“The trends in POS are following trends in the marketplace in terms of the downturn of the PC related hardware and the absolute radical uptake in mobile and smart devices,” says David Tyc, sales and marketing manager of Island Pacific.
“In the last two to three years the penetration of these devices has been phenomenal, especially the hardware in the point of sale arena,” he said.
The traditional POS market is changing its design and style to more closely resemble smartphone and tablet devices, and this increasing array of Apple and Android-based operating systems is leaving retailers spoiled for choice.
Local electronics retailer, JB Hi-Fi currently uses personal digital assistance (PDA) devices with its floor staff. Handheld PDA devices used by sales staff are able to store large volumes of information, research pricing, provide product information and check inventory all with the click of a button.
According to Stephen Duncan, product manager retail and CRM at Pronto Software, this new streamlined process is making the checkout process a lot easier for both retailers and consumers.
“JB Hi-Fi staff have their PDA devices in hand on the floor, where they can see prices and devices,” explains Duncan.
“They can then hold those sales and take it to the counter to finish that sale. This new process is sort of streamlined – they do all the hard work on the floor with the customer and then the customer goes off to make the payment at the counter,” he said.
In November 2012, PayPal launched a new instore payment system, PayPal Here. The first retailers to trial the new system in Australia included Mexican food chain, Guzman Y Gomez; fashion retailer, Glue Store; Bakery chain, Sonoma Bakery; and educational retailer, Crayons. Already in the US and expected to launch in the UK next month, the system allows customers to sign into their PayPal account via a mobile app while in store.
Once ‘checked in’ and registered with the retailer, customers can order and pay for products through their account while at the store counter.
The app allows consumers to transact directly from their PayPal account, eliminating the traditional options of cash and Eftpos payments.
“The big difference is that as a consumer you are using your own personal device to transact and pay, you’re not entering your personal details into a pin pad,” says Tyc of the system’s advantages.
Plenty of options Retailers now have the option to choose POS systems that work for their brand and more importantly suit their target demographic.
“I think a lot of the younger generations feel a lot more comfortable with PayPal as an option than Eftpos,” said Tyc. “It works for retailers like Glue that have that young demographic and are looking to distinguish themselves to have an edgier, more modern image out there when it comes to technology.” But Tyc warns a system that may work for one doesn’t necessarily apply to all, retailers need to choose a system that suits all aspects of business.
“It’s the normal rule with anything, don’t jump straight into new technology. It’s one thing having new technology but you have to really make sure that technology works within your operations.
“You may need to take a step back and say ‘how will our internal operations adapt to this new technology?’ There could be re-training issues and you may even have to change your store’s fit out.”
The hardware This year is expected to see a rise in Near Field Communication (NFC) devices such as Eftpos cradles, more advanced Customer Relationship Management (CRM) systems, and an increase in loyalty program initiatives including digital receipts. Eftpos cradles, commonly used by banks, allow customers to process and finalise an Eftpos transaction using their own personal iPhone or iPod Touch.
With cash registers on the way out, receipts may soon be the next to follow. Many retailers are now starting to follow the footsteps of retail giants such as Apple and its digital receipts, however, as Tyc says, new technologies should not be rushed.
“When people are walking out of the store how do you check their docket? It’s all these little things that need to be taken into consideration and thought of when implementing new technology – don’t rush into it,” advises Tyc. Richard Otten, national sales manager, Toshiba TEC Australia, agrees: “Any new idea must be reliable, enhance productivity, and give the store owner the result they are looking for”.
“There are many stores trying new technology which is failing in one or more of these area,” Otten says. “Trying a new technology or idea is not necessarily a mistake. Only through trying can the benefits of an idea be proven,” he adds.
But for Otten, this year will more than likely see POS technologies prosper in the hospitality and grocery markets thanks to the increasing popularity of self serve checkouts used in both Coles and Woolworths across Australia.
“Unfortunately there are no significant signs of improvement for the specialty retail market, but hospitality and grocery are doing well. This means that we are likely to see more adoption of new technology in [these] markets.”
Crossing over It’s not just physical POS systems that are seeing a transformation, with more advanced online processes also predicted to boom this year.
For Matt Bullock, founder and CEO of online payment gateway, eWAY, online-based POS systems are seeing an increase towards mobile payments too.
“There are more people sitting in their lounge rooms at home and shopping online. There are far more tablets out there now and is it a far way easier to shop than sitting at the computer logging in,” Bullock explains.
Because of this more retailers are investing in fraud protection tools.
Like physical POS systems, online retailers want to provide a simple and systematic checkout system for customers.
More e-tailers are seeking systems that keep customers on their sites for the payment process instead of being transferred to a bank’s webpage.
“Merchants aren’t really liking that you transfer domains, so you go from the site you are buying from over to the bank’s site,” says Bullock.
“For the consumer the whole experience is then easier, in that you are buying from the merchant and you stay on the merchant’s site for the whole time,” Bullock says.
Brands Exclusive and Catch of the Day are two e-commerce sites Bullock believes have strong online gateway systems.
“They have done amazing efforts to build what they have done. They are constantly reinventing what they do on the back end and they’re very focused on the whole user experience – just trying to make it as simple as possible to check out and purchase.” “All the big guys are doing something, and really trying to make the optimum experience to buy, and make it as simple as possible… they wouldn’t be the size they are if they weren’t doing that.”
Spending strangled Despite Australia being seen as one of the leaders in POS both physically and online, many retailers are hesitant to spend big.
The current unstable retail climate is delaying the investment required by merchants to update their POS systems, causing them to use outdated technologies while they wait for conditions to improve.
“There are adapters and adopters. I think we like to adapt. Australia likes to adapt technology when it comes in. We’re the first ones to run out and get the new phone and things like that but then all of a sudden it’s a case of, ‘well how much do I have to spend on it for business?’,” says Pronto’s Stephen Duncan.
“Everyone wants to do it but no one wants to drop the bucks yet,” he adds.
“We’re a smaller country and when we make decisions we have to be sure and we have to be confident that they are going to follow through.
David Jones has only now released their omni-channel eco-system. “I don’t think our heads are in the wrong place, it’s our wallets that are holding us back.”
Bullock says: “There’s a chunk that just haven’t invested the money in online in their website and process systems as they have in bricks and mortar. The shopping experience is just not there.”
“For those hesitant to change their gateway system, research shopping carts and choose a new cart suited to your business. Ask, what can or can’t it do for you? Also, be sure to take into account any potential threats to your system, understand what the fraud risks are, and put steps in place to manage it.”
“Don’t cut corners on it, spend money and go to a good design agency, go to someone that has built big brand sites and learn from them,” he advises.
Bullock also suggests ‘calling around’, he says: “find out that there is a real person on the other end of the phone and get a real feel for what the product is.”
“Quite often people try and build their own cart but it is a monster job and there’s no point reinventing the wheel when there’s already hundreds out there.”
* This article first appeared in Inside Retail Magazine. To subscribe to our bi-monthly glossy magazine, click here.