A RetailWire mPaper.  Underwritten by iQmetrix.


POS Transformation:

Choosing a next-gen POS solution to revitalize your in-store experience


Introduction: A critical new omnichannel role for POS

As retailers reinvent the in-store experience for the omnichannel age, “Point-of-Sale” is being redefined in much broader terms. Retailers must now consider POS’s potential role in improving virtually all aspects of the customer experience — from giving associates the ability to recognize their best customers to providing history-based product recommendations and key performance metrics.

Riding the Wave

The digital tide is washing across retail. The innovations forged by Amazon and social sites like Facebook, Snapchat, Instagram and Pinterest are rewriting the customer experience playbook. These platforms are integrated into shoppers’ lives and, increasingly, their shopping journeys. For stores to achieve a comparable level of intimacy at the point of sale would be a dream come true. But, at this new digital party, most store operators feel like wallflowers waiting for an invitation to dance.

While U.S. e-commerce sales accounted for just over 8 percent of total U.S. retail sales in the second quarter of 2016, according to the U.S. Census Bureau, the influence of digital channels on in-store activity is of critical concern to retailers. Deloitte’s latest Digital Divide study found that 56 percent of all store sales are influenced by a digital interaction.

Completing the touchpoint loop

tenser-175x175“Since shoppers choose to combine touchpoints in various ways when making purchase decisions, it’s important that all touchpoints play off of a common experience platform,” says James Tenser, principal, VSN Strategies.

Physical store operators now understand how critical POS interactions are completing omnichannel shopping cycles. Today’s consumers expect to speed through shopping research at whatever digital touchpoint is convenient and, if desired, complete their purchases at a store or via a digital connection. In-store pickup of online-ordered goods has also become critical to maintaining customer loyalty. Yet, due in large part to doubts about investing further in physical stores, in-store technology has lagged behind the progress made in the digital realm.

In this m•Paper, we offer an actionable guide for those envisioning a next generation POS system. We’ll highlight the features to look for — innovations that will keep your stores vital for your current and future omnichannel customers.

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How legacy POS systems are impeding progress

At a time when “seamlessness” is the imperative, POS legacy systems are proving to be major obstacles to progress.

  • Legacy POS, often siloed from other enterprise systems, adds considerable inefficiency and inaccuracy to many retail processes;
  • Unlike new gen POS systems that are built on open platforms, integrating legacy systems usually requires costly workarounds;
  • Examples of shortcomings include: inventory information that is not kept updated nor synced with e-commerce, ERP and finance systems;
  • Further, pricing and other product information becomes outdated, requiring staff to revise information in multiple locations without being sure which version is accurate;
  • Adapting legacy systems to technology such as EMV is a much more involved process. With new open systems, retailers can push new technology and applications into the enterprise much faster.

New POS advancements to look for

“I would like to see POS systems operate much like the best e-commerce websites — in a predictive, personal, responsive manner,” says Laura Davis-Taylor, EVP Customer Experience, MaxMedia. “Great e-commerce sites like Amazon know who you are, what you might like, how you like to be communicated with, how you like to be rewarded and even when you are most likely to want to search and buy. They aren’t pushy or insistent — they are helpful, always waiting in the wings to provide the best experience possible for your ‘unique you’.”

The latest innovations in POS technology mirror these customer experience objectives and they do so, in the best of cases, by tying into the very same inventory, logistics and CRM platforms that drive a company’s digital channels.

Intuitive interface design:

As with the consumers they serve, today’s retail associates have high standards when it comes to anything clickable or swipe-able on a screen. Look for a POS user interface (UI) that presents clean, appealing layouts and responds quickly and fluidly. If associates can learn the new UI as quickly as a new social app, retailers will minimize training time and boost store productivity.

Mobile device empowerment:

New POS systems run on tablets and other mobile devices, unshackling associates from registers so they can guide customers in a highly informed way — and making refrains such as, “Follow me. I’ll find someone to ring you up,” a thing of the past. The new “point of sale” is wherever the customer is located.

Product search, filtering and information:

From Toys “R” Us to Target, retailers are slimming down their stores at a time when consumers are accustomed to the boundless selection of the web. Your next POS system must give associates access to not only shelf and backroom inventory, but also everything available in the company’s supply chain. Fast, intuitive searching and filtering is essential to assure they can provide their customer with the right “fit.”

Real-time, cross-channel inventory visibility:

Increasingly, shoppers check a retailer’s website to see if their desired item is available at their local store, so anything short of clear cross-channel visibility is unacceptable for your new system. When an item isn’t available, the store visit can still be a success. The associate can locate the desired item in the supply chain and assure swift delivery.

Endless aisle integration:

Endless aisle kiosks that allow customers to browse on their own can free staff to focus on more important customer experience matters. If customers are guaranteed they’ll get what they came looking for, endless aisle can be a formula for greater store profitability.

Access to customer profiles:

Drawing on shopper purchase histories and powered by artificial intelligence, personalized product recommendations get more sophisticated every day, and there’s no reason store associates shouldn’t have that data at their fingertips. Imagine expert salespeople armed with these data resources and you have a powerful argument for the irreplaceable value of in-person selling.

