As the famous Nobel Prize-winning physicist Niels Bohr once said, “Prediction is very difficult, especially if it’s about the future.” Regardless of that cautionary note, there seem to be at least five predictions we can make for 2016 based on current evidence about emerging trends for the digitization of point-of-sale systems and the impact on both merchant capabilities and customers’ shopping experiences.
1. Cloud-Based POS Coming on Strong
The days of expensive, proprietary, hard-to-maintain, hard-to-use, insecure, unreliable old-school POS hardware/software systems are numbered. In the coming year, watch for a significant adoption of cloud-based POS systems, especially in the U.S. where the deadline for EMV-compliant POS systems is already past and savvy merchants with old POS systems are feeling the pressure.
Increasing use of cloud-based POS will relieve merchants from high upfront costs and managing themselves all the upgrades, software glitches and downtimes of traditional POS. Those with ERP systems will be able to integrate POS data with internal business decision systems. All merchants will benefit from predictable costs, automatic data integrity preservation and the ability to access the system with a mobile device of their choice.
Most of all, cloud-based POS dovetails perfectly with customer experiences and expectations regarding tablet/smartphone interfaces, the merging of off/online shopping, e-payments and personalization of their encounters with retailers and services.
2. Tablet POS Systems Become the Norm
Tablet-based operations are displaying strong trend to replace the more costly, clunkier, non-standard interfaces of traditional POS systems over the next few to several years. Cloud-based or not, customers are showing a strong preference for tablet-based ordering and checkout and merchants love the convenience on their side as well:
- Tablet systems with POS software already installed are less costly than traditional systems.
- A shop’s employees are very likely already experts with tablets, so training costs are reduced.
- Tablets take up less counter space, which is always at a premium to display impulse items at checkout time.
- Tablets are untethered. They can be taken anywhere in the establishment or on the road to exhibitions, sales events or other customer locations.
- Retailers are always looking for the “cool factor,” especially when it comes to encouraging business from a demographic soon to take over the Boomers in spending power: Millenials. Maybe an antique store would keep a cash register to enhance their ambiance, but few other retailers want their shop to look dated.
3. Mobile POS Starts to Take Hold
Mobile POS systems that encompass customer devices will expand significantly over the next few years. These user-friendly frameworks will streamline browsing and buying by allowing customers to shop even before they reach a bricks-and-mortar outlet and to complete their purchase, at their preference, on their own device. For one thing, this eliminate the familiar but unpleasant customer experience of being stuck in the wrong line again.
This aspect is a win-win situation as retailers end up doing more business while creating a meaningfully higher ratio of satisfied customers in the process. As long as businesses allow for checkout via device and via human interaction, they will have all the bases covered and more happy, loyal customers.
4. Digital/Cloud-Based POS Becomes a Must-Have Capability
Many, perhaps most, retailers are going to skip right over digitized, but traditional, POS systems in 2016 to cloud-based POS services on their next upgrade. Besides the many benefits of cloud-based POS mentioned previously, one of the often overlooked values of cloud POS is the ability for full integration with business analytics and decision processes.
The central-repository storage/compute server and lightweight mobile client model of cloud POS means valuable, real-time customer data can be integrated directly with financial, business development and marketing functions within the organization.
Marketing can customize individual customer shopping experiences by combining past browsing/buying behavior with real-time interactions on customer devices. With this information, they present on-the-fly promotions or loyalty discounts as they move about the store. Data can be aggregated from select groups of customers to dynamically alter inventory, product placements, staff deployments and pricing based on time, season and known buying habits.
5. E-Pay and Chip Card Accommodation Accelerates
Even though EMV chips on credit cards have been around for several years, the U.S. is the last one to the party. The deadline has already passed for merchants who are not EMV-compliant to incur charges for fraudulent purchases, but uptake is nowhere near 100 percent yet. As the implications for retailers continue to sink in, watch for a much steeper rise in the adoption curve.
The impact of the conversion on POS vendors is enormous, of course, and cloud-based POS service providers are responding with less complex, less expensive EMV-capable systems. It is a two for one opportunity as they also will accept the growing trend in eWallet payments such as Apple Pay, Google Wallet, Android Pay and soon CurrentC. There is probably no end to who can offer an eWallet system, so look for more of these from the biggest retailers.
All of these e-pay schemes currently demand the presences of near-field-communication, or NFC, technology, but equally important is for retailers to install highly secure POS systems. Cloud-based POS providers are in the best position to provide these because of their ability to automatically keep merchants updated with the latest and greatest in hardware and software security, backups, shadow servers and encryption.
It is a given that the best cloud POS vendors are going to handle both EMV migration and eWallet acceptance in one fell swoop. That single reason is why, for instance, nearly 50 percent of restaurateurs are now eagerly researching their POS upgrade options.
Several trends are coalescing around the digitization of traditional point-of-sale systems. These include the use of tablet-based interfaces, interaction with customer devices, the integration of cross-silo, business-critical information management systems with POS and the strong move toward eWallets and EMV compliance for chip-enabled debit/credit cards.
The strongest trend of all is the increased adoption of cloud-based POS systems that provides a synergistic relationship to the others. The strength of this trend derives from cloud POS’ unique benefits in terms of mobility, flexibility, capability, security and customer convenience.