The Channel’s Mobility Metamorphosis

Estimated reading time: 11 minutes


BlueStar’s Jason Firment headed to Business Solutions Magazine’s Retail IT Var of the Future conference in Chicago on May 18. While there, he participated in the “Mobility Metamorphosis” breakout session, to discuss the changing scope of mobility and the growing range of solutions available.

Click here to listen to the session, or read the edited, partial transcript below.

BSM: So we have a better understanding of where you play in the mobile world in general, can you talk about the range of mobile POS solutions that you offer VARs and ISVs – first Luis and then Jason.

Artiz: Aside from our standard thermal printers and hybrid printers, we have a set of solutions that are geared toward mobile. We have our OmniLink smart printers which we’re showing today. Basically they’re a hub for your peripherals so you can use your tablet and still use all the peripherals that you need for POS.

We have our mobile belt clip printers, which we call Mobilink two-inch and three-inch, and then finally we have a line of printers called the M Series, and those are the right form factor and right flexibility for tablet POS environments.

BSM: Great. Jason, what can you talk about from a BlueStar offering – obviously you’re a distributor.

Firment: Six years ago they introduced the iPad tablet, and at the time as a distributor we didn’t really know what to make of it. Is this consumer device going to force its way into the channel? We weren’t quite sure whether we should embrace it or if it was just going to be a fad.

Within a year of that happening, we’ve seen that this consumer device was making waves especially in the POS space. We knew it was going to be a device used for businesses. So once we saw this influx of ISVs writing software for it, we made the decision to embrace that.

So immediately we started looking at different manufacturers across the board from printer companies to enclosure companies, what the cash drawer industry was going to do, what we were going to do from a card swipe standpoint, and really began to work closely with our vendor partners.

So today we are one of the leaders in point of sale peripheral wraps, and we have embraced all of these technologies that were out there, and our goal was to say, “Okay, if you’re going to bring a tablet whether it’s BYOD (bring your own device) or you’re going to sell it, you have an Apple product and somebody wants to turn that into a device, we work with folks with like Epson with their OmniLink printer to be able to create these peripheral wraps so it makes it easier to say, “Hey, I can walk in there with the solution. I can get it all in one place.” We’ve embraced all of those manufacturers around that for some time now.

Roddy: It really seems to be folks were poo-pooing from the outside saying, “Ahh, iPads are not going to be appropriate,” but it seems like you have to react appropriately with your organizations.

Firment: And react quickly. Apple moves at the speed of light, and now you look at a lot of the other tablet companies out there that are producing great products that operate very well in the POS space for mobile POS or fixed tablet.

BSM: Luis, let me ask you this. Mobile POS has been described as a huge consulting opportunity because merchants don’t know what’s the right fit for their business when it comes to mobility. Do you agree with that? Do you see that VARs are able to make greater margins because of this opportunity?

Alvarez: Yes. I think there’s a there’s a big opportunity especially in the education of customers. Let me share a quick story. My dry cleaner has this POS system that is extremely old, and I asked him, “Why don’t you go to something like a tablet system because it’s easier to use, it’s going to be a lot smaller, you have more space for all the people that are coming in with their clothing.”

He looked at me he said, “Why would I want to change something that I already understand?” I think there’s a big opportunity for education from the VAR to the customer and I also think there is an opportunity for margin but I don’t I don’t know how much more. In the beginning there will be an opportunity for margin when the hardware gets replaced, and then after that I would say that the margins are very similar to what they do today which is the continual service.

BSM: Got it. It’s funny – from a dry cleaner perspective, I’ve been going to the same dry cleaners for years, and when I go in there they say, “Your name?” Roddy, R-O-D-D-Y. “What’s your address?”, and you have to give it again. “Do you want this starched?” – all the same questions. They finally adapted to a new technology and now I walk in, I give my name, everything’s there. They know exactly what I want, and I’m thinking, “Well welcome to 2008.”

There’s certainly an opportunity for VARs to go in and suggest something, and mobile can be a low-cost way to get there. Is that how you’re seeing it as well?

Alvarez: That’s right.

BSM: Got it. Jason, what’s your take on it from a huge consulting opportunity. Do you see that in your resellers as well?

Firment: Absolutely. I think back to, I think it was about a year-and-a-half or two years ago, there were some executives at Kohl’s. They said, “We’re going 100% mobile – this is our new opportunity.”

Then after they sat down with some individuals and some large resellers, they consulted them and realized, “Holy cow – we don’t have a wireless infrastructure. Our entire infrastructure and storage cannot handle this bandwidth volume.” So obviously you walk into a Kohl’s today, they are not 100% mobile. So they had to draw back – and that’s at a Tier I level.

I’d like to share an opportunity that I had. I was at the POS Lavu show last year – we had Andy (Lim) here talking yesterday – and I was talking with one of their dealers who had been relatively new, he’d only been with them about a year.

