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The retail industry is undergoing a profound transformation. Brands are being controlled by empowered consumers with growing expectations in terms of speed, convenience and personalization.
Speed in the sense of getting their products faster, convenience in how they are allowed to buy, pay and receive these products and personalization which allows them to feel as unique as possible thanks to in-depth knowledge and understanding of their needs.
Leading worldwide retailers are investing to systematically understand and serve these increasingly powerful consumers and are also investing in customer engagement. In this new consumer omnichannel age, innovation is no longer a 'nice to have' in any sales channel, but a must-have. This innovation is especially true in physical stores, where sales in coming years will count for over 95% of total sales worldwide. POS solutions are also evolving and they are no longer a simple cashier but the real brain of the store, responsible for delivering the promise of a seamless omnichannel shopping experience. For brick-and-mortar retailers it is critical then to adopt new generation POS solutions that are aligned with customer expectations. Here we present 10 ways to increase sales with your next new generation POS.
This e-book will assist retail business and IT managers to understand which are some of the key elements that can help increase sales with the next new POS generation.
Inventory visibility has become a must for retailers aiming to succeed in today's omnichannel reality. In the words of Terry Lundgren, CEO of Macy's Inc, omnichannel is very much about inventory optimization through technology, and inventory visibility across all stores and channels is the key enabler. For Macy's true inventory visibility provides multiple benefits for shoppers and retailers:
At the stores it means giving associates a POS solution that provides detailed inventory information across the enterprise that can be used to simply inform the customer or to fulfill an order generated in another store or through the online channel. This capacity enables the adoption of store fulfillment strategies that help retailers to increase sales, increase inventory turnover and minimize markdowns.
According to eBay Enterprise, with a potential of 20% or more incremental sales, a $50 million online retailer is leaving more than $27,000 per day on the table until ship-from-store is implemented.
Without a doubt, mobility has become one of the driving forces leading the omnichannel transformation today. For brick-and-mortar retailers, the use of mobile technologies provides the opportunity to deliver new in-store shopping experiences for both associates and customers. Mobile POS is a clear example of how mobility is helping retailers to improve the in-store shopping experience. Empowered store associates are armed with modern mobile devices that provide detailed information about products and customers and have the capacity to process the whole transaction until payment. This enables them to provide a truly customized sale and gives them the opportunity to directly influence the customer where buying decisions are made thus increasing the chances of closing a sale.
The adoption of a mobile POS solution also has a positive impact over the brand image, which can help to increase the number of people walking into the store and ultimately help to increase customer sales and loyalty.
Moreover, a mobile POS solution can also help to reduce queues during busy periods, so sales staff can efficiently set up mobile POS or kiosks to help to accelerate sales payments, the returns process and thus reduce the potential loss of sales during crucial periods of the year, like Christmas, in the winter or summer sales, or other holidays.
Software vendors providing a mobile POS solution follow two different approaches:
Migration to mobile is not slowing down, but increasing as several industry reports confirm. Although the interest in mobile POS solutions is rapidly growing amongst different retail subsectors, hardgoods and softgoods specialty retailers today are showing greater interest and are leading the adoption of these solutions.
According to Boston Retail Partners, approximately 300% more retailers plan to deploy mobile POS technology in the next two years.
Consumers demand more flexibility when shopping. And this clearly applies to the way products are delivered. Different delivery options can be either asked for by consumers for convenience or directly proposed by retailers as a way to improve service or as a tool for saving the sale.
As an example, when a product is out of stock in the store, the retailer allows the customer to pick up the product in the same store during the next few days, pick up the product in another store or sends it to the customer's home.
Travelling customers may be interested in sending their purchases home, either immediately or by scheduled delivery. Or goods may be difficult to manoeuvre due to big dimensions. Another option is store pickup for online purchases.
All these options require the point of sale to be able to manage these special orders but also represent a supply chain management challenge for the retailer.
Consumers demand more flexibility when shopping and that includes offering different options such as choosing when and how they receive their items as some studies reveals.
According to Business Insider4 beacons are considered one of the most important technologies in retail since the mobile card reader, and will see triple-digit growth rates over the next few years. Location-based app notifications powered by beacons increase user engagement in apps, and drive more in-store sales. For this reason, retailers are increasingly looking to beacons to enhance the in-store shopping experience while simultaneously bridging their physical and online experiences.
When placed in a store, beacons use Bluetooth technology (BLE or Bluetooth Low Energy) to detect nearby smartphones and send them media such as ads, coupons or supplementary product information. They can also be used as point-of-sale systems and to collect information on those consumers.
According to the same Business Insider report, the beacon installed base will consist of 4.5 million active beacons overall by the end of 2018, with 3.5 million of these in use by retailers.
