Optimizing pOS fOr the 21 St century

Optimizing pOSfOr the 21St century

A S U P P L E M E N T T O R I S N E W S M A G A Z I N E

ExAMINING THE ROLE POS PLAyS IN REINvENTING THE STORE ANd bEcOMING MORE RELEvANT TO SHOPPERS

Evolution of thE PoS Platform P2

PoS on thE movE P6 Point of intEraction P10

Be the Pioneer, Be the Leader

POSsupp_0812_v1.indd 1 7/25/12 1:28 PM

2 AUGUST 2012 R I S NE W S WWW.R ISNEWS .com

S E C T I O N

A technology AnAlyst recently pinpoint-ed the difference between retail and other industries by noting that retailers use the same technologies others use, but they also operate stores that require a second and completely different set of technolo-gies. Essentially, the second set of tech-nologies are point of sale (POS) hardware and software solutions that record trans-actions and a host of related applications linking to the POS.

The analyst’s point was that retail can be thought of as having twice the IT complex-ity of other industries and many retailers

evOlutiOn Of the pOS platfOrm


POS has moved far beyond its point-solution roots and morphed into the multi-tasking brain of the store and de facto store-level ERP

B y J O E S k O r u p a

E-commerceplatform

18%

POSsoftware

21%

No single platform (multiplechannel-specific

platforms)61%

Long term primary transaction pLatform

across channeLs

would agree. Beyond that, it is important to note that POS is a distinctive technol-ogy and a defining hallmark of retailing.

But this distinctiveness also makes it a technology and management challenge due to the nature of stores, which are unique to the retail industry. Stores, which are the epicenter of POS functionality, are largely managed as separate and distinct business units despite Herculean efforts to bring them under centralized control. Certainly they are governed by rules set at headquarters and technology is an enabler for exerting a measure of control and compliance.

Nevertheless, the hard truth is that stores still operate with their own staffs, invento-ries and their own on-premises POS soft-ware, hardware and servers. And this also adds to the complexity, especially when the number of stores reaches 3,500 for Kroger, 8,300 for Walgreens, 10,000 for Dollar General and 40,000 for 7-Eleven worldwide.

De Facto eRPTo cope with store counts like this, which can produce hundreds of millions of transactions per year, POS solutions have greatly expanded their scale, scope and capabilities.

Today, full-featured POS software is fre-quently thought of as an end-to-end so-S O U R C E : R I S C R O S S C h a n n E l S t U d y, 2011

PUBLISHERDavid Weinand

904.374.8590 [email protected]

EDITORIALGroup Editor-in-Chief Joe Skorupa

973.607.1369 [email protected] Editor Adam Blair

973.607.1371 [email protected] Editor Nicole Giannopoulos

973.607.1372 [email protected]

SALESAssociate Publisher Catherine J. Marder603.672.2796 [email protected]

Account Executive Lisa Wallace904.217.3489 [email protected]

Account Executive Ashley Ramirez904.834.2248 [email protected] to the Publisher Jen Johnson

[email protected]

OnLInEVP of Online Media Robert Keenan

[email protected] Development Manager Scott Ernst

[email protected] of Lead Generation Jason Ward

[email protected] Event Producer Karen Carvelli

[email protected]

MARKETInG/EVEnTS/CIRCULATIOnDirector, Event Planning Pat Benkner

[email protected], Event Content John Hall

[email protected] Manager Jeffrey Zabe

[email protected]

ART/PRODUCTIOnCreative Director Colette Magliaro

[email protected] Director Lauren Cloos [email protected]

Senior Production Manager Pat [email protected]

Subscriptions 978.671.0449Reprints: [email protected]

212.221.9595

CORPORATECEO/Chairman Gabriele A. Edgell

[email protected] Gerald. C. Ryerson

[email protected] President John Chiego

[email protected]