Customer service enhancements:

Sometimes it’s the little things that turn customers away. “I’m sorry, he just went to grab a bigger size. We’ll have to wait and finish with his transaction before we can ring you up.” In your next system, look for the addition of seemingly minor but important customer service conveniences, such as the ability to suspend a sale in order to take care of others.

Inventory ordering/fulfillment; auto-ordering:

POS systems should offer store managers real time views of inventory — a huge benefit when looking for slow-moving items that need more push and those in need of more frequent replenishment. Empowering the front line employees with direct responsibility for the store’s performance is a real game changer and a must for your new system.

Advanced inventory reporting:

Bringing demand forecasting and ordering recommendations to store managers can up their game tremendously. Make sure your POS applications allow you to draw on third-party data sources such as seasonality and weather forecasts so you can anticipate hot trends and minimize costly out-of-stocks.

Business metrics:

Gone are the days when retail stores can afford to wait for performance reports to be compiled at HQ and disseminated. In keeping with the same decentralization philosophy as inventory ordering, dashboard views of day-to-day business metrics are a must to develop store staff that is smarter, more motivated and feel more responsible for business outcomes.

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The four essential elements of your next POS system

iqmetrix-mpaper-pfaderPeter Fader, Professor of Marketing, The Wharton School:

“In this day and age, when data, analytics, and technology have advanced so far,” says, “it’s sad that today’s POS capabilities aren’t much different than they were 40 years ago. Let’s change this!”

“The issue is how well retailers will see and leverage these omnichannel crossovers,” he said. “If retailers don’t start thinking ahead to build their businesses in this kind of genuine customer-centric manner — and very few are doing so as a serious priority — then they will fail to capitalize on this seamless movement. Retailers’ willingness and ability to ride this wave could well make or break their overall business model.”

With many chains shuttering stores by the dozens in the past year, a sign that hope is still bright for brick and mortar is that many — including Office Depot, McDonald’s, Kmart, Restoration Hardware and Samsung — have rolled out “store of the future” concepts. Many are investing heavily in POS as part of these initiatives to offer seamless transitions between customers’ digital and physical interactions.

mpaper-sidebar-4Perhaps the most encouraging thing about the new future store movement is the holistic approach these retailers are taking. Solving store problems such as these on a one-by-one basis can be like playing Whack-A-Mole — strengthening one area simply uncovers weaknesses in others. For that reason, retailers should adopt a full-rounded philosophy for using POS to raise store experiences to best-in-class levels.

1. Sales empowerment

The complexity of this new technology can be mind boggling to us humans, but in fact being human is what it’s all about. Retailers should look for POS systems that encourage associates to be themselves; to free them from fixed positions and allow them time to treat customers as individuals. If the UI is intuitively designed, the associate’s mobile POS device will soon become a natural extension of their own experience and selling talent.

hawkins-175x175“Simply displaying data to the cashier to share with the customer is not enough,” says Sterling Hawkins, Co-founder of CART (Center for Advancing Retail & Technology). “The key is getting relevant and actionable information to the cashier on things like welcoming customers back after an extended period, point balances and recognizing them as a top shopper.”

Again, the emphasis here is on ease-of-use. If salespeople have their noses buried in their devices instead of maintaining eye contact with customers, the system isn’t delivering the intuitive help customers look for. Instead, standing “hip-to-hip,” salespeople can use the device to present suggestions to customers, review their loyalty plan options and conduct the payment transaction.

2. Customer intelligence

The best new POS systems present contextually-relevant information, thus informing sales staff as they guide customers through the purchase process. In a typical scenario, a salesperson could begin her day by contacting some of her best customers about current promotions and making reminder calls to those who haven’t visited in a while. When making recommendations on the floor, she can tap into profiles to call up a customer’s favorite styles and colors.

“In the fashion apparel sector especially, but also in high-consideration categories like electronics and furniture, access to information from within the POS interface is a new best practice,” says James Tenser.

Not to be overlooked is the ability of the POS dashboard to give salespeople ongoing updates on their own performance and commissions so they can stay motivated and apply their talents in ways that will further both their own goals and the company’s.

3. Inventory responsiveness

tablet-close-up-over-shop-final“My experiences so far suggest that system-wide inventory visibility is a huge enabler for customer-facing staff,” says Mr. Tenser. “It lets them project competency and say ‘yes’ to more shopper requests — especially exchanges and special orders.”

POS systems that are integrated with the company’s inventory management solution can in effect localize decision making at the store level, resulting in more intelligent stock levels. That added responsibility might seem like a burden for store staff, but intelligent systems keep their work efficient. After reviewing inventory history reports, for example, a store manager might set minimum/maximum levels and auto-generate purchase orders for streamlined order fulfillment.

A system that puts store personnel in the loop on inventory can directly affect customer service as well. Salespeople can search across all the company’s locations, filtering results to more quickly find the customer’s desired item — and then, if need be, arrange for an out of stock item to be drop shipped from another location.

