The Future of Point of Sale in the Age of the Customer

Abstract

Rethinking the point of sale

Article

In the past we thought about the point of sale (POS), if we thought about it at all, as a store operations function: finding hardware that works well, and designing a controlled exit — what is commonly called a chokepoint — that serves to keep an eye on people who might be tempted to leave without paying.

Some retail readers may be offended by that statement, but that is a fact. Loss prevention is as big an issue in point of sale/checkout design and systems as it is in creating welcoming entrances to the store. But is the checkout really a point of sale? Doesn’t the sale really happen somewhere else? And as a so-called point of sale, clearly it creates a sense of resentment in customers when done poorly. And most often, it is.

In fact, when I was looking for a picture of cattle to demonstrate how customers feel about going through a chokepoint, a well-known retailer’s customer line came up first. Is that any way to treat a customer? Surely not a great experience. (We discussed the point of experience in the last issue.)

There are many other examples, too numerous to mention. But I offer the airport experience as another example of an unpleasant chokepoint.

Image by Hands off my tags! Michael Gaida from Pixabay

Clearly these processes are really in need of rethinking!

Thought: The exit/payment process looks more like a system to ‘keep people out’ than to welcome or make it easy for them.

Mobile Is Not the Answer

OK, mobile will solve all that, right? Not really. No doubt mobile has some great attributes, but as it is used today in retail, it doesn’t really change the point of sale paradigm — a transaction happens at the exit, which must be scrutinized and controlled, and is unpleasant for customers. For most, mobile payment merely replaces cash or a card with a phone. And the customer still must stand in line.

Thought: The customer is already mobile; it is your point of sale that is not!

Go Where the Customer Is

If we think about the POS as ‘sales occur where the customer is,’ then we can innovate. And we can see other mobile POS concepts: Go to where the customer is; find what they are looking for; talk to them; serve them; and then transact. We have seen these systems take off in mobile-oriented businesses. In these business sectors, there is high level of contact between the customer and the provider — the ratio is quite low — 1:1, for example, in a cab ride. Or 3:1, say, at a trade show booth.

Though the inventors of the mobile POS envision these systems being used, say, in retail apparel, the reality is that there is a really high ratio of customers to salespeople. Any customer knows while walking around a big retailer that it can be very hard to find people to wait on you. So unless the retailer wants to invest in technology for the sales associates (and some will) we won’t see too many of these systems around for awhile.

Thought: Let’s have salespeople sell!

Sticking technology on a mobile device for the salesperson is getting pretty easy. That’s not the problem. But in consumer markets, sales associates are rarely empowered with tools to sell. (Could it be that retailers don’t expect these people to sell, at all, but just to provide that last element of the transaction that requires a human?)

And interestingly and importantly, the consumer has access to these applications, an advantage over the so-called salesperson.

Thought: If the etail channel, the mobile channel (the customer) has really good technology, why can’t the salesperson? And then they might actually sell.

Get Rid of the Chokepoints

JCP plans to emulate its CEO’s alma mater (Apple) and get rid of the chokepoints by having self-pay kiosks and as well as mobile salespeople in the store. Macy’s has (although not enough) price scanners in many of their stores, which allow the bargain hunters to check item prices. Consumers do use these when they are provided.

The kiosk is a self-service invention that allows customers to look up prices, find sizes, etc. My previous employer designed these for several retailers a decade ago, and the goal was to align the web, product catalogue, an inventory location system, and an in-store kiosk. What an idea! (I think that today we call that omni-channel.)

JCP is trying to attract a younger shopper with their new fashions (actually pretty nice and priced extremely well, with kind of a modestly priced J Crew look). We already know that this demographic takes to tech; so I would hope that the salespeople will be well versed enough in the use of these technologies to support my 90 year-old mother in the store. (Although my mother has used the self-checkout at Home Depot.) So it is not beyond the imagination that these technologies will find customers.

This may ease the cattle line problem somewhat. It certainly reduces the sense of chokepoints.

Another version of this is also the next step on the journey – pple’s Easy Pay system, which I have used, and it is! Once you are ‘in the system,’ i.e. your credit card is on file, you can shop away, scan and go. The sense of the chokepoint is reduced, and as the young Apple people pointed out, you don’t have to deal with the throngs in the store. (It is pretty crowded on a regular basis in my neighborhood.) Of course, behind the scenes retailers do have the old problem of avoiding theft by having secure loss prevention technology.

One reason RFID holds so much promise is that you can either write ‘paid’ on a tag, 1 or ‘decommission it’ once the item is paid for.2

Thought: Think instant gratification and reduced shopping cart abandonment, instead of focusing solely on cost reductions. This approach might actually sell more merchandise!

Sign-Up Once: Subscription Models Bypass POS

Many businesses, including Government (which is not usually known for being innovative), have dealt with this process fairly simply. For example, the toll system. Many commuters, with their RFID tags, now bypass POS in fast lanes, by signing up just once. From time to time you review an online statement of expenses. I am not sure why more businesses don’t get it when so many have repeat customers with very consistent ordering patterns. If a customer always orders a product on a schedule, you can reduce the hassles for the customer as well as probably get paid sooner and have a more dependable revenue stream.

Thought: POS should be a process of commerce.

Conclusion

Organizations need to think of their POS as points of experience and rethink how these experiences work and what they say to the customer. Retailers can reorient their thinking and transform these points of experience into those that entice customers and, therefore, bring in more sales. Real customers appreciate the value of an item and expect the value to be protected. They do know that losses from theft translate into increased prices. But you, the merchant, can’t sell if the whole process is not convenient and enjoyable. There are systems that secure the store and allow the shopper a pleasant experience, vs. methods that don’t make the customer feel respected.

In Miracle on 34th Street, we all remember Santa Claus recommending that the Macy’s shopper go to Gimbels for the item. Today, there is no more Gimbels, yet Macy’s is alive and well. (OK, that is a fiction, you may think.) Another example is Bealls. Somehow they manage to still have free gift wrapping, generous return policies and merchandise for all demographics. These are ideas that make the customer feel respected, but still, within their model, they protect assets.

If you have a business that is rated low by customers (airlines and cell phone companies come to mind), or you are facing incredible competition (retail), shouldn’t you be rethinking your whole relationship with your customers while they are still your customers? Brand companies cannot rely on the retailer as their savior with the consumer. Even today, with so much going on in mobile and social, most brand companies have no idea who actually buys and uses their products.

That is bizarre, when you think about it. And do think about it. The customer does not live at your artificial points — and this is the point: they live in a process of learning, assessing, shopping, and paying. And if you want that loyal customer, you really have to think about their whole process of experience.

And as Harry Nilsson narrated in The Point!, “Maybe you don’t need a point to have a point.” Maybe there is no point of sale in the future, at all.

The beginning … .

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To read about cool companies who are rethinking their consumer relationships and creating better experiences, read Cool Companies.

In this series:
Demand Management in the Age of the Customer
Rethinking the Customer at the Point of Experience
The Future of Point of Sale in the Age of the Customer (this article)
Cool Companies

References:
Demand Management
Social Networking
RFID/Mobile

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1 You can also register various data such as loyalty or club member data; value of the item (transit cards, for example); warranty and other security elements that might be part of the product’s ongoing value to the consumer. — Return to article text above
2 Decommissioning basically turns off the transmission so it won’t trigger an alarm when you leave the store.– Return to article text above


To view other articles from this issue of the brief, click here.

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