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Now that we are most of the way through 2017, let’s focus on the trends of point of sale in the first half of the year. Most of the trends have carried over from last year but, they have grown or expanded into more complex solutions. According to Stephen Bergerson of RSPA, in the retail and hospitality space, the remaining months of 2017 will likely continue to see a continuation of trends toward mobility and cloud-based solutions and the emergence of unified commerce strategies.
- Tablet PoS Continues to Grow
Customer both in US and globally are continuing to ask for a mobile point of sale tablet solution. These solutions continue to be a mixture of options. Mobile point of sale is typically a tablet with a stand and an assortment of peripherals. However, manufacturers like Apple and HP have released a 12-inch tablet to provide users with more real estate on the display for transactions instead of the typical 8 or 10 inches.
Mobile PoS systems that enable fast, secure and convenient transaction in traditional and/or unique environments are quickly gaining more acceptance within businesses. Shipments of new mobile POS devices in general are projected to increase more than 400 percent by 2019, according to Mobile Payments Today. Tablet POS devices, in particular, are finding their way into increasingly more retailers as ISVs create applications as a bridge to your current business infrastructure. These solutions, and the variety they offer won’t be going anywhere any time soon, so it’s crucial that PoS VARs are able to offer different mPoS solutions – it’s also a great option in getting customers to upgrade or enhance their current systems.
- The uncertainty of EMV
EMV has evolved in the retail marketplace and is continuing to progress. According to the US Payments Forum, new data from the Strawhecker Group shows 52 percent of merchants today are enabled to accept chip payments, 36 percent have contactless-capable terminals, and 28 percent of those contactless capable terminals are activated to accept contactless cards.
Reviewing these numbers tells us that there are retailers that have not adapted yet. The initial deadline to transition to EMV was October 2016. However, not all stores have made the transition and are rolling the dice with their businesses. So, who is liable if your business is hacked? There are essentially three players involved: the credit card companies, the bank that backs the credit card, and the merchant. To start the credit card companies will never be liable unless criminals find a way to exploit their card technology. Secondly, the bank that banks the card, if they provide you with an option to upgrade to a card with a chip, they are not liable for losses incurred. Lastly, the merchant, if the credit card company and bank provided the consumer with an EMV card, but the merchant has yet to adopt the technology, the business if financially liable. The timing to process payment with EMV is concerning though. Consumers value their time and having the ability to check out quickly is crucial.
UL Transaction Security reports that Mastercard, Visa, American Express and Discover have all announced solutions to improve upon perceived Contact EMV chip transaction speed at US merchant point of sale. Currently the average total transaction time was measured to be around 13 seconds. Many merchants will accept contactless instead of EMV as the frustration grows.
- Brick and Mortar stores vs. Online
Brick and mortar sales seem to be alive and well, despite its online competition. Success, however, is only happening for a select amount of companies. The traditional brick and mortar stores in malls and shopping centers are shuttering. The rise of the e-commerce giant, Amazon, has changed the guidelines of shopping. Amazon has figured how to attack the media and entertainment categories, like books and music, but the ease of returns has made shopping online cheap, easy, and risk-free for clothing and apparel. Consumers are using stores like Macy’s or JC Penney to try on clothing and then they order on Amazon because the price is cheaper.
The Atlantic reported that there have been nine retail bankruptcies in 2017. J.C. Penney, RadioShack, Macy’s, and Sears have each announced more than one hundred store closures. Many apparel companies’ stocks have hit lows and have had to make changes to brands and abandon store concept. Gas prices are currently low, the unemployment rate is down and there is an increase in wages. So how is it possible that retail stores are struggling so much? The explanation is simply that people are buying more stuff online than before. Amazon creates the perfect buying experience, with reviews and a plethora of information to find out everything possible about the product you are buying. Let’s not forget that you need the recommended item that goes along with your original search, and since you went with the second item, why not buy a third. Also, joining their partner program unlocks additional features and provides free two-day shipping.
Another reason for the decline is the fact that America, historically, built way too many malls. There are about twelve hundred malls in America today. To tackle their online competitors, the physical stores are offering an online-like experience by making tablets available for transactions and an information lookup station. Best Buy is a perfect example – they provide stations at the ends of aisles to check stock or specifications. Shoppers can then place their orders to ship to their home or pickup at the store at a later date. This technique allows the customer to properly review the product by seeing it in person to test it in any way they see fit.
Target and Walmart, have also adopted this and have had some success. Walmart continues to have success by increasing their online sales quarterly and other retailers will start to mimic their methods. The future of retail will combine different elements, in many cases a retail store will become a local warehouse.
- Expanding the Cloud
The trend to deploy POS systems and peripherals in the cloud will gain traction in a pay-as-you-go model that makes it easier for customers to access the latest technology and keep their systems updated, according to the RSPA. Microsoft has adapted the cloud model by charging customers a monthly price to have access to the latest Office programs as well as additional cloud services, and Adobe has instated an online, cloud-based subscription service as well. Many independent software vendors are also acclimating themselves, and their services, with the functionality of the cloud. This provides opportunities for recurring revenue streams, as subscription services become the norm throughout software companies.
- Traditional Point of Sale Systems Designed Like MPOS
With the popularity of the table mobile point of sale systems, many traditional all in one terminals are creating a solution similar in size and footprint but with loads of features and performance. A traditional tablet retail solution is typically 10 inches but manufacturers are designing a terminal that offers a thin 14” wide format projective capacitive touch display and a very slim pc built in with high performance. These types of solutions will help manufacturers become competitive against the mobile table solutions.
All-in-one hybrid options have been on the rise, which provide a slim, compact system that achieves the look of an mPoS solution. However, the stationary hybrid systems provide theft protection that traditional tablet systems may not be able to incorporate. The PoS systems of 2017 and beyond have become more diverse, and will likely continue to evolve this way as merchants and consumers alike develop different needs, and more options become available.
The year isn’t over yet, which still leaves time for trends to shift as we head into Q4. However, looking back early can often help VARs and distributors to assess trends, track sales, and determine plans for the year or years to come. It’s never too late to look back on the year and track national or international technology trends as they affect your business.