Mobile POS systems gain ground among SMBs

Mobile POS systems free salespeople from being chained to registers, allowing them to serve customers where they are: on the retail floor.

Mobile point of sale is quickly gaining popularity among small- and medium-sized retailers.

Jordan McKee, a Yankee Group analyst, said 51% of merchants that have been in business for three years or fewer are considering implementing mobile point-of-sale (POS) within the next 12 months. The December 2013 survey found 34% of the smallest retailers -- with less than 20 employees -- had already deployed mobile point of sale, and another 19% had plans to do so in the year ahead. For slightly larger businesses, of 20 to 99 employees, 39% already had mobile POS, while 30% planned to add it in the near future.

Low cost is a major appeal of mobile POS for smaller retailers -- a cloud-based system can cost as little as $50 to $100 a month, Mckee said. But more important, mobile POS gives retailers of any size the freedom to put more employees out on the floor to interact with customers, experts said.

"Not having employees chained to the register, but out on the floor engaged with customers, is a major value of mobile POS," McKee noted. "Once the employee is able to mingle with customers, and take payment on the spot, you avoid the loss that happens when a customer wanders around the store to the register, only to decide they don't want it."

Mobile data promotes better customer service

Mobile POS is typically linked to product inventory, enabling clerks to check the status of a product for a customer or order a product to be shopped from another shop or warehouse, McKee said. That in turn increases the odds of a sale.

Before investing in mobile POS: Some caveat emptors

Mobile POS isn't for every retailer, and it's up to each company to decide whether it can benefit from it. According to experts Dick Calio of R.J. Calio Consulting and Jordan McKee, a mobile retail analyst at the Yankee Group, there are other constraints that a retailer should consider before investing in a mobile POS implementation.

-- Older consumers show a resistance to using mobile POS given unfamiliarity with the technology. 

-- Large-scale mobile deployments in large enterprises may involve tying together back-end systems such as loyalty programs, sales offers and inventory. That takes time and requires the cooperation of multiple internal and external stakeholders.

-- Mobile point-of-sale deployments are only as good as the employees using the devices. A successful deployment requires employee training to ensure they are competent with the device. 

-- Changing the engine while the plane is running is always a challenge. Any downtime to a POS system during business hours can become a major problem for a retailer.

-- Finally, how a mobile system processes transactions when connectivity is lost is an important issue to investigate. For example, how are credit card transactions processed and stored, and what happens when connectivity is re-established?

"The employee doesn't have to leave the floor, or the customer, to go check the stockroom," he said.

Hound About Town, a pet supply store chain in Hamilton Park and Van Vorst Park, NJ, opened three years ago with a cloud-based mobile POS. Donovan Cain, the owner, was familiar with iPhones and felt comfortable with LightSpeed Retail Inc.'s iPhone and iPad POS applications, which include inventory, product catalogs, resister functions, employee scheduling, CRM and cloud storage. The mobility of the iPhone allows Cain to checkout customers on the sidewalk if the store is crowded, and he can talk to a customer on the floor even while ringing up another's purchase.

Selling at local events has become much easier, thanks to mobile POS. Unlike in the old days, Cain doesn't have to resort to an old-fashioned cashbox and receipt book. As long as there is a Wi-Fi or 3G cellular connection, Cain can process payments, order and ship products, and check his inventory.

Michael Cohen, CEO and co-founder of Wrightwood Furniture in Chicago, said his Shopify system provides a single database for both online and in-store sales. "We aren't looking through two databases all the time, but have one for reporting on everything. We also want to start to segment and understand who comes in through the store."

Mobile POS needs to mesh with products

Mobile devices can also be used to provide clerks on the floor with information to guide customers in their purchases, said Dick Calio, CEO of R.J. Calio Consulting, a retail consulting company in South Windsor, Conn. Some products are particularly well-suited to sales that involve complex or technical products, he noted, because they are often expensive, come with various accessories -- such as health foods, camera equipment, kayaks and canoes, and firearms -- and require the customer to research the product.

"These aren't commodity sales like razors and shaving cream, where all I need to know is what part of the store they're in," Calio said. "These are interactive sales, and an employee can talk to the customer about where I'm going to use the kayak, is it a one- or two-person kayak, what's my level, what accessories does It need. If they have that on a tablet, they can do a better job of helping me."

On the other hand, he noted, retailers who sell a lot of commodity products or who depend on the sale of impulse items at the register to increase sales, might not benefit from a mobile POS approach.

"From an ROI perspective, a retailer must determine how a mobile POS system will enhance the customer experience and result in increased sales," Calio noted.

For some stores, mobile POS is simply a good fit with the image of the retailer. For example, Lost Weekend is a gourmet coffee shop with a surf theme in New York City's Chinatown, which draws a largely younger and mostly male clientele who are smartphone users and, often, iPhone and iPad users in particular. So the firm's use of Square mobile POS, which is designed for the iPhone, fits in well with the culture. Ditto for Cain's pet supply store, which uses Lightspeed.

"It's a little thing, but it goes with our brand of being a high-end pet boutique," he said.

This was first published in May 2014

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