For example in the US, half of the top 100 retailers already started to test beacons in 2014, and it is expected that they will have this new technology installed in a third of their store locations by the end of 2015.
But, what does this mean for retailers? The use of beacons provides retailers with benefits in three main areas:
According to Boston Retail Partners, approximately 200% more retailers plan to use geolocation within three years.
RFID lets retailers identify individual items, cases or pallets in the same way bar codes do, but wirelessly, with richer data and without the need for a line of sight. It's been more than a decade since Walmart shook the retail world with a bold plan to plaster its supply chain with RFID. But the reality is that RFID adoption has been low, mostly due to the high cost of the tags. But the situation has changed and now retailers are starting to consider it more seriously, especially now when inventory accuracy and control have become even more critical in today's omnichannel world.
The tags, which contain a simple chip and antenna, are embedded into product pricing labels, such as those that hang from apparel. They are powered by the radio signal emitted from readers, which can be hand-held or fixed in place. This allows the store associate to check the inventory of an entire rack of hanging dress shirts, for example, by simply walking around the display with a handheld reader. The software then displays a list of sizes or styles that need to be replenished, and the associate can narrow in on the needed items in the stockroom by turning the reader to a "Geiger counter" setting.
But RFID is now also becoming a way to improve the store shopping experience. Adding RFID tags to the products in the store and using smart mirrors that are able to read these tags, allows retailers to present product information to the consumer seamlessly.
The same concept can be applied to fitting rooms. At the point of sale the use of RFID tags can also speed up the check out process replacing the traditional barcodes, which also helps to improve the shopping experience.
Leading retailers like Macy's, Saks and Lord & Taylor are all jumping onto the RFID bandwagon. RFID enables precise visibility into exactly what inventory is available and where, reducing the risk of out-of-stocks. In pilots, Macy's saw a 50% higher sales growth rate for products tagged with RFID.
In pilots, Macy's saw a 50% higher sales growth rate for products tagged with RFID.
Clienteling is the set of business processes retailers use to increase customer lifetime value through the delivery of a personalized shopping experience. Clienteling delivers rich data to an associate's fingertips, allowing him or her to provide a personalized experience that will improve customer satisfaction and increase revenue. This is not really a new capability but something that has gained more and more importance in today's omnichannel reality.
Clienteling provides a powerful single view of the customer, with information like customer profile, summary of activity across all channels, purchasing history, wishlists... This information can be linked with available detailed data about products and promotions (like product characteristics, product catalog browse, inventory visibility) for associates to provide a real assisted sale, for example, by recommending complementary products or informing about applicable promotions and discounts that the customer is eligible for based on their current basket. As a result this helps to increase crossselling and up-selling possibilities and provides powerful save-the-sale tools that will all help to increase sales.
Clientelling helps to increase cross-selling and up-selling opportunities and provides powerful save-the-sale tools that will help to increase sales.
Loyalty programs have a simple objective: engage and reward customers to enhance brand experience and increase sales, creating lasting and profitable relationships with customers. Ultimately, to get brand advocates for life. In today's omnichannel world a true omnichannel loyalty program will engage the customer at the right time, at the right place, through the right channel, with the right message.
At the POS this means several things today, ranging from the availability of clienteling features mentioned before to the use of more traditional strategies like points management, coupons or special targeted promotions, that are not really new things but are clearly influenced by consumer access through multiple channels.
Traditional loyalty programs consider rules to transform customer purchases into rewards. That is earning points for each sale, rewarding specific products with extra points. Afterwards, customers can use the earned points to pay at the next sale or to be translated into direct discounts. Real omnichannel loyalty programs currently offer the possibility to redeem points in one channel that have been gained in a different one, for example accumulated points at a point of sale that can be presented and used in the online channel.
Another method used to reward loyal customers is coupons. These are sent via email, text message or even in social networks like on the Retailer page on Facebook. Coupon codes are given in the store by customers so a discount is applied automatically or they are offered another type of promotion.
Loyalty management aims to create lasting and profitable relationships with customers.
An effective way to increase sales and build loyalty among customers is the use of discounts and promotions. Retailers need flexible engines that effectively run and track personalized promotion campaigns, from the very simple one to more complex constructions. Engines need to allow them to create discounts of any type, targeted to a specific group of customers, member lists and tiers and award benefits by product categories, or specific products, allowing them to include or exclude products or customers from the promotions. Engines need to be programmable for specific times or periods, so promotions are automatically applied, and deactivated when the range of dates is not valid anymore. And most importantly, created promotions must be quickly and seamlessly transmitted to the stores in order to reduce time-to-market.
