Through a special arrangement, presented here for discussion is a summary of an article from Retail Paradox, Retail Systems Research's weekly analysis on emerging issues facing retailers.
In a recent study, RSR found that for 74 percent of retailers queried, the top business challenge is that "consumers expect retailers to provide a more seamless omni-channel experience." But that challenge, at least as it relates to payments, is complicated by the different speed of adoption coming from consumers in different channels.
RSR recently conducted interviews
with retail executives to understand the impact of consumers' cultural differences
on retailers' payment offerings.
Here's
a sampling of what we heard:
- "The payment world [in any channel] is driven to some level by what the consumer expects. They're not evolving very quickly in the store environment. But they are [evolving quickly] online." - Director of IT
- "Our demographic expects us to keep up with them and they move very quickly. While I don't expect many in-store customers to use PayPal [mobile] in the short term, we get tons of positive feedback for being so forward thinking and customer friendly." - CEO
- "That 90 percent of our in-store customers opt for an email receipt
shows that customers are more than ready to embrace eCommerce functionality
in a retail setting." - CEO
With payment systems shifting from cash and checks as the primary tender in favor of credit and debit, stored value and gift cards, and even innovative payment structures like PayPal, eBillMe and new form factors (for example "smart" mobile phones equipped with near-field-communications for contactless payments), a larger question looms: What is the future of point-of-sale (POS)?
POS, as we have known it (that expensive, stationary collection of gear physically attached to a LAN and back-office redundant controllers), is there to do two things: 1) decrement inventory, and 2) take money.
Consumers who shop at the Apple Store have experienced where the physical and digital worlds meet -- mobile POS. Apple's iPod touch POS system enables store employees to quickly check inventory, accept a credit card transaction and issue a digital receipt right on the sales floor. That functionality is fundamentally no different than a web-based customer order process. Since late 2009, rumors have circulated that Apple will sell its POS system to other retailers. In the meantime, other technology companies have emerged that want to enable Apple-like capabilities.
Retailers should ask themselves, "Why not?" Payment systems are traditionally the most over-engineered part of a POS system, because retailers never want a piece of technology to get in the way of taking customers' money when it is offered. But the truth is that mobility works for payment handling and gets better every day. That's 50 percent of the traditional POS system's functionality. For the other 50 percent (decrementing inventory) to "go mobile," solutions providers and retailers need to deliver a scalable, fast and cost effective alternative to stationary scanning and tie that to the customer order fulfillment rules used in non-store channels. When that happens, in-store POS will be a part of a consistent customer order management across all the channels -- and omni-channel payment processing will have led the way.