We were talking about his experience, and he sells strictly in the southern Texas area, so there’s a big Latin market in Mexican food, and he started introducing the Lavu tablet in there and selling opportunities not only for a fixed POS but also for tableside ordering.

The consulting opportunity was huge for them because at that level they (the merchants) clearly don’t understand everything that they’re going to need to run a tablet. They want that sexy look, they want the low countertop space, but they really don’t understand. “I can’t just go buy a Linksys system from Best Buy. I need to secure WLAN system.”

What it does do is now it opens up the opportunity for upselling. Because what he was doing is, “Okay, I’m going to come in, I’m not only going to give you a POS, I’m going to rework your entire network,” and then he talks of security. “How do we lock down that system?”

That opened the door to another conversation around security cameras – in back, in front – so now he took a POS opportunity from consulting right into wireless LAN networking, right into security and surveillance. So, yes, I do think that there’s opportunities there.

BSM: Can you talk about from a vertical perspective inside of retail, inside of hospitality, inside of grocery? Let’s start with you Luis. Where are you seeing the best margin opportunities for resellers related to mobile POS? Feel free to talk about each one of those sub verticals or talk about just one –  the hottest that you’re seeing.

Alvarez: Sure. Let me take grocery off the table for a second, and the reason is because larger grocery stores do have very specific workflows and very specific – let’s call them “throughput metrics.” So for them to change to a mobile system is a lot more complicated because of their internal systems.

But when we look at places like restaurants and retail, for us the smaller retailer is more important, places where immediate customer service is important.

One of the examples that we like talking about with our sales team is Nordstrom Rack. When you go into to the Nordstrom Rack, that customer is probably not going to have a lot of time to shop. They’re going to go in, they need to a pair of pants or a tie and they want to leave.

What they’ve done, they’ve done a great job of making sure that their employees have these neon green shirts and once you pick out your clothes, you quickly go to that person and they check you out in multiple places in the store.

We see the opportunity in store-within-a-store. You think about what Best Buy is starting to do now where they have the Microsoft mini store, the Google mini store.

BSM: Yeah, it’s like going to a trade show almost. You’ve got the Apple booth, you’ve got the Samsung booth.

Alvarez: That’s right. One of the reasons we think they do that is because when people walk in they’re already kind of predisposed to what they want. So let that customer go in and get what they want and not have to go back into a line with everybody else.

In restaurants what we see is inefficiency in workflow. Michael and I were at the bar a couple days ago, and we were watching this waitress having to go from one table taking an order, to another table, to another table, to another table, and then she inputted the order. Well, that first table had to wait for all of these folks to get their orders placed.

Imagine a situation where that waitresses taking the order on a tablet and it’s being prepared as she’s going from table to table. So I think the education process for end users is really important to explain to them, “Yeah it’s a new system, but we’re going to help you serve that customer a lot faster and a lot better.”

BSM: Yeah – why are people still inputting data on paper today? It’s 2016! Jason, so that’s Luis’ take. Do you see any mobile POS applications in grocery? We haven’t come across anything that’s really widespread.

BSM: Not yet. On a side note, I’m glad you brought up Nordstrom Rack. That is actually my favorite place to shop, and I remember going in when they first implemented. Like any large retailer, they’re going to have an issue when that first comes out, but they work out the bugs really quick, and it’s a place I’ll stop on my way home. And, like you said, I’m in there, I’ve got 20 minutes, and it’s a great experience. I’m glad you brought that up.

From a grocery standpoint, though, there’s a very particular workflow for grocery, and the grocery industry is unlike any other industry out there when you look at the sales cycle of that is much, much longer than anything else that’s out there today.

I mean you see them today with the self-checkout. They’ll do some line busting there especially if there’s large items, they’ll come over. I haven’t seen a whole lot of them using tablets. They’re still using ruggedized devices whether it be from Datalogic or Zebra or Honeywell, or those types of things.

So I think it’s a little slower going there, but from margin standpoint what I’m hearing a lot of is after you consult with them and you’re asking them the right questions, there’s a lot of margin that could be made, not necessarily the tablet – we know that. The margins are in the peripheral stack around that, so you’ve got to sell the total solution, but also once you begin bundling things together like you do with your cable company, it makes it much harder for you to leave. If you have your internet cable and your phone through AT&T or Comcast, it’s much harder to leave.

So now you can bundle managed services in there and keep them in a contractual thing because now you’re running their POS, you’re running their network, you’re running possibly their security, their digital signage and, oh by the way, now you become their accountant’s best friend because all of that has got to integrate into their accounting platform on the back.

So there’s margin in managing all that on their behalf, and if anybody in this room is not really focused on getting into managed services and that as-a-service model, you really need to look at that because as margins in the tablet space continue to shrink and peripherals, that’s where the margins are going to come from.

BSM: Very good. And Business Solutions has preached for years that the successful folks, the folks you see that we have up on stage here, who we feature in magazine, are the total solution providers. Those so are the folks who know whoever owns the network owns the customer and all the peripherals that go off that. And mobile POS fits right into that.

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