There are many other examples of discounts and promotions that are a must for today´s engines. To mention a few: the classic steep discount, e.g a 20% discount on specific items, has proven to be effetive for selling overstocked items, or when the expiry date is approaching. Running this type of campaign on a regular basis means that customers often associate the place with good deals that will keep them coming back. Offering free samples with each purchase enables customers to discover new products based on their preferences. Or similar promotions of buying 2 but paying for 1 of a different or the same product. Another effective promotion proven to encourage sales is packs of products at special price. They are positively accepted among customers, and demonstrate that packs encourage buying products that customers would otherwise not buy.
Best deal discounts are also well received by customers, where the POS system calculates the best deal for the customer depending on the chosen products and the available promotions. This kind of technique helps to build trust between the retailer and customers which will almost certainly have a positive impact on future sales.
Promotions are typically communicated to consumers by e-mail or in a text included in the printed ticket. Therefore POS systems should be able to manage such e-mail campaigns and also to integrate with social networks.
POS solutions must also be able to manage discretionary discounts that are applied to the ticket for a concrete reason, such as, for example, a product defect. In these cases it is also important that the POS supports managers' approvals to avoid fraudulent activities.
Retailers need flexible engines that effectively run and track personalized promotion campaigns.
After several years of talking about the imminent widespread adoption of mobile payments by retailers it seems we are finally in a situation where this can happen and most industry analysts already predict that mobile payments will finally move to the mainstream, mainly driven by the growing interest of consumers but also now thanks to the new existing technologies and vendors that have invested to provide the technologies that can make it happen. Apple Pay is of course at the center of this process since its launch last year. The Apple Pay adoption has come quickly and easily, and now other vendors such as Samsung, Google or Paypal are just trying to battle against Apple with their own solutions. LoopPay's acquisition by Samsung and Softcard's acquisition by Google are two great examples of how the market is rapidly changing and of the strategies different vendors are following. In other territories like China, Alipay is also consolidating itself as a market leader that could become a future competitor for all these vendors in other markets.
The mobile payments war exists not only in the field of technology vendors but also in the field of retailers. Some of them are investing in their own mobile payment technologies. This is the case in the US of the Merchant Customer Exchange (MCX), a retailers association including Walmart, Best Buy, Sears and others, that have invested in their own solution and now it is also competing against Apple, Samsung or Google solutions. CurrentC, the MCX's mobile payment solution, is a mobile wallet that lets customers save, earn participating merchant loyalty rewards and pay across their growing network of merchants.
Innovation in mobile technologies will however not stop here. Retailers and technology vendors are continuously investing to create higher consumer engagement and better shopping experiences. A good example is the Australiabased food retailer 100% Genuine Imported
Foods Chain Stores that has challenged China's current retail payment system by launching the technology "facepay" in Shanghai. The smart payment system is supported by face recognition technology and will be used for the first time in chain stores in China. When customers come to the chain store, they only need to show their faces and hands before cash registers. Once they are recognized, the payment is completed.
According to Boston 350% Retail Partners, more retailers plan to support NFC payments by October 2015.
To get in-depth knowledge about customers and react in a timely manner to habits and behavioural changes, retailers today rely on tools that provide actionable insights into each process around the shopping experience, including detailed visibility across different channels, performance of different promotions, products or product families and detailed follow up of all related supply chain management activities.
At the stores, store managers require detailed information about sales per associate, per hour, best selling products and categories, total discounts, payments by payment method, returns... Easy access to this kind of information in near real time will facilitate a greater understanding of how well a store is performing and can make a huge difference in meeting sales targets.
New generation POS solutions provide powerful embedded analytics capabilities that will allow store managers to get a clear picture of the store performance in near real time. They provide a fast and direct way to achieve results by means of dashboards, pre-built data models, reports, or self-service analytics to deliver quick on-demand reporting and interactive analysis of retail data.
New generation POS technology provides powerful powerful embedded analytics capabilities that will allow store managers get a clear picture of store performance in near real-time.
Retail is one of today's fastest changing industries. Retailers must be ready to embrace change and innovation as a way to stay competitive while being ready to serve increasingly demanding consumers. In this reality technology is dramatically changing the way retailers do business and interact with their customers. In the stores, POS solutions have evolved from a simple machine to the real brain of the store, responsible for delivering the promise of a seamless store shopping experience, a must in today's omnichannel retail landscape. New generation POS systems are also the perfect partner to help to increase sales. Their omnichannel and customer-centric nature, flexibility and advanced technology empower retailers to meet the client's expectations, ensuring that they save the sale and build longterm profitable relationships with customers.
Click here to download this eBook in PDF format.