As retailers look to advance POS further into even more shopper interactive technologies, execution and customer connection is well worth being top of mind. It’s the last point of connection with the consumer. Poorly executed and without a connection, it may turn out… Read more »
Jason Goldberg
Guest
Jason Goldberg
10 years 3 months ago
There are a two things going on here that are not directly related. 1. Traditional POS is obsolete. The checkout experience in most retail stores stinks, and the POS systems are partly to blame. The majority of POS systems deployed in the US are based on antiquated architectures that hard code the retailers business rules in the POS app. Want to do a new kind of promotion… that’s a programming change. What to eliminate restocking fees… you’ll need to spin up your Cobal programmers. Retail IT departments have wanted to modernize for some time, but there hasn’t been a compelling ROI to do so. Today, customers’ expectations around cross-channel experiences are offering a compelling ROI to retailers to upgrade. 40% of Best Buy’s online sales are delivered to retail stores for pickup. Each of those store visits creates an opportunity to increase the shopping basket, that a legacy POS wouldn’t allow. Modern POS architectures share a common set of business rules across all channels (web-stores, call centers, etc.). In the near future, retailers will compete… Read more »
Kai Clarke
Guest
10 years 3 months ago

There is an entirely different aspect here that we cannot ignore; time. Mobile POS requires more time! You still have to touch, scan and pay for the product, and most consumers prefer to have the traditional scanning and bagging system access, rather than a mobile interface that takes longer to record, let alone requires more handling and accuracy from the consumer (who are not doing this every day). We haven’t even addressed accuracy, plus the issues of missed scans, shrink and of course returns on a mobile POS vs. the traditional system.

W. Frank Dell II
Guest
10 years 3 months ago

Mobile POS is likely to replace self checkout not service checkout. Recently we tried to use the mobile scanner at Stop & Shop, but none were charged up. In food retailing, we are likely to see younger shoppers and fill in shopping on a customer mobile device. The large weekly or pantry load will be service checkout. This will change the front-end design by eliminating self scan, but will need a communication port to complete the transaction between customers’ mobile devices at the store.

Other forms of retailing will change as well. Self scanning is not an appeal, but personal scan could be.

Ted Hurlbut
Guest
Ted Hurlbut
10 years 3 months ago

I think David makes some excellent points as do the other panelists. My takeaway is that different solutions are going to be appropriate for different retailers and retailers in different categories. Apple is an excellent example of why mobile POS is likely NOT to be right for many retailers, just as self-serve POS works well in many segments but would make no sense for Apple.

Here in the Northeast, Stop & Shop has experimented with mobile POS. I don’t have any specific knowledge of how that testing has gone, but I know when I tried it several times I didn’t like it. It was enough to navigate a cart in the aisles without keeping track of the hand-held.

There’s also a loss-prevention component to this issue. For many retailers, a cash-wrap isn’t just a logistical preference, it’s an LP necessity. That factor alone is likely to slow the penetration of mobile POS.

Herb Sorensen
Guest
10 years 3 months ago

It is not a question of whether traditional checkouts will become obsolete, but simply how will this happen and how soon. The growing convergence of online, mobile and bricks-and-mortar retail will lead to full automation of the checkout, with human intervention from store staff, only for problems and facilitation. Of course, it is still self-checkout at this stage, but Tesco rolled out Fresh & Easy with 100% self-checkout–NO traditional checkstands. Eventually, when you leave the store, you will be automatically charged for whatever you take with you–shoplifters, too!

Dennis Seah
Guest
Dennis Seah
10 years 3 months ago

Mobile POS should be used as a complimentary fleet to the traditional POS. While retailers may replace some of the traditional POS or deploy mobile POS for queue busting, the challenge of Mobile POS is that of a selling image and how the brands may want their customers to feel when they made the decision to purchase.

Mobile POS could also be a great tool for a personal shopper selling concept and then to complete the transaction with the VIP in the comfort of a lounge.

Traditional POS will continue to have its relevance and dominance but Mobile POS should be brought in as appropriate to compliment and provide as consistent a selling experience as the current POS over a counter.

Shilpa Rao
Guest
10 years 3 months ago

I think it’s unfair to compare mobile POS to shopping online. With barcode scanners or enhanced versions of barcode scanning applications embedded in the handheld device and with network connectivity improving across the globe, mobile devices are here to stay.

Mobile POS not only does what a traditional POS would do, but does more. Several of our customers have integrated several devices and applications, like workforce management in one held device. If designed right, they could scan items out as fast as the traditional POS would, however, without the long queue.

Yes, I agree, it would take couple of years for the architecture to mature and become as robust as the traditional POS , but there is no denying the fact that soon the traditional POS would become obsolete.

wpDiscuz

Take Our Instant Poll

What’s the likelihood that mobile POS will eventually lead to a significant reduction in traditional full-service checkouts?

View Results

Loading ... Loading ...