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BRP 14th Annual POS Benchmarking Survey
BRP 14th Annual POS Benchmarking Survey
BRP 14th Annual POS Benchmarking Survey
2013
Signage'
Email'
Kiosk'
Apps'
Checkout'
Mobile' Website'
SMS'
Sponsored by:
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EXECUTIVE
SUMMARY
Welcome
to
our
14th
Annual
POS
Benchmarking
Survey! The
retail
industry
continues
to
evolve.
We've
heard
many
times
over
the
years
about
the
demise
of
Department
Stores,
the
glut
of
retail
storefronts,
and
how
the
retail
mall
will
become
irrelevant.
Fact
is,
people
like
to
shop
and
for
many
different
reasons.
Shopping
is
theater
for
the
savvy
retailer.
Not
all
can
be
satisfied
on
a
screen
the
size
of
a
business
card
or
alone
in
front
of
a
computer.
Some
products
still
require
a
look
and
feel
and
customers
enjoy
the
social
aspect
of
shopping.
But
more
and
more
customers
expect
to
be
able
to
interact
within
the
retail
environment
with
their
mobile
device.
Many
times
associates
have
less
information
than
their
customers.
So
while
the
game
continues
to
change,
the
challenge
for
retailers
is
to
figure
out
how
to
best
serve
their
customers
across
all
channels.
Todays
customer
is
unlike
any
the
retail
industry
has
ever
seen.
She
has
in
her
hands
more
information
and
more
capabilities
than
we
could
have
imagined
even
twenty
years
ago.
While
the
customer
has
always
been
the
center
of
the
universe,
she
now
defines
the
point-of-sale.
BRP,
along
with
our
sponsors,
is
pleased
to
present
this
survey
of
the
transformation
of
the
retail
point- of-sale
and
store
system
technology
trends.
In
the
next
few
pages,
we
examine
a
number
of
areas
critical
to
retailer
success
customers,
associates,
and
technology.
We
sincerely
hope
you
enjoy
reading
it.
Boston
Retail
Partners
surveyed
more
than
500
North
American
Retailers
for
the
14
Annual
POS
Benchmarking
Survey.
Online
responses
were
solicited
in
October
-
December
2012.
Respondents
were
generally
C-level
executives
or
VP/Directors
of
Store
Systems
or
Information
Technology.
Boston
Retail
Partners
is
an
innovative
and
independent
retail
management
consulting
firm
dedicated
to
providing
superior
service
and
enduring
value
to
our
clients.
Boston
Retail
Partners
combines
its
consultants'
deep
retail
business
knowledge
and
cross-functional
capabilities
to
deliver
superior
design
and
implementation
of
strategy,
technology,
and
process
solutions.
The
firm's
unique
combination
of
industry
focus,
knowledge- based
approach,
and
rapid,
end-to-end
solution
deployment
helps
clients
to
achieve
their
business
potential.
th
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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TABLE
OF
CONTENTS
EXECUTIVE
SUMMARY
TABLE
OF
CONTENTS
INTRODUCTION
MOBILE
TRENDS
OPPORTUNITIES
OMNI-CHANNEL
TRENDS
OPPORTUNITIES
STORE
TRENDS
OPPORTUNITIES
POINT-OF-SALE
TRENDS
OPPORTUNITIES
INFRASTRUCTURE
HARDWARE
SOFTWARE
NETWORK
TRENDS
OPPORTUNITIES
PAYMENT
TECHNOLOGY
TRENDS
OPPORTUNITIES
MARKETING
TRENDS
OPPORTUNITIES
ECONOMIC
OUTLOOK
CONCLUSION
SURVEY
METHODOLOGY
ABOUT
BOSTON
RETAIL
PARTNERS
ABOUT
OUR
SPONSOR
-
EPICOR
ABOUT
OUR
SPONSOR
-
MICROS-RETAIL
ABOUT
OUR
SPONSORS
-
RETALIX
2 2 4 5 6 6 8 8 10 11 12 12 14 15 16 17 18 19 19 20 20 21 22 22 22 22 23 23 24 25 26 27 28 29
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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INTRODUCTION
The
lines
have
blurred
among
online,
mobile,
and
brick-and-mortar,
and
new
avenues
for
shopping
continue
to
appear
hello
T-commerce
(Twitter
commerce)!
Rather
than
the
idea
that
stores
will
soon
become
obsolete,
there
is
an
acknowledgement
that
synergies
need
to
exist
between
the
channels.
Not
solely
an
online,
mobile,
catalog
or
store
presence
but
"Omni-channel".
Todays
consumers
have
the
power
and
capability
to
shop
when,
how,
and
where
they
want,
and
to
move
seamlessly
across
all
channels.
In
the
"old
days",
consumers
would
use
their
high-speed
Internet
connection
with
their
desktop
or
laptop
computer
at
home
to
search
for
products
and
information.
Now,
consumers
have
the
same
bandwidth
in
their
pockets
and
can
"Showroom",
scanning
barcodes
in
the
store
and
shopping
electronically
for
the
best
deal.