CORPORATE OffICEEdgell Communications

4 Middlebury Blvd, Randolph, NJ 07869973.607.1300 FAX: 973.607.1395

Member MemberPrinted in the USA

www.risnews.com

TECHNOLOGY GROUP

www.edgellcommunications.com

FOUNDERDouglas C. Edgell

1951-1998

Optimizing pOS fOr the 21St century

POSsupp_0812_v1.indd 2 7/25/12 1:29 PM

E X E C U T I V E S U M M A R Y

Much has been written about the ‘consum-erization’ of retail and the trend around incorporating consumer devices such as smartphones and tablets into the retail environment. But the fact remains that sys-tems made for the often harsh environment of retail stores should remain a cornerstone of technology decisions. Consumer grade or non-industrial devices used in high transac-tion environments or environments where heat, cold, liquids, dust or other airborne particles play a factor are not reliable options and can cause customer dis-satisfaction and loss of sales.

Posiflex, a provider of in-dustrial grade POS hardware for over 25 years, has an-nounced the next evolution in Retail Hardened POS – the Intel® Core™ i series 15-inch all-in-one fan free terminal. As applications become more robust, the amount of processing power and the affiliated heat created by the CPU increases. Heat is a key resulting factor of component failure. The traditional cooling solution has been a fan, but as retailers know, the fan in a terminal can often be the single point of failure because it is prone to take in foreign particles, causing a terminal to rapidly overheat.

The Evolution of Retail Hardened Store Systems

For more information visitwww.posiflexusa.com/builtbetter

Be the Pioneer, Be the Leader

A D V E R T O R I A L

www.R ISnE w S .COM A UGUS T 2 0 12 R I S nEwS 3

This new system has been designed to avoid such issues. Posiflex’s patented aluminum die-cast “heat fin” design as-sures maximum uptime. And through extensive tempera-ture cycling, vibration, drop,

shock, static electricity and emission tolerance testing using a third-party lab to perform the Highly-Accelerated Life Testing (HALT) and Highly-Accelerated Stress Screening (HASS) processes, the Posiflex KS7700 system has proven to with-stand the harshest environments retail can bring.

According to Doyle Ledford, VP of Sales, Posiflex USA, “The market has long needed a terminal that is overbuilt, to over-perform. Retail and hospital-ity customers who required high performance but wanted fan free terminal reliability never had that

New INtel® Core™ I3 / I5 FaN Free all-IN-oNe touChsCreeN elImINates Key PoINt oF FaIlure

choice — until now. The Posiflex 7700 brings the best of both worlds, where power and performance meet the rock-solid reliability required to maximizing uptime and reduce cost. Your business operates 24/7. Your POS terminals should too.”

Key Benefits Include:

• 15-inch retail ready, fan free All-in-One with Intel® Core™ i3 / i5 Series processors runs the most demanding applications coolly with energy saving efficiency• Unique fan free design eliminates potential point of failure and particulate matter intake• Highly versatile for all environments: n Compatible with all current Posiflex peripherals including printers, encrypted or standard magnetic stripe reader, biometric fingerprint reader, keyboards, PIN pads and rear customer displays n Available in projective capacitive with precision-edge design, infrared and re-sistive touch functions n Standard 4 GB of DDR3 RAM, maximum 8GB • Built as a durable, long lasting solution: n Die-cast aluminum alloy housing for maximum heat diffusion and shock resistance

The next generation of Intel® i3/i5 ter-minals is here . www.posiflexusa.com/builtbetter

Posiflex_adv_0812.indd 1 7/18/12 10:57 AM

p O S


lution that is tightly coupled to 40 or more enterprise applications, linking POS data to the supply chain, mer-chandising, financial services, order management, CRM, marketing, e-commerce and all sales channels in the omni-channel world.

Which Raises the question: has Pos become a PlatFoRm?The answer is “yes” in the sense that it is a base of tech-nologies on which other technologies and services are based. Today’s POS software is an agent for connecting front office, back office, headquarters and e-commerce solutions. It is also a hub of interfaces that provide path-ways to enable direct integration with a wide variety of third-party solutions, mobile devices, mobile apps, kiosks and contact centers.

