The Evolution of Point of Sale
Physical retail stores have adopted many technological advancements to enhance the customer experience. As a result, POS has begun a dramatic evolution from ‘point of sale’ to ‘point of service,’ and this means that retailers will rely more on software to support in-store experiences and increasingly look for store applications that not only support traditional functions, like transactions and back-end operations, but also enable store interactions and real-time promotions to make the shopping experience more entertaining for customers.
The leading suppliers of retail POS solutions (including Aptos, Fujitsu, NCR, Oracle and PCMS) are those that bring together an integrated and bundled offering rather than point solutions. As the leading suppliers in this space strive to have ‘complete’ offerings, it is assumed that there is no undue pressure exerted on buyers. In reality, retail buyers prefer to source hardware and software as separate entities, rather than sourcing them as an integrated bundle from a single supplier.
During selection of a supplier, the POS solution offering is perceived as one of the most important decision factors. Before sourcing a POS solution, retailers need to consider certain capabilities of suppliers including their ability to support different types of transactions, provisions for real-time information, compatibility with future applications and the inclusion of a strong mobile component.
The adoption of mobile devices has minimized the gap between digital and physical worlds and has enabled retailers to harness their digital capabilities and infuse them into their physical stores. This has led to the evolution of Mobile POS (mPOS) solutions and increasingly, retailers are moving to adopt mPOS technology to enhance customer engagement and improve the efficiency of sales-related functions. It is expected that by 2018, 78 percent of the retailers will have rolled out an mPOS solution.
For an mPOS solution, there are two distinct sets of suppliers. One is made up of generalist POS suppliers that have developed mPOS extensions – this includes the likes of Aptos, NCR and Oracle. The other set includes specialists, and these can integrate with numerous data sources – these suppliers include Starmount, VeriFone and CrossView. In terms of customization and integration capabilities related to mPOS, generalist POS suppliers are considered better than specialized mPOS suppliers. The generalist suppliers are believed to bring in all the typical functions that exist in their traditional POS solution offerings, whereas specialized suppliers offer fully-functional mPOS capabilities but do not provide the significant customization abilities required to integrate mPOS with legacy in-store systems. On the basis of past contract deals, it is evident that the larger enterprises typically have tie-ups with generalists while SMBs prefer specialists, and this is due to the aggressive pricing proposition of specialists that brings in smaller and mid-market enterprises.