Aberdeen Research: Outdated POS Systems Barrier to Good Customer Service
An Aberdeen global survey of 175 retail companies in January 2008 has found that at least 60 percent of retailers have POS systems that are older than 5 years. Of those, 35 percent are older than 10 years.
The use of legacy POS system at retail checkout can be a frustrating experience for customers as order management, loyalty programs, and payment acceptance processes are fraught with delays.
Key procedures fulfilled at the POS include scanning of products, applying loyalty credits, and promotional offers such as coupons and payment processing. Aberdeen's November 2007 report, The Roadmap to Successful Contactless Payment Implementation, showed that the average time taken to complete a transaction from scanning and bagging to payment by Best-in-Class companies is one to three minutes. However, complex and time-consuming transactions are resulting in longer than average wait times for customers as a result of longer payment processing times, poorly designed POS interfaces, and legacy system malfunctions. These delays cause customer dissatisfaction.
Forty-seven percent of the retailers surveyed in Aberdeen's January study identified complex and time-consuming POS checkout procedures as the major pressure impacting the customer POS experience.
In Aberdeen's analysis, outdated POS systems have created a large gap in the retailer's objective of delivering customer satisfaction through three POS tenets: multi-channel order management; loyalty programs; and faster payment options for customers.
POS capabilities and technology go hand-in-hand in building a customer-centric POS environment. Aberdeen's results show that any upgrade plan for POS systems has to include a combination of software, hardware, and peripherals.
In the area of order management, software with multi-channel functions and 2-D barcode scanning technology can make populating and processing of orders, returns, and exchange more simplified.
From a payment standpoint, more mobile POS and universal Pin-Entry Devices (PED) are likely to find their way into retail stores to broaden the payment form factors and customer checkout choices. While mobile POS should enable faster checkout, universal PEDs can facilitate wider, safer, and easier payment options for customers.
The third major cog within POS customer process management is comprised of customer loyalty programs such as rewards and targeted promotions, gift cards, and guided selling, which are also expected to see an uptake in planned use amongst retailers. It is important to note that while improvement in order management and payment technology will likely have the greatest impact on customer satisfaction, loyalty-related initiatives hold the maximum potential to directly impact future revenue growth in stores.
Discussion Questions: Do you agree that complex and time consuming procedures pose the biggest challenge to good customer service at checkout? Which areas of improvement in POS systems do you think would yield the greatest short- and long-term results for retailers?