The
balance
of
power
has
always
been
in
favor
of
the
consumer,
but
it
is
even
more
so
today
with
the
broad
availability
of
shopping
and
product
information.
Even
store
employees
are
finding
themselves
utilizing
customer-facing
tools
such
as
apps
or
the
retailer's
website
to
meet
customer
demand.
Unfortunately,
this
is
generally
because
customers
have
access
to
more
information
and
tools
than
the
associates
themselves
since
retailers
are
not
providing
the
information
needed.
If
a
particular
size,
color,
model
or
style
is
not
available
in
the
store,
the
associate
can
purchase
the
item
on
behalf
of
the
customer
and
have
it
shipped
directly
to
their
home.
Endless
aisle
-
the
concept
of
selling
inventory
that
is
not
in
the
store
-
is
a
game-changer
for
retailers,
who
can
carry
less
merchandise
in
the
store
or
even
build
smaller
stores,
and
for
customers,
who
benefit
from
an
enhanced
shopping
experience
with
more
merchandise
offerings.
Retail
is
generally
thought
to
be
a
zero-sum
game.
More
and
more
sellers
competing
for
a
very
large,
but
fairly
stable
pool
of
discretionary
spending.
Perceptive
retailers
understand
this
and
will
continue
to
compete
hard
by
using
all
their
channels
synergistically.
Consumers
expect
this.
5.##How#important#are#the#following#to#your#organiza6on?#
Customer$service$ Ecient$processing$at$the$register/speed$of$service$ Employee$product$knowledge$ InGstock$posiHon$ Product$pricing$ Product$assortment$ OmniGchannel$integraHon$ Product$reviews/product$educaHon$ Personalized$promoHons$ 21%$ 16%$ 9%$ 25%$ 36%$ 45%$ 30%$ 36%$ 34%$ 51%$ 30%$ 30%$ 25%$ 50%$ 50%$ 48%$ 52%$ 14%$ 64%$ 34%$ 43%$ 86%$ 27%$ 11%$ 2%$ 7%$ 2%$ 14%$ 2%$
2%$5%$
Self$service$opHons$ 5%$
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Pure play e-commerce will continue to erode brick-and-mortar sales, particularly as certain categories become more commoditized. Software, video, and books are great examples of disintermediation, i.e. cutting out the middleman, by completely changing the way they are delivered to the customer. Unsurprisingly, customer service continues to be a focus for retailers. As the competition for consumer dollars increases and the number of shopping options continues to expand, customer service is a key differentiator and those retailers who get it right can ensure strong customer loyalty. Retailers in this years survey indicated that customer service is the most important area to the organization with 97% stating it is important/very important to the organization. This is closely followed by more specific areas of customer service, including efficient processing at the register (91% indicated it is important/very important), and providing employees more product knowledge to help them assist the customer (84% indicated it is important/very important). (Exhibit 1) It is interesting to note that the retailers surveyed feel that self-service options are less important. As our world becomes more mobile, our smartphones offer consumers the ability to take on customer service options such as price checks, scanning barcodes for product information or even as a checkout device. The challenge remains for retailers as they work to understand what their specific customers define as customer service and how they can meet their customers needs. With customer service and efficient processing at the register as the key focus of top retailers, lets take a look at how retailers are addressing key areas in their organization: Mobile Omni-Channel Store Point-of-Sale Infrastructure Payment Technology Marketing
MOBILE
There has been a huge technology shift in the last few years and mobile shopping has been the driver. Mobile technology is becoming ubiquitous, from the local food truck utilizing Square to swipe your credit card and email you the receipt, to the mobile shopping app at your local supermarket allowing you to use your smartphone as a scanner as you shop, check out, and go. According to a recent survey from Perception Research, 76% of smartphone owners use their phones while shopping. The technology is now mainstream and is revolutionizing the shopping experience.
Blackberry( 20%(
Apple( 37%(
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Mobile
point-of-sale
(mPOS)
enables
the
customer
to
make
the
purchase
at
the
moment
she
wants
to
purchase,
and
for
the
retailer
it
offers
the
ability
to
capture
the
sale
when
the
customer
makes
the
decision
so
there
is
less
probability
that
she
changes
her
13.$$What$vendor$so0ware$does$your$company$ mind.
Exhibit
3:
Mobile
Device
Software
currently$use$for$its$mobile$devices?$
Mobile
shopping
offers
flexibility
and
capabilities
to
Motorola0 12%0 customers
and
raises
the
bar
on
what
customers
now
want
Other0 13%0 delivered.
Global0Bay0
19%0
Trends
While
mobile
is
ubiquitous,
the
opportunities
that
it
can
Proprietary/ Homegrown0 offer
retailers
and
consumers
are
still
being
explored.
56%0 Mobile
has
only
made
inroads
in
the
retail
industry
for
the
last
few
years
with
the
vast
majority
of
mobile
devices
utilized
at
the
POS
for
less
than
four
years.