For inventory specialists, the latest systems offer a range of reports to gain various views of inventory movement, such as reports of transfers in and out of individual stores and RMAs (Return Merchandise Authorizations) that might, for example, get to the root of inventory imbalances before they get out of hand.

4. Analytics and insights

Among the evolutionary changes being made by next-gen POS is the ability to inform store managers on broad performance trends so they feel confident in making strategic improvements to the way the store is operated and customers are handled.

Your new system must certainly provide managers with dashboards for quick-glance metrics, with the ability to drill down to see the causes behind trends. Dashboards might also offer map views displaying regional trends so managers can see how they’re doing relative to sister stores.

The metrics now available via POS systems also extend to staffing levels, so that managers can make seasonal adjustments, and reveal customer behavior trends.

“I’m a huge fan of calculating well-validated predictive analytics in real time and encouraging front-line retail personnel to take action based on them,” says Prof. Fader. “The ultimate metric is customer lifetime value, but its underlying components can be just as valuable. For example, gaining an understanding of how much longer the customer will continue engaging with the retailer, how many transactions they’ll make over that span, and the average size of those transactions.”

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iqmetrix-mpaper-ldtaylorLaura Davis-Taylor, EVP Customer Experience, MaxMedia:

“In the physical realm, Ritz Carlton has operated like this for years. Their guests have no clue what magic is happening behind the curtain of their guest systems; all they know is that they consistently have fabulous service that feels custom tailored to their every personal preference.

“How does this relate to POS? My view is that Point of Sale inside of retail stores must now be both transactional and experiential. The technology must be used similarly to The Ritz and tie into multiple databases that fuel experiences that shoppers truly value. In the end, value really is what it’s all about — how to use POS to be more valuable to the shopper so that the shopper will become more valuable to your retail brand.”

Questions to ask your POS vendor

With all the new opportunities available, it’s natural to feel overwhelmed when planning your next POS system. We recommend seeking internal consensus on the four objectives listed above. Once you’re working with that philosophical base, here are questions to help you button down some important technical decisions.

Q: Should we go with cloud-based or installed POS applications?

Advancements in cloud computing are undermining the traditional logic that installed applications give companies better control. The benefits of cloud system architecture can be summarized as: availability, security and scalability. For POS systems — that in this day and age must work compatibly across all retail locations, management offices, DCs and e-commerce centers — cloud-based systems assure that updates roll out consistently across the enterprise, that personnel can jump as needed from location to location, and that security control measures are centralized.

Q: How much weight should we give to intuitive UI?

Budget, of course, is always a concern and at some point, the “nice to haves” may need to be separated from the “indispensables.” But whatever you do, don’t undervalue ease-of-use. POS interface design that makes learning fast (and even fun) can be a huge motivating influence on store staff. Few system improvements go to the bottom line more directly — by keeping engagement high, turnover low and customers coming back for more of the same great service.

Q: How does the EMV liability shift affect our choices?

New regulations put into effect on Oct 1, 2015 shift liability from the card issuer to the retailer if a fraudulent transaction is conducted via a chip card on a terminal not equipped to read EMV. While many mag strip-only credit cards are still in circulation, the chips are taking over, so be sure your vendor can advise you on compliant readers and software that can be updated without great expense as security protocols are revised. Further, even with EMV, malware and other intrusions are still a huge threat, so grill your prospective vendors about these critical capabilities.

Q: How easily will we be able to connect our POS with the rest of our omnichannel platform?

To work seamlessly across channels and functions, connectivity is obviously a must, so be sure your new system has a robust set of APIs and an open-platform philosophy. (This isn’t the place for a “walled garden” approach.) Browse the company’s developer portal for a sense of how easily others are finding it to integrate their POS capabilities with their existing logistics, inventory and marketing management systems.

Q: What level of support can you offer?

The good news is that a new, more intuitive system will require much less instruction from your own training department. And frankly, a vendor with broad expertise and specialized experience is likely in a better position to conduct whatever training is needed. Look for a vendor that provides in-context instruction such as “Help” tabs on all screens leading to phone and online chat support. Also look for a bustling online support community and in-depth resources for in-house or partner company developers.

Finally, great POS systems are evolutionary — they are designed to adapt over time, so look for a vendor that offers workshops and webinars to keep your staff sharp on the latest best practices and orient new team members as they come on board.

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About iQmetrix:

At iQmetrix, we are passionate about retail. Our purpose is to create great experiences for retailers, their employees and the end consumer. Our products bridge the gap between physical and virtual retail channels, offering the latest in retail management and customer experience technology. Our interactive retail solutions, including endless aisle and digital signage, bring elements of online and mobile shopping experiences into the physical store to engage and educate shoppers during the purchase process. iQmetrix POS is a modular system for managing all aspects of a store chain operation, including POS, ERP, inventory, and HR. Based on a platform philosophy, our solutions allow users to effectively manage back-of-house operations and the in-store customer experience. In a nutshell, we give retailers what they need so customers can get what they want. Founded in 1999, iQmetrix is a privately-held software as a service (SaaS) company with offices in Canada, the U.S. and Australia.

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