- Level 10

JUNE
2014
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Charting the Path That Links Technology and Business Goals
Delivering a New
Level of Customer
Engagement Through
Next-Generation POS
Today’s technology-savvy shoppers are connected to a retail brand in many ways beyond a store’s four walls. So
many, in fact, that it has become both a major challenge for
retailers to do it successfully, as well as a new opportunity
if you get it right. The challenge is that consumers believe
stores should deliver the same “anything, anytime, anywhere” experience they get online when they visit a store.
The opportunity is that by adopting a flexible, full-featured
point-of-sale (POS) platform retailers can actually deliver on
this powerful promise. Next-generation POS platforms are
able to support personalized selling functions, provide access to enterprise inventory visibility and CRM data, and
integrate with a wide variety of touch points throughout the
store to deliver a new level of customer engagement.
SPONSORED BY
Deli veri n g a N ew L evel o f C u s t o me r E n g a g e me n t t h r o u g h N e x t- G e n e r ation POS
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T
33.6%
More than onethird of retailers
are either upgrading POS right
now or will begin
upgrading by the
end of the year.
Source: RIS News,“24th
Annual Retail Technology
Study: New Direction
for Retail”
he point-of-sale (POS) system has always been
described as the central nervous system of the
retail store since it first debuted in the 1970s. It
not only acts as the engine that executes customer
transactions, which is an essential role in itself, but
it also feeds data to more than 30 departments and
applications throughout the enterprise. Financial
services, marketing, merchandising and the supply
chain are all virtually dependent on POS data that is
sent in overnight batches or trickle fed throughout
the day.
Just as importantly, the POS occupies a place of
unique importance in the retail landscape because it
comes into play during a crucial shopping phase —
during the shopper’s in-store search, browsing and
purchase phases. If a retailer believes it is strategically
important to optimize every tool available to influence
the last mile of the shopper’s journey — and most do
— then the POS will continue to play a critical role.
For these reasons, POS upgrade activity is currently
at historically high levels in the retail industry. More
than one-third of retailers (33.6%) polled in the RIS
News “24th Annual Retail Technology Study: New
Direction for Retail” are either upgrading POS right
now or will begin upgrading by the end of the year.
This is a sizable slice of the industry. It is an especially impressive figure when you consider that replacing the POS is nearly always the largest single
tech investment a brick-and-mortar retailer will make
within the tech stack.
With so much POS activity taking place, it is a good
time to look at critical factors and milestones to consider when the time comes to embark on a POS upgrade journey.
Deli veri n g a N ew L evel o f C u s t o me r E n g a g e me n t t h r o u g h N e x t- G e n e r ation POS
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Untether POS from Fixed Stations
%
50
The percentage
of retailers who
say they will
deploy mobile
POS in two years.
Source: RIS News/IHL Group,
“11th Annual Store Systems
Study 2014: Store Reinvented”
Fixed checkout lanes and cash-wrap stations are
not going away, but retailers understand that
mobile POS opens up a new world of options, especially for sales associates to deliver better customer
service when and where it is needed.
For example, mobile POS systems can help speed
up checkout during heavy-traffic hours (line busting)
or take payments outside the four walls of the store
during special promotions and seasonal events.
Mobile POS can do price checks in an aisle at the
moment a customer needs it, plus it enables associates to access a host of sales support applications that
range from loyalty programs to checking up on a customer order in transit.
Other important mobile POS functions include saving the sale — the ability to place an order and take
payment for a product that is not in the store because
it is out-of-stock or because the product is not normally part of the store’s assortment mix but is available in
other channels.
Mobile POS should also be able to manage split orders with a single swipe of a credit card. For example,
if a business outfit’s pants are in stock but the shirt is
out-of-stock, the mobile POS should be able to accept
payment for both items while enabling the shopper to
walk out of the store with the pants and then receive
shipment of the shirt at home.
The number of retailers who say they will deploy
mobile POS in two years will quintuple, according
to the 2014 RIS News/IHL Group “11th Annual Store
Systems Study 2014: Stores Reinvented.” Today, 10%
of retailers say they have fully rolled out mobile POS to
their stores. If retailer projections are correct, the figure
will rise to 50% in 2016.
Deli veri n g a N ew L evel o f C u s t o me r E n g a g e me n t t h r o u g h N e x t- G e n e r ation POS
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INDUSTRY INSIGHTS
“Companies have
to determine how
to bring their POS
and e-commerce
platforms together to
process sales under
a single brand, not
through individual
channels.”
J ohn Pru ban
pre sident, L evel 10
Level 10 is one company, everything IT. With increasing IT challenges, we recognize retailers
need fewer partners to do more.