The evolution of POS has taken it far beyond being a point solution or a technology commodity. Today, POS is the multi-tasking brain of the store and the de facto store-level ERP.

When Perry Ellis updated its POS capabilities several years ago CIO Luis Paez wanted it to become a true POS platform that will be completely integrated with other enterprise systems to deliver real-time reporting. “Our ambition was to have one cohesive business across wholesale, retail and e-commerce,” explained Paez dur-ing the project, which ultimately became the POS plat-form he envisioned.

Pos PlatFoRm VeRsus e-commeRce PlatFoRmAs POS evolves into a platform it becomes increasingly married to such advanced technologies as service ori-ented architecture (SOA), master data management, business process management, cloud delivery and Web

TO COpE wITh STOrE COuNTS ThaT CaN rEaCh INTO ThE ThOuSaNdS aNd

prOduCE huNdrEdS Of mIllIONS Of TraNSaCTIONS pEr yEar, pOS SOlu-

TIONS havE grEaTly ExpaNdEd ThEIr SCalE, SCOpE aNd CapaBIlITIES.

services. This level of technological complexity is driven by the need for modern retailers to become true omni-channel businesses.

However, when retailers look five years over the horizon they begin to realize that most of the architectural and functional capabilities they are seeking in a POS platform already exist in large part in their e-commerce platforms.

This has raised the question: Is it possible to eliminate POS as we know it and move all multi-channel transac-tions, including store transactions, to a more robust ver-sion of the e-commerce platform?

According to several studies conducted by RIS the answer to this question is that it is possible, but few retailers are exercising the option. The highest percentage of retailers considering it was in the most recent Cross-Channel Tech Trends Study (2011), where 18% of respondents said they were considering converting their e-commerce platform into their primary transaction platform. A slightly higher 21% said they plan to convert their POS platform into their primary transaction platform. However, the majority an-swer over the past two years of research has been that re-tailers plan to go with a hybrid or merged transaction plat-form (a combination of both) for the foreseeable future.

POS has evolved into a foundational platform to accom-modate its expanded role as the central nervous system for the store, and major evolutionary shifts continue to appear on the horizon, including cloud-based models, thin-client architecture, mobile POS and multi-channel capabilities.

POS is clearly a mature part of the retail tech stack, but its timetable for change is accelerating to meet the fast-moving requirements of the omni-channel consumer. l


POSsupp_0812_v1.indd 4 7/25/12 1:29 PM

ENDTOEND

www.utcretail.com | 800.349.0546

Providing software, POS hardware, and services to streamline your processes, improve efficiencies, and drive growth.

UTC RETAIL’s extensive industry knowledge and

comprehensive solutions provide retailers with the tools to

increase business efficiencies and drive growth. Offering

both fully integrated and best-of-breed software solutions,

we assist retailers in streamlining their merchandise

and customer management processes throughout the

enterprise and across all sales channels. Our solution suite

also includes a robust offering of implementation and

support services for hardware and software, as well as our

own retail-hardened POS hardware platforms. Through

our retail expertise and proven solutions, UTC RETAIL

customers are quickly resolving business critical issues and

continuing to realize ongoing value.

TOP 5 by Mid-Size RetaileRS

■ Quality of Service ■ Overall Performance ■ Product Reliability ■ Administration/Maintenance ■ Quality of Support

software

hardware

service

UTC-Full-Page-Ad.indd 1 3/8/12 12:52 PM

RIS_CGT_Temp.indd 1 7/10/12 3:31 PM


pOS On the mOve

Mobile Pos is A significAnt gAMe chAnger in retAil, for two reAsons. The first is it has some retailers con-sidering whether they can do without fixed POS termi-nals altogether. A wider impact of mobile POS is that it is causing retailers to rethink some of the most basic ways that store associates interact with customers. The second reason it is a game changer is that many mobile POS solutions encompass multiple functions and affect many phases of the shopping process beyond checkout transactions.

Stores are under attack by digital competition that is forcing them to fight and stay relevant. As a result mo-bile POS, a tool that can help stores fight back, is fi-nally getting the attention it deserves. Currently, only a few retailers are committed to broad deployments of mobile POS, but they include some of retailing’s major technology and revenue powerhouses, such as Nord-strom, Sephora and The Disney Stores.

To understand the impact of this trend, we highlight several leading retailers that have deployed mobile POS and examine the best practices of their implemen-tation.

exceeDing FixeD Pos FunctionalityNordstrom has implemented mobile POS devices in all full-line stores, helping to provide a better customer experience in terms of personalization and speed. The retailer is currently at about 75% of the functionality of a register on the mobile devices, and by the end of the year the 6,000-plus mobile POS devices will offer the same level of functionality as fixed registers. By next year they will have additional functionality that is not incorporated on the registers.

FinDing beauty in mobility Luxury retailer Sephora has deployed a mobile POS solution in many of its 280 U.S. stores using Apple iPod Touch devices. The deployment launched in Septem-ber 2011 at the retailer’s headquarters store in New York City’s Meatpacking District. The solution provides mobile customer service with POS and return function-alities, as well as the ability to use remote cash drawers and receipt printers. Integrating POS business functions and tenders, any transaction or experience at a tradi-tional POS device can be driven off of a mobile device.

Retailers deploy mobile POS to enhance the store shopping experienceB y N I C O l E g I a N N O p O u l O S


POSsupp_0812_v1.indd 6 7/25/12 1:29 PM

FOR wasting time… OR busting lines?

is YOuR tablet built

introducing the motion® Cl910 slatemate™ the serious tablet for serious Retailers.Customers will no longer wait. For information. For service. Even to purchase. That’s why smart retailers are turning to the Motion® CL910 SlateMate™. With Magnetic Stripe Reader and Barcode Scanner, Motion’s latest generation of the CL-Series line of tablet PCs delivers optimized mobility, durability and connectivity to improve customer satisfaction and increase productivity in retail environments. Running Microsoft® Windows® and powered by the Intel® Atom™ N2600 dual core processor, the CL910 SlateMate works as a mobile point-of-sale terminal, offering the ability to process payment transactions, manage and access inventory status, and gain insight into customer information directly at the point of service. Don’t keep your customers waiting. Make the sale with the CL910 SlateMate.

© 2012 Motion Computing, Inc. All rights reserved. Motion Computing and Motion are registered trademarks of Motion Computing, Inc. in the United States and/or other countries. Intel, the Intel logo, Centrino, Intel Core, Core inside and Atom are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries. All other trademarks and registered trademarks are property of their respective owners.

See the Cl910 in action at www.motionComputing.com/Cl910_Demo

get seRiOus abOut mObile PRODuCtivitY with mOtiOn tablet PCs.

www.motionComputing.com i [email protected] i 1-866-682-2538

,

Motion_RIS_CL_slatemate_ad_Jul12.indd 1 7/19/2012 2:25:51 PM


m O B I l I T y


magical in-stoRe exPeRienceThe rollout of a new POS system integrated with iPod Touch devices for store associates was the centerpiece of a major technology upgrade initiative at 320 Disney Store locations. Customer traffic in remodeled locations has increased 20% and sales have climbed 25%. Disney upgraded 320 stores in North America and eight Europe-an countries; the company operates a total of 370 stores around the world.

While the iPod Touch devices are used in all retail stores, only store associates (or as Disney refers to them, cast mem-bers) in the North American locations can perform complete sales transactions. In other stores, the mobile devices serve as extensions of the fixed POS during busy times.

Since the rollout, Disney Stores has been looking at fur-ther system enhancements, including full-scale mobile POS centralization of product returns and additional employee management elements, along with enhanced save-the-sale and endless aisle functionality.

stoRe shoPPing gets soPhisticateDSeeking to provide customers with a more connected store shopping experience, Perry Ellis deployed mobile POS technology that also provides associates with prod-uct information, cross-channel inventory and customer profile data. The platform allows associates to perform transactions for both in-person and online orders with a single credit card swipe, anywhere in the store. This also allows for increased selling space and eliminates many ongoing POS operational costs.

