Retail Technology Experts Blog






4 Retail POS Trends to Watch Out For

July 8th, 2009

blog_070809_imageBy: Regina Ciardiello, Editor,Vertical Systems Reseller

Think back to the 1980s when the PC-based POS terminal became mainstream technology. It was an easy way for both supermarket employees and customers to make their way through the checkout via laser barcode readers/scanners. Gone were the days of having to perform price checks and searching for the little price sticker on each item.

Even before, was the introduction of the Universal Product Code (U.P.C.) barcode, introduced on June 26, 1974, to help supermarkets speed up the checkout process. Celebrating its 35th anniversary last month, the first live use of a U.P.C. occurred in Marsh Supermarkets store in Troy, Ohio, when a cashier scanned a package of Wrigley’s gum. The new technology has since ushered in extraordinary economic and productivity gains for shoppers, retailers and manufacturers alike, with estimated annual cost savings of $17 billion in the grocery sector alone, according to one study.

Technology went even a step further about a decade ago, when the dawn of the self-checkout device occurred. It was a decision that made supermarket managers, employees and customers alike actually enjoy the shopping experience. Employees were no longer tethered to a check-out station, and shoppers found that the “do-it-yourself” aspect of the technology made the experience not only easier, but pleasurable as well.

It seems that every time you walk into a retail-type establishment, there is some type of new technology either being tested out or implemented to make the consumer (and employee) experience easier and faster. Therefore, in the spirit of these new retail POS technologies and trends, as well as the fact that the Retail Solutions Providers Association’s (RSPA) Convention & Expo is taking place this month in Las Vegas, we felt that it was only fitting to reach out to the retail channel community for their thoughts and predictions on the current retail POS trends.

In order to accomplish this, we asked various vendors, VARs and distributors to share their thoughts (on what we feel) are some of the most important questions that the channel needs to know about now. In sifting through the responses we received, we noticed that even though we asked three very distinct groups to share their thoughts on these questions, their responses were basically in tune with each other” whether they were VARs, vendors or distributors.

1. What are some of the top POS retail hardware trends that you are currently seeing?

For the most part, touch screens scored high on the list of those who responded to this question. In fact, Will Atkinson, president, CAP Software, noted that he’s seeing this technology in nontraditional areas, such as nurseries and car washes. “Customer-facing LCD displays are becoming more popular, even among smaller retailers for enhanced image, and presenting more information to the customer,” Atkinson says. He also noted that pin pads are on the move as well in the retail sector. “Luckily, more retailers are adopting pin pads and signature capture devices at the POS for better customer service and greater security,” he adds.

Signature capture was also on the mind of Mahendran Ramanathan, president of Retail Technology Experts, a Miami-based solution provider. He also noted that RFID barcode printers, RFID scanners and mobile POS terminals were at the top of his list.

In keeping with current corporate social responsibility measures, many in the channel are also going “green,” which is something that Jeff Yelton, president, ScanSource POS & Barcoding is noticing on all fronts. “Many manufacturers are currently focused on ways to become more environmentally friendly, how to minimize packaging, what to do at ‘end of life,’ and how to properly dispose of technology products,” Yelton says.

Yelton also notes that the distributor has noticed any end users holding on to their products longer and deciding to not replace at the rate they once were, which he notes is a “true statement of our economic times.”  What he is referring to is the trend of non-technology refreshes, which is what many end users today are balking at, as a result of tough times. Instead of completing their scheduled refresh, end users have, of late, been taking the attitude of “if it ain’t broke, don’t fix it.” Many of the channel’s distributors are developing ways around this trend, so that end users will be more inclined to work with VARs on technology refreshes that are more than just a standard upgrade.

Steven Abramovich, vice president, Sales & Global Marketing, Elo TouchSystems, agrees with Yelton’s sentiments. “Customers tend to keep their products longer in the field, which increases the need for higher product durability,” Abramovich says. He also notes that he sees  customers “looking at larger displays to provide suggestive messaging to clerks as they ring up each item.”

 

2. Specific to retail, what are the top retail POS software trends?

As it relates to top trends on the software side of retail POS, we found that many of our respondents said that integration was top of mind. “We’re seeing phenomenal levels of integration between disparate apps, or complementary applications,” says Atkinson of CAP Software. “This benefits both VARs and retailers.”

Edward IP, president of IUG Business Solutions, a New York City-based retail solutions provider, agreed with Atkinson. “Integration is really the key to the strength of the retail POS system,” Ip says. “It’s no longer just about integrating your POS system to your ‘daddy’s Quickbooks.’ It’s now more about integrating to your e-commerce system, supplier and customer.” Ip also adds that POS vendors are starting to realize that “the ISV (independent software vendor) model is really important,” and therefore, “SDKs are becoming stronger by the day.”