By strategically bundling our
services—hardware procurement,
software development, asset management, maintenance, field technician support and service desk
support—we act as an extension
of retailers’ IT teams throughout
their technology and mobile deployments, store openings/closings/remodels, and in-store support work.
RIS_RoadMap_0614_Level10.indd 4
Navigating a Flexible POS to Support
Seamless Cross-Channel Shopping
Q: What customer service trends are prompting retailers to take a harder look at
the service their point-of-sale (POS) delivers?
John Pruban: If I had to sum it up, I would say the customer expects to shop on his or her
own terms. This could be buying online and returning merchandise in-store, or searching for
product on mobile devices while shopping in store aisles. This trend is conditioning customers to expect more personalized and informed service in-store.
Meanwhile, brand loyalty is declining due to increasing usage of digital touch points,
yet, there are growing issues around privacy. Cutomers also want to mix new, innovative
solutions with traditional needs, such having options around how they want to pay for
purchases. Retailers need to have solutions ready.
Q: What challenges are retailers still facing with their existing POS systems, and
how are these issues jeopardizing service and customer loyalty?
Pruban: Retailers’ biggest problem is their inability to migrate off of a legacy platform.
Retailers have a good grip on where they want to go and how to address the customer
better. When discussing the physical systems, the key is to look to how form factors are
evolving and how fast it is happening. The inevitable form factor is mobile. It is not a matter
of how it will happen, but when.
Q: Knowing that POS is considered one of the most expensive IT investments and
undertakings, what role has the sluggish, often volatile economy played in upgrade
decisions?
Pruban: The economy has definitely played a role, but there are two perspectives on its
impact. First, the sluggish, volatile economy has had a hand in slowing upgrades of existing
hardware. Conversely, because of the volatile economy and the need to integrate new POS
technology, more cost-efficient mobile deployments have increased.
The downside of this expansion is that many mobile POS deployments may have been
done hastily, or less thought out in hopes of making the technology available to shoppers.
And companies are torn on the proper path to follow. There are plenty of companies still
waiting on the sidelines to see how mobile plays out, and to learn how to best implement
the technology in a POS setting.
Q: Looking ahead to a more flexible POS, what does this configuration look like?
What are the pre-requisites or criteria that retailers have for a new system?
Pruban: Retailers have to take traditional POS hardware and replace it with a mobile ecosystem. It is a form factor that allows users to detach that tablet and use it to engage shoppers throughout the store. That is the physical side of the technology.
Then, from a software perspective, companies have to determine how to bring their
POS and e-commerce platforms together to process sales under a single brand, not
through individual channels. That still remains a challenge.
Q: If you had to define three best practices that retailers should implement when
adding a next-generation, flexible POS system, what would you advise?
Pruban: The first one is to partner with an agnostic solution provider that can assess and
strategically advise on the POS system and beyond, because they will be able to consolidate
the process of research and testing.
The second is companies should consider how to create a terminal that supports both
traditional and mobile transactions. Every retail environment is different. Some cases are
great for mobile technology, but others may not be. Segments that require merchandise
bagging and removing loss prevention tags may not work seamlessly with mobile. Retail50
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Tap into the Power of the Enterprise
65%
The percentage of
retailers that are
responding to
consumer demand
by providing enterprise applications
through the POS
to deliver better
service as a strong
defense against online-only
retailers.
Source: EKN Research, “State of
the Industry Research Series: The
Future of the Store 2013”
In the past, the POS was primarily a sender of
data that was used throughout the enterprise,
but increasingly it is becoming a receiver of enterprise
data as well. To deliver the high level of service that
shoppers demand, it is important for the POS to be
able to access such key information as inventory visibility, loyalty program profiles, previous purchases by
the customer, and other CRM information relevant to
specific shoppers. This information can be displayed
at either a fixed POS station or on a mobile POS device
and be used by sales associates while they are talking
to shoppers.
Savvy retailers often merged shopper information
into an application (often called clienteling) that sales
associates access during customer engagements.
Used successfully, clienteling applications optimize
upselling and cross-selling opportunities by enabling
associates to make highly relevant and personalized
suggestions during the last mile of the shopper’s journey. Intelligent suggestions made at this time have
proven to have a high conversion rate.
Beyond clienteling, retailers are looking for their
next POS to deliver overall sales support. This might
include delivering information about competitive pricing, deep product information, a catalog or lookbook
of photos, and customer ratings and reviews depending on the retailer’s market niche. Making enterprise
information like this available through the POS will
give associates the tools they need to do a better job.
