The future is bright for point of sale (PoS) technology, as retailers try to differentiate themselves in an increasingly competitive market arena.
By Kathy Gibson
Although the number of actual stores might be slowing down, new and existing stores are turning to technology to make sure they stay relevant to customers.
Doriann Venter, PinnPOS brand executive at Pinnacle, cautions that many new trends are being trialled now, but a number of the won’t make the cut.
At the end of the day, especially the larger retailers are not keen on radical change, she says, so new solutions have to offer clear value.
“What we see is that the chains are still using the same basic check-out technology.
“The technology at the point of sale actually fulfils a pretty basic function, and so retailers are being quite conservative about what they invest in. If they don’t need to do anything radically different at check-out, they are opting to keep things simple.”
Although the device being used by the teller might have the same look and feel as it has had for the past dozen or so years, there’s a lot happening on the back-end.
“At lot of retailers are looking at how they can leverage technologies like big data, analysing their sales and customers to maximise their reach.
“They want to be able to understand their customers better so they are looking to how they can leverage the data they are already collecting to do that.”
While the ultimate goal for shoppers is to make queues shorter, retailers are starting to use inevitable queue time to interact with their customers, she adds.
“No-one seems to have for the formula for queue-busting right, but we are seeing retailers start to engage with their customers, through either entertainment or information, while they are queuing.”
They are also using technology to push relevant information to customers at various stages of their retail journey.
In this respect, large format displays are gaining traction in the retail environment. “For instance, when was the last time you saw a printed menu on the wall of a fast food vendor?” Venter asks.
“There is a lot of research and development going in around the use of large format displays right now.
“And this is combining with big data and analytics to add intelligence, to allow retailers to push relevant product messaging to the right customers.”
Mobile technology is starting to make its way on to the shop floor, although this is still in the experimental stage in South Africa, she says.
“I’m not sure how it would fit in the mass retail context, but we are seeing applications in boutique stores and hospitality.”
Albert Fayard, country sales manager for Posiflex, agrees that mobility is going play a much bigger role in point of sale going forward.
“In the retail environment, people are trying to avoid having customers stand in long queues, so they are looking to mobile for queue busting.
“Mobile is also finding a role in CRM or loyalty programmes.
“The salesman on the floor can use a tablet to perform a POS transaction without the customer having to queue; and can also sign them up the CRM programme there and then so this process doesn’t hold up other customers in the queue.
“This means the retailers – and customers – can start using the time they would have spent queuing to do other things.”
Fayard believes we will start seeing more hybrid solutions that incorporate the fixed POS terminal with a detachable tablet. “This gives retailers the versatility of traditional POS, with the mobile built in.”
This need for versatility is something that is coming through in other areas as well, he adds.
Retailers and looking for smaller, neater POS devices; and they are also looking for systems that don’t require add-ons.
“We are seeing more demand for smaller footprint systems. And customers are also asking for all-in-one systems that include the POS terminal, printer, barcode scanner and credit card device all in ont package.
“People want less clutter, and they want ergonomically designed POS systems that fit the ambience of their stores.”
The traditional POS system is set to become one device among many being used to help customers, check them out and receive payments.
Among the mix of other devices that is taking off now is the kiosk. “A lot of retailers are starting to consider kiosks for payment, information and POS. I think they are going to co-exist with traditional terminals and mobile solutions.”
South Africa is seeing a good mix of technologies being employed out in the field, Fayard adds.
“We are in a pretty unique situation in South Africa, in that we use first world technology, often in an third world environment.
“When it comes to the top-tier retailers, we are at least on par with international trends. At the same time, however, we have to cater to the informal sector.”
The very diversity of the market makes it a vibrant place when it comes to technology adoption, he adds.
“I think we will become quite early adopters of mobile technology. Where there are small companies that have not yet investing in becoming computerised, they will be looking at mobility.
“On the other hand, emerging retailers may lean to a more cost-effective option and look to less expensive POS terminals.
“So we are catering to the whole gamut of the market.”
Fayard also agrees that the traditional mass retailers are being slower in adopting new trends and technologies that the smaller chains of niche retailers are.
“For instance, hospitality has admitted to using much more than in the retail space. Because you can now have cloud-based applications, retailers can push apps out to the tablet or smartphone, to take them mobile.
“The mass retailers are adopting new technologies, but very much in a testing mode in new environments. They may try out new technology in stores in the more affluent areas, but for the rest they are tending to keep to the traditional.
“However, if technology works in the test environments, they would look to roll it out more widely.”
It’s important to remember that business goes in cycles, Fayard adds, and a number of retailers are looking to smaller footprint and better mobility as they start on new hardware refresh cycles.
“The message we are hearing from retailers is that they are looking at alternative hardware. They are looking what the international and technology trends are, and adding up the costs.”
The fact that both POS terminals and mobile devices have become less expensive of late will play into this trends, he says.
“The smaller and mobile devices are less expensive so it’s more affordable for retailers to refresh their systems more often.
“Some of the retailers have kept their existing POS systems for up to 10 years and are ready to look at new technology.”
Leon Coetzer, chief operating officer of redPanda Software, points out that retailers’ requirements have changed.
“Retailers have become a customer-facing point of contact for a vast array of services, of which financial services have received the bulk of the attention,” he says. “These services include social grant payments, money transfers, prepaid electricity purchases, cash withdrawals and deposits, ticketing, insurance and many more.
“Technological innovation plays a crucial part in making this possible. The POS now needs to be viewed as a central point for aggregating multiple services, changing the way POSs are architected and how these environments are maintained and supported.
“ The services are provided in partnership with many third-party providers, requiring networks to be resilient and with redundancy being a critical factor. Mobile applications have become an extension of the POS allowing customers to look at their loyalty balances or receive targeted promotions.”
Decentralisation is another trend that is affecting retailers, Coetzer adds.
“POS is starting to move out of the outlets and into a more centralised environment. Big retailers need sufficient redundancy in place as they process high volumes of transactions, but for slower moving retail goods, where there is no need for onsite POS software, payments can be processed through a browser.
“This means that the software is centrally located, reducing overheads and providing greater control. And this ultimately leads to significant savings.”
In the hospitality industry, waiters are increasingly using tablets to take orders, and payments are made at the table – this single point of interaction improves the customer experience.
Self-checkout is starting to make its way into South Africa with some large retailers testing the concept, Coetzer says.
Arguably one of the most significant trends in the POS environment is the increasing use of intelligence to improve the customer’s retail experience.
“Between drop-shipping, online purchase with in-store collection, and in-store ordering and post purchase delivery, the concept of omni-channel has created additional complexities,” Coetzer says. “The result is a new level of sophistication and intelligence in the supply chain.
“Realtime analysis of big data has become ever more critical to monitor sales and stock movements and afford outlets to quickly and responsively react to purchases.”
It is here that business intelligence technologies come into play, he explains. “Data mining of big data assists with establishing purchase patterns and stock control. Predictive analytics has also become widely used in order to predict stock requirements and sales patterns.
“Stock planning systems, predictive analytics, and business intelligence all merge to create a holistic view of the supply chain. For this to work successfully, close relationships with service providers and logistics partners are essential in order to react to the changes in the environment.”