By Ramesh Sethuraman, Guest Contributor, Chennai, India.

Habituation

The Retail Industry is continuing to evolve from Multichannel to Omnichannel to Agile Commerce with the help of technology implementations. But sometimes, it is difficult to change organizations’ mindset and get rid of their long-standing habits, many of which are no longer required. One such area is Point of Sale (POS).

While POS continues to be the crucial customer touch-point, from a technology perspective retailers are still living in the past. Here, we are not referring to just hardware or software but from the perspective of the IT ecosystem as a whole.

New Age POS Needs New-Age thinking

POS is more than an application, hardware or an operating system; it is part of the network infrastructure. The network is the connector to all key business process enablers: back office, central, outside agencies (banks, registries, etc.).

A decade ago, stores were connected to the Home Office with dial-up lines or narrow bandwidth (speed measured in kilobytes, rather than megabytes) data networks. Managing a dedicated network across stores was a costlier affair at that time. But in the current era of hyper- networks and omni-channel’s data explosion, the cost of broadband networks is significantly lower.

POS has advanced to the stage of Point-of-Service, but it continues to exist as a separate monolith. Laggard retailers continue to keep Store and online commerce operations separate starting from inventory management. Retailers who embrace “Omni-channel ” philosophies integrate their business units into a unified ecosystem. The most common example is allowing the store to fulfill or service online transactions. In this case there no difference between the store and online inventory. It’s one pool.

Agile POS

While retailers have built / mirrored all POS related functionalities / features in their eCommerce portal, they are comfortable having their POS as a separate parallel system. But Retailers no longer require a separate POS system as it exists today.

Is hardware redundant in the new age of POS? No, we don’t say that! Items need to be scanned at the register and many customers still expect physical receipts. Similarly, though non-cash payments are on the rise, we can’t ignore cash transactions which continue to be a significant percentage of store level transactions.

Printers, scanners and cash registers will continue to remain relevant for POS. But the software and its dependence on special types of hardware with an embedded OS are the roadblocks which keep retailers from faster upgrade cycles. This also increases the cost of maintenance and support as the POS systems age.

Following is a high-level multi-step process to implement agile POS. Of course, there can be multiple variations based on the retailer’s requirements and IT approach.

Step 1: Create a separate instance of the existing eCommerce system (Retailers can also build a Private cloud through which Agile POS systems can be connected)

Step 2: Add / modify functionalities for Agile POS – E.g. Store level admin feature, Store Manager PUSH reporting, Loss Prevention features, cash balancing, etc.,.

Variation 1: Can be connected through enterprise level private cloud with all security features embedded.

Variation 2: Store level server with a local instance for emergency offline features.

Step 3: Identify the systems to be integrated and build a Service-oriented integration adapter. In many cases, the existing system integration used by eCommerce could be leveraged. This also reduces integration effort and time.

Step 4: Identify upgrade compliant hardware for the new POS system (Tablet, Cash Register, Scanner, Printer, card reader, etc.) with upgradable drivers.

Step 5: Build a cashier friendly front-end (UI) to simplify training.

Step 6: Identify pilot stores and deploy the solution (Can do it by department, as needed; for example Bakery, food court, etc.)

Step 7: Evolve the solution based on employee and customer feedback.

Step 8: Roll out to stores in phases.

Challenges

Every new technology comes with its own challenges and the idea we propose is no exception. In this case, we obviously have to address four major challenges:

1. Availability and Scalability
   
2. Offline operations capability
   
3. Security
   
4. Re-training of cashiers
   
5. Integration with store systems
   

These challenges are not so different from today’s POS upgrades. There are several potential ways to mitigate these risks and achieve the agile POS.

Key Advantages

There are numerous short term and long term advantages for retailers if they migrate to Agile POS:

1. Provides IT agility – Extensibility of Mobile POS
   
2. Easy and centralized upgrades / feature enhancements
   
3. Enterprise level perpetual inventory
   
4. Seamless order fulfillment
   
5. Better leverage of endless aisles
   
6. Seamless buy-online-pick-up-in-store (BOPIS) / Buy online and return in store (BORIS)
   
7. Order at store and take delivery at home
   
8. More effective cross-sell / upsell / promotions (Integration with Big Data)
   
9. Live analytics and reporting 

…and much more

Conclusion

Retailers remain conservative and always try to play it safe when it comes to IT investments. But, any retailer who is planning for a POS upgrade must venture into Agile POS. The highest opportunity for long term success is here

It is just a matter of time until retailers realize the advantages and come out of their turtle shell to reap benefits that overshadow the risks. These risks are nearly mythical in the current era of hyper connectivity.