By giving associates the power to tap into applications through the POS, retailers are satisfying a deep
customer desire — to get service from a knowledge-
Deli veri n g a N ew L evel o f C u s t o me r E n g a g e me n t t h r o u g h N e x t- G e n e r ation POS
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3 Tips to Rethink
POS Strategy
1
Reimagine stores as
a hub for delivering digital
experiences.
2
Weave digital experiences
into the physical fabric
of the store.
3
Use applications to
combine human intuition
with data-based consumer
insight to create a
personalized relationship
with the customer.
Source: EKN Research, “State
of the Industry Research Series:
The Future of the Store 2013”
able sales staff, which was chosen by 65% of retailers
who say they want to build a strong defense against
online-only retailers, according to the EKN Research
“State of the Industry Research Series: The Future of
the Store 2013” report.
Integrate the Power of E-Commerce
There is no doubt that shoppers love the infinite
options and convenience of e-commerce, but
these benefits are still no match for the immediacy
and personal experience found inside a store. Merging the best elements of both channels is the goal of
modern retailing and multi-channel POS is a critical
enabler of this strategy.
Shopping lists, for example, were pioneered on websites but they have now become a way to offer shopper
convenience and drive sales. Advanced retailers enable
shoppers to create shopping lists at home or on smartphones and then access them through the POS either at
a fixed station or through a mobile device.
This is an online-inspired convenience that enables
grocery shoppers to pickup recurring or fill-in products
for the household. Retailers in the gift category use it
to build wish lists in the POS to make it convenient
for shoppers to give gifts for weddings, house warmings or other special occasions. Home goods retailers
use it to create wish lists for back-to-school products
to make it easy for friends and families to make sure
students are well stocked for the school year.
Of course, the POS should be able to access the corporate website to check online products, prices and
offers to level the playing field with smartphone carrying shoppers. Some retailers are adding more sophisticated online capabilities to their POS solutions like
Deli veri n g a N ew L evel o f C u s t o me r E n g a g e me n t t h r o u g h N e x t- G e n e r ation POS
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21%
The increase in
profit that retailers say they receive
from omnichannel
shoppers compared
to multi-channel
customers.
Source: RIS News,“2013
Cross-Channel Tech Trends
Study: Understanding the
Retail Singularity”
competitive price checking and matching.
To help stores deliver a more online-like experience,
the EKN Research report “The Future of the Store
2013” advises retailers to re-organize their strategy,
people, processes and POS technology to:
1.Reimagine stores as a hub for delivering digital
experiences.
2.Weave digital experiences into the physical fabric of the store.
3.Use applications to combine human intuition
with data-based consumer insight to create a
personalized relationship with the customer.
Integrate Omnichannel Services
What happens when a customer walks into a
store to pick up an online purchase? The first
thing she does is go to a cashier to check the status of
her order. Can your POS access this information or is
the cashier instructed to tell her to go somewhere else
to get her question answered? What about returns of
online orders? Can credit be given in any checkout
lane or are multi-channel customers treated like second-class shoppers and redirected?
Next-gen POS systems are able to access purchase
information from any channel and treat their best customers with the level of service they deserve. Or at
least it should, because omnichannel shoppers are
21% more profitable than single channel customers,
according to the RIS News “2013 Cross-Channel Tech
Trends Study: Understanding the Retail Singularity.”
However, to make this happen in an accurate, repeatable and scalable way, retailers will be required
to consolidate disparate inventory and order management databases and tightly couple them with the
Deli veri n g a N ew L evel o f C u s t o me r E n g a g e me n t t h r o u g h N e x t- G e n e r ation POS
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POS. Currently, 40% of retailers still struggle with consolidation and integration of back-office functions, according to “Customer Desires Vs. Retailer Capabilities:
Minding the Omni-Channel Commerce Gap,” a report
from Forrester Research.
The goal of many retailers is to convert sales associates into trusted advisors that do more than simply
ring up sales. The key to making this happen is to provide associates through the POS with all the power
that shoppers have when they walk into a store armed
with a smartphone that connects to the infinite options
available online.
Shift from a POS Solution to a
Transaction Platform
Number of retailers
who struggle with
how to integrate
back-office technologies across channels.
Source: Forrester Research,
“Customer Desires Vs. Retailer
Capabilities: Minding the OmniChannel Commerce Gap”
As retailers make multi–year plans and prepare
for a POS solution that will take them into the future,
they understand that a POS model that was originally
designed to serve stores as the primary channel in the
retail organization will no longer be functional in the
omnichannel world.