“Innovation is something Perry Ellis has always been known for, so the adoption of mobile selling in our stores is a natural evolution for our brand,” said Perry Ellis CIO Luis Paez in a statement. “Our clients expect something different when they walk in and our goal is to use mobile to deliver an exceptional, unique customer experience that will keep them coming back.”

geaRing uP With mobilityOutdoor apparel and gear retailer Moosejaw imple-mented a new handheld mobile POS solution in all of its locations throughout the Midwest. The mobile POS solution is based on the Apple iPod Touch and delivers functionality traditionally associated with freestanding POS systems. The device is integrated into Moosejaw’s cross-channel commerce platform, which unifies call centers, POS and online commerce with a single view of products, pricing, inventory, marketing, promotions and customers.

Other key business benefits include: empowering sales associates to better serve customers anywhere in the store; increasing in-store conversion as associates wield greater influence along the path to purchase; expanding POS capacity without sacrificing valuable floor space; developing a positive brand experience en-gendering greater customer loyalty; improving visibility across all sales channels, enabling superior customer service; and achieving high sales and customer satis-faction through shortened checkout lines. l


POSsupp_0812_v1.indd 8 7/25/12 1:29 PM

RIS_CGT_Temp.indd 1 7/23/12 11:10 AM

pOint Of interactiOn

10 AU GUST 2012 R I S NE W S WWW.R ISNEWS .com

the Point of sAle reMAins A key interAction Point be-tween retAilers And their custoMers — that is, while shoppers are in the store. The challenge facing many re-tailers is that it’s becoming more common for the shop-ping experience to start well before a store visit, continue after it (often via social network sharing), and sometimes to bypass the brick-and-mortar store altogether.

There are also the issues posed by showrooming, where shoppers go to a physical store to browse, touch and com-pare products, but then use their own mobile devices to purchase the item from competing pure-play retailers.

Even before powerful consumer mobile devices loaded with price comparison apps became a cause for concern, the rise of non-linear, multi-touchpoint shopping patterns was making retailers aware of the benefits of turning their point-of-sale system into an integrated connection point for stores and digital channels. These benefits include: • Improving customer service and encouraging on-premise sales with buy online/pick up in store functionality • Streamlining and simplifying cross-channel returns, with systems that maximize customer service while minimizing the potential for fraud • Easily accessing, modifying and completing customer transactions that began in non-store channels, improving retailers’ ability to turn single-channel shoppers into more valuable multi-channel shoppers • Simplifying the ability to sell additional services (e.g. product warranties) or post-sale enhancements (e.g. shipping or gift wrapping) for digital transactions using store POS systems • Providing store associates easier access to customer activity in other channels, such as loyalty program points earned online or shopper informa

tion and analysis stored in a centralized CRM system • Access to real-time, enterprise-wide inventory data, enabling save-the-sale functionality when customers are unable to locate the item they want during their store shopping trip.

sloW PRogRessDespite the many benefits of improving digital/store in-tegration at the POS, progress in terms of adding actual functionality has been slow. Just over half (51%) of retail-ers surveyed for the 2011 RIS/RSR Cross Channel Tech Study did not offer customers the option of picking up on-line orders in stores. That number had declined from 56% in 2010, and it’s probable that the 2012 report, coming in October, will show further progress.

Cross-channel return functionality has also been slow in coming. Victoria’s Secret stores are celebrated for offering shoppers a unique in-store experience, but its parent com-pany Limited Brands is only now beginning a pilot program that will allow in-store returns of items purchased from its online and catalog channels. In addition to improving customer service, both in-store pickups and returns are traffic-building tactics that, if handled well, are likely to lead to additional sales.

Disney Stores, which rolled out a new POS system from Oracle to 320 locations beginning in June 2009, has achieved stronger in-store links to its e-commerce offer-ings with the new solution. The retailer is planning even higher levels of integration with its non-store channels, ac-cording to director of technology Ron Johnson, including centralization of product returns and enhanced save-the-sale and endless aisle functionality.