(See
Exhibit
25)
While
Apple
seems
to
be
the
hardware
of
choice
with
37%
of
the
retailers
utilizing
it
for
their
mobile
devices,
it
seems
that
retailers
prefer
to
utilize
Proprietary/
homegrown
software
on
their
mobile
devices.
(Exhibits
2
and
3)
Since
many
retailers
have
created
their
own
apps
based
on
the
Droid
or
iOS
operating
systems
this
makes
sense.
Opportunities
There
is
much
interest
in
customer-facing
mobile
services
and
the
opportunities
are
endless.
Offering
customers
the
ability
to
use
social
networking
through
their
mobile
phone
to
share
their
shopping
experience
with
friends
is
one
area
of
interest.
While
41%
of
the
retailers
offer
this
ability
to
their
customers,
and
another
33%
have
plans
to
implement
this
capability,
more
than
a
quarter
of
the
retailers
have
no
intention
of
implementing
this
option.
(Exhibit
4)
This
is
an
area
that
we
expect
to
grow
tremendously
over
the
next
few
years.
According
to
a
recent
Harvard
Business
Review
study,
consumers
use
their
smartphones
19%
of
the
time
for
socializing.
In
the
last
few
years
consumers
have
consistently
demonstrated
their
desire
for
feedback
and
interaction
with
their
friends
and
similar
individuals,
by
providing
this
ability
while
they
shop
the
retailer
helps
develop
further
customer
intimacy.
Brick-and-mortar
retailers
have
to
figure
out
how
to
embrace
this,
because
the
social
aspect
to
shopping
is
a
big
reason
customers
still
go
to
the
store.
26.$$What$is$the$implementa0on$status$of$the$following$customer8facing$mobile$services?$
Share#with#a#friend#via#email#or#social#networking# Smartphone#app# Product#informa<on#(price,#loca<on,#availability,#research)# Shopping#list/wish#list# Mobile#coupons,#specials,#promo<ons# Electronic#receipt# Mobile#wallet# 15%# 14%# 14%# 14%# 9%# 9%# 6%# 6%# 9%# 29%# 24%# 46%# 24%# 10%# 20%# 15%# 30%# 40%# 50%# 60%# 26%# 26%# 26%# 26%# 26%# 66%# 12%# 18%# 20%# 59%# 70%# 80%# 90%# 100%# 44%# 45%# 23%# 24%# 34%# 26%# 17%# 9%# 46%# 14%# 34%# 11%# 11%# 9%# 9%# 9%# 26%# 14%# 11%# 20%# Implemented#and#working# well# Implemented#but#needs# improvement# Plan#to#implement#in#<2# years# Plan#to#implement#in#>2# years# No#plans#to#implement#
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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We are seeing some improvements in retailers offering more services to their customers via mobile devices. 89% of the respondents indicate that they have plans for a smartphone app; either the retailer already has one or has definitive plans to implement it. Retailers also are testing mobile coupons, specials, and personalized promotions to customers as they walk in the store. More than one-third of the retailers surveyed offer this ability now and another 57% plan to offer these services within the next few years. The mobile trend began with retailer websites available via mobile to allow customers to access the brand from their smartphones, but the possibilities continue to expand as mobile can be used for interactive customer service, to drive store traffic, as a sales channel, and to provide in-store product information. (Exhibit 5) For the first time, with a mobile device, the POS is out on the floor and being utilized in a collaborative fashion, and retailers need to put more thought into the look and feel of the point-of-sale, since it is no longer hiding behind a counter. This mobility is a benefit. By making the POS mobile the associate is also able to be mobile and engage with the customer instead of hiding behind a wrap desk. This guided selling technique is the future.
Important#
Least#important#
The
next
step
in
mobile
is
enabling
customers
with
their
own
POS
-
cPOS
-
customers
already
have
the
hardware,
why
not
leverage
it?
The
future
is
now;
POS
is
literally
in
your
customers
hand.
Weve
already
given
customers
most
of
the
traditional
functionality
that
exists
in
POS,
and
with
mobile
shopping
cart
and
payment
abilities,
retailers
have
created
cPOS.
This
can
now
be
leveraged
to
create
a
true
customer-centric
Omni-channel
shopping
experience
where
a
sales
associate
can
be
empowered
to
interact
with
customers
in
new
and
innovative
ways.
Retail
is
never
going
to
be
the
same,
and
the
Appleization
of
retail
was
just
the
beginning.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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OMNI-CHANNEL
Omni-channel
retailing
is
an
evolution
of
multi-channel
retailing,
with
the
focus
on
a
seamless
approach
to
the
customer
experience
across
all
available
channels.
Recent
research
from
Perception
Research
Services
indicates
that
consumers
are
combining
the
digital
and
non-digital
worlds
to
make
purchases,
rather
than
limiting
themselves
to
one
channel.
The
Omni-channel
customer
uses
more
than
one
shopping
channel
simultaneously,
and
retailers