Instead, retailers will need a new approach that operates with omnichannel retailing at its core. To achieve
this new approach, many retailers (31.6%) envision
a hybrid commerce model emerging that converges
POS and e-commerce functions into a single transaction platform, according to the RIS News custom research report “Your Last Traditional POS.” Another
13.2% of retailers envision a hybrid transaction platform where POS assumes the central role.
There are other POS platform models emerging on
the horizon including some where the e-commerce
engine assumes the central role in a unified transac-
Deli veri n g a N ew L evel o f C u s t o me r E n g a g e me n t t h r o u g h N e x t- G e n e r ation POS
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Charting the Path That Links Technology and Business Goals
Requirements
Every major business initiative requires a detailed assessment that examines the project’s impact on internal processes, technologies, personnel, strategic alignment and
costs. One goal of the assessment is to identify granular and high-level requirements
that are essential elements in the project’s game plan. Managing and addressing these
requirements is critical to success.
Requirements for
Next-Generation POS
Strategy
• Break down silos between channel-specific IT architecture, and
replace with a single operating platform that all customer touch
points, including next-generation POS, operate on.
• Define POS goals from an enterprise omnichannel perspective to
ensure that that all customer touch points, both inside of the store
as well as digital options, operate consistently and offer the same
services.
Technology
• Create a master data file that synchronizes mission-critical information from various business sources, make it accessible to multiple lines of business.
• Adopt a single operating platform that manages enterprise-wide
retail systems so they can deliver a truly transparent omnichannel
business model online and in-store.
• Adopt mobile devices to engage shoppers anywhere in the store,
and manage the shopping experience from product discovery and
research all the way through tendering and procurement.
Personnel
• Chief executives and senior management embrace the transition
from transaction-based POS to engagement-based POS.
• Appoint an “enterprise customer engagement leadership team”
that will manage this next-generation, all encompassing engagement business model and integrate all lines of business — and
back-end systems — on a single platform.
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tion platform, and some where there is no POS at all in
the equation. In these latter models, the e-commerce
engine is fleshed out to handle store transactions and
serve stores as a POS system in the cloud.
Every retailer’s journey to a future POS system will
be different, but the winds of change are blowing and
the traditional POS model, which has served retailers
well for 40 years, will no doubt operate more like a
platform of inter-operable enterprise applications than
a point solution that specializes in performing a discrete function.
Conclusion
Thanks to their growing adoption of personal
technology, today’s shopper is demanding a
streamlined shopping experience both online as well
as inside the store. As a result, existing POS systems
need to do more than process store-level sales.
Retailers need to shift the focus away from a narrow transaction-based POS solution toward a flexible,
feature-rich platform that can support and enhance
an intimate, all-channel shopping experience. While retailers and software
vendors are still exploring how to
Retailers need to shift their
make this happen, and do it in a
focus away from a narrow
way that ensures security and
transaction-based POS solution
toward a flexible, feature-rich
accommodates new payment replatform that can support and
quirements, they understand that
enhance an intimate, all-channel
shopping experience.
the traditional POS model they use
today will not be the one they use tomorrow.
Deli veri n g a N ew L evel o f C u s t o me r E n g a g e me n t t h r o u g h N e x t- G e n e r ation POS
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Charting the Path That Links Technology and Business Goals
Roadmap KPIs Infographic
Omnichannel Inventory Optimization
Untether POS from Fixed Stations
Tap into the Power of the Enterprise
Integrate the Power of E-Commerce
Integrate Omnichannel Services
Shift from a POS Solution to a Transaction Platform
33.6% 21%
More than one-third
of retailers are either upgrading POS
right now or will
begin upgrading by
the end of the year.
Source: RIS News,“24th
Annual Retail Technology
Study: New Direction
for Retail”
The increase in
profit that retailers say they
receive from omnichannel shoppers compared
to multi-channel
customers.
Source: RIS News,“2013
Cross-Channel Tech Trends
Study: Understanding the
Retail Singularity”
Number of retailers who
struggle with how to integrate back-office technologies across channels.
%
50
The percentage of retailers
who say they
will deploy
mobile POS in
two years.
Source: RIS News/IHL
Group, “11th Annual
Store Systems Study
2014: Store Reinvented”
Source: Forrester Research, “Customer Desires Vs. Retailer
Capabilities: Minding the Omni-Channel Commerce Gap”
65%
RIS_RoadMap_0614_Level10.indd 13
The percentage of retailers that are responding
to consumer demand by providing enterprise
applications through the POS to deliver better service
as a strong defense against online-only retailers.
Source: EKN Research, “State of the Industry Research Series: The Future
of the Store 2013”
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