On the payment processing front, Mercury Payment Systems noted that direct integration with processors is a hot topic in retail POS circles. “Many developers are moving away from payment middleware and gateway solutions, opting instead to integrate directly with payment processors,” says Baird Kleinsmith, Mercury’s director of channel sales. Kleinsmith also notes that many developers are beginning to offer hosted POS solutions that are Web-based with little or no software footprint.

David J. Gosman, president, pcAmerica, a VAR/ISV based in Pearl River, N.Y., also referred to integration, especially as more end users are “watching their money in all areas more closely.” Gosman also noted that personalized marketing, which includes retailers trying to accomplish a higher ROI with consistent or reduced marketing dollars.

Aside from personalized marketing, retailers are also looking toward increased customer loyalty programs and the software to go along with it. “Customer loyalty software programs are becoming fully integrated with more POS applications to the point that the cashier can sign up and register new customers for in-house loyalty programs in just a minute or two,” says Mark Fraker, vice president of Marketing at BlueStar. “The same applications are reminding customers of the number of loyalty points they have on every receipt they receive from the store.”

 

3. What are the top POS peripherals that are currently hot in the retail market and why?

According to Henry Helgeson, president and co-CEO of Merchant Warehouse, a Boston-based credit-card processing company, one of the top peripherals to watch right now includes encrypted card readers. “Encrypted card readers are truly becoming a necessity in the merchant’s eyes, and by encrypting customer information and account data at the card reader, security threats are minimized significantly,” Helgeson says. “Additionally, it is extremely important for merchants to take an active role in security, working toward PCI DSS compliance, and encrypted card readers play a big part in achieving this.”

Gosman of pcAmerica agrees with Helgeson’s assessment of encrypted card readers. “There is very strong interest in the industry, and us being one of the only solutions providers being able to actually use these, we’re seeing increased interest,” he says.

Digital signage was another peripheral technology that received high marks. “Digital signage monitors will be used more frequently to advertise products and to push inventory out the door; it also provides an additional revenue stream for the retailer,” says Marc Rachiele, director, Marketing and Vendor Management, for Ingram Micro’s DC/POS Division.

“Digital signage is coming,” says Atkinson of CAP Software. “It may not be huge for small retailers yet, but it’s already a big deal for the major retailers, and boutique retailers are catching on quickly,” he says.

“It’s extremely cost-effective to add in a digital signage application, evening small stores, from the back of your register or within the store,” says Ip of IUG Business Solutions.

BlueStar’s Fraker feels that digital signage offers retailers a new generation of interactive solution. “In rapidly changing POS environments, digital signage allows the retailer to maintain in-store communications with customers, and this, in part is driving the rapid adoption of retail digital signage,” says Fraker. “These innovative digital signage solutions will help retailers who are seeking strategic ways to draw in new customers as well as maintain the old ones, in both internal and outdoor retail environments.”

 

4. What are the most in-demand technologies that end users want as it relates to retail POS?

Self-service is hot, and most of the VARs, vendors and distributors that we asked agreed with our assessment. “From multiple self-checkout lanes at the grocery to mobile POS and line busting many applications are becoming mobile,” says Yelton of ScanSource POS & Barcoding. “Resellers need to ensure they are offering new solutions to their end users so that they can enhance efficiency, customer service and customer experience.”

Aside from mobile self-checkout scanning devices, kiosks are also gaining traction within the retail setting, especially as more consumers increasingly want a “do it yourself” in-store experience. “Self-service is a big part of reducing employee costs and providing the information required for today’s savvy shoppers,” says Rachiele of Ingram Micro. “Gift registry has been prevalent for years, but now we are seeing more applications for this hardware, including the incorporation of digital signage advertising, promotional displays and loyalty programs, as well as POS solutions such as self-checkout, rental and returns processing.

“Customers are constantly seeking more information about the products they consume, and want to make purchase decisions easily and quickly,” says Fraker of BlueStar. “Thus, the top in-demand technologies end users seek increase product awareness, reviews, price comparisons and related items. This is accomplished by information kiosks and digital signage, as well as RFID technology that helps put the right product on the right shelf at the right time.”

In addition, touch screens, which are a large part of the self-service component was also worth a mention. “Touch-screens have long-been used for retail transactions, but now we’re seeing adoption rates increasing,” says Abramovich of Elo TouchSystems. “All glass touch screens that clearly display graphics and photos that are part of POS applications help improve transactional throughout.”

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