Johnson explained the difference between the two: “Save-the-sale would be the ability to clearly identify the on-

Retailers benefit when the POS links digital and in-store activityB y a d a m B l a I r

POSsupp_0812_v1.indd 10 7/25/12 1:29 PM

line availability of a different-sized version of a physical product that’s in the Disney Store. Endless aisle provides the ability for a customer who says ‘I’m interested in The Nightmare Before Christmas’ to browse online for a range of products associated with that film.”

Pier 1 Imports, a retailer that moved away from e-com-merce in 2007 before beginning a gradual return in 2010, recognizes that its store POS needs to be integrated with its online offerings. After a summer 2012 launch of a new e-commerce site, the retailer will begin rolling out a new POS system in the fall.

“Our game plan is to begin integrating the new POS sys-tem with e-commerce by summer 2013, strengthening our foundation as we build out our multi-channel capabilities,” said Pier 1 CEO Alexander Smith.

WWW.R ISNE W S .com AU GUS T 2 0 12 R I S NEWS 11

pIEr 1 ImpOrTS, a rETaIlEr ThaT

mOvEd away frOm E-COmmErCE IN

2007 BEfOrE BEgINNINg a gradual

rETurN IN 2010, rECOgNIzES ThaT

ITS STOrE pOS NEEdS TO BE INTE-

graTEd wITh ITS ONlINE OffErINgS.

institutional imPeDimentsWhile these and other retailers are taking steps to im-prove their POS systems’ digital/store integration, it’s also understandable why many others have been slow to make these kinds of upgrades. The POS is routinely identified as a retailer’s single largest IT investment, both in terms of dollars invested and in the large amount of software and hardware devices spread throughout every store in a chain. Any changes, even seemingly small and simple ones, demand careful consideration and take significant time, money and resources to implement.

Another factor has been the intense buzz generated by mobile POS in recent years, which has soaked up a large share of retail executives’ attention. The number of actual mobile POS deployments is still small, although it’s cer-tainly rising quickly. However, the idea of mobile POS “kill-ing” fixed-terminal systems has had a wide impact, even among retailers that are not currently considering such a move. If a future mobile POS deployment might serve as the in-store vehicle for cross-channel integration, it would make sense to hold off on making major changes to an existing POS solution.

incentiVe aDjustmentsMaking the store POS an omni-channel integration solu-tion also involves changing long-standing business pro-cesses in addition to upgrading technologies. The Cross-Channel Tech Trends study highlights what continues to be a major sticking point in implementing buy online/pick up in store functionality: a lack of financial incentives for store personnel to fulfill digital orders.

The 2011 study indicated that 46% of retailers still offered no credit to stores for online orders. Granted, this was a marked improvement over 2010, when more than three-quarters (78%) of respondents failed to offer such incen-tives, and there may be an equally dramatic shift this year.

Retailers will need to weigh the costs of change, both busi-ness and technological, against the possibility that their POS will become an essentially store-bound system. They should stay on the lookout for opportunities to turn their point of sale devices — fixed or mobile — into true omni-channel con-nection points. That’s a retailer’s best bet for matching store functionality with consumer expectations. l


POSsupp_0812_v1.indd 11 7/25/12 1:29 PM

NCR success began 128 years ago with the retail cash register. And we’re here for the long-haul,

innovating and aiding in your success for the future. Helping automate how retailers and

consumers interact is what we do – and what we’ve always done. It’s our core business.

Together our success extends beyond the store. With NCR converged retailing - or NCR c-tailing™ -

solutions, you can provide consumers a ubiquitous experience based on where and how they want

to interact. From NCR Enterprise Preference Manager™ and NCR Advanced Marketing Solution to

self-checkout personalization, point-of-sale software and services, NCR’s portfolio of c-tailing

solutions enable seamless consumer interactions whether at home, on the go, or in the store.

For more information visit www.ncr.com/c-tailing, or email us at [email protected].

Looking for an innovative,trusted retail partner that’s in

it for the long-haul?


Documents

Optimizing pOS fOr the 21 St century