4 Stages Of Mobile: Why All Roads Are Not The Same

8/25/2014

Without question, mobility is well down the road to transforming how retailers and hospitality providers interact with customers. For instance, some restaurants have seen a 25% increase in table turn when mobile devices are used. And some retailers, especially in the Specialty segments, are planning to completely remove their traditional POS terminals and go with tablets or other handhelds. The seminal moment for this movement was the April 2010 release of the iPad. And it was not so much the device, but the price point of $499 that opened the door for retailers to begin looking at mobile devices for associates and potentially as a replacement for POS. This is true in spite of the fact that the device is neither retail-hardened nor enterprise-friendly.

By: Lee Holman

Without question, mobility is well down the road to transforming how retailers and hospitality providers interact with customers. For instance, some restaurants have seen a 25% increase in table turn when mobile devices are used. And some retailers, especially in the Specialty segments, are planning to completely remove their traditional POS terminals and go with tablets or other handhelds. The seminal moment for this movement was the April 2010 release of the iPad. And it was not so much the device, but the price point of $499 that opened the door for retailers to begin looking at mobile devices for associates and potentially as a replacement for POS. This is true in spite of the fact that the device is neither retail-hardened nor enterprise-friendly.

Historically, when it comes to deploying mobile at the store level, retailers typically operate in four stages.

Stage 1  Retailers simply get their store managers to use tablet devices instead of back office PCs, thus freeing them to spend more time on the sales floor. Studies by others show an undisputed link between the success of a store and the number of hours a manager is on the floor versus being in the back office.

Stage 2  The use of mobile devices is extended to sales associates for use in their interactions with consumers, essentially leveling the playing field on knowledge and information access where consumers have had an advantage due their smart phones.

Stage 3  This is where retailers face the most difficulty and challenge; its where the mobile device is used to perform a checkout transaction.

Stage 4  At this stage, the customer is enabled to use their own device to perform the checkout transaction while in the store.

At Stages 1 and 2, the market is additive related to POS in that new mobile devices are coming into the store, but there is no impact on the number of traditional POS devices. Stage 3 is the game changer for POS and in certain segments will become a major disrupter to overall POS shipments going forward. Stage 4 may have an effect on total number of POS devices, but not for several years.

Some of our recent research leads us to think that Mobile POS has lost just a little bit of its luster in the eyes of retailers. Case in point, we are currently anticipating that by the end of 2013 some 28% of retailers will have adopted some form of Mobile POS. One year ago, the figure for the end of 2013 was a whopping 72%. The most likely reason for this drop (let's call it "sober reality overcoming hype") is that the vast majority of discussion about Mobile POS simply neglected to address many of the operational issues inherent in deviating from a fixed-lane checkout configuration. Those retailers that were the early adopters of the technology have been walking through the problem-solving phase of getting the devices integrated into their operational plan. Thankfully, some of their insights are beginning to be made known in the industry, for the benefit of others.

Compounding the issue is the fact that we currently estimate that only about 50% of retailers have a rational approach toward adoption of mobile devices in their stores. We believe that that number can safely be cut in half when it comes to use of those devices for Mobile POS purposes.

One of the heaviest impacts that the advancement of Mobile POS will have has to do with retailer purchase decisions concerning traditional POS terminals. Our data shows double digit percentage declines in POS terminal shipment growth from what would otherwise be expected. Note that this does not necessarily mean that traditional POS shipments will decline; it means that they will not grow as fast as they otherwise would. Hardest hit will be GMS retailers, especially the Specially Softgoods retailers.

Perhaps the most important outcome of these efforts is the least quantifiable. It is the distinct realization that consumers, vendors, and retailers alike are recognizing the power of Mobile POS and its function as a tool. And like all tools, it is truly as effective only as the artisan, craftsman, or worker who wields it.

As with any new technology, there will be many successes and failures in the coming years. It seems clear, however, that those who take bold, well-thought-out and decisive action to embrace the power of mobility will reap great rewards. Those who choose to ignore it will certainly suffer as smartphones, tablets, and other mobile devices become more and more pervasive in our connected culture.

This article was originally published by the IHL group on 8/25/14 at the following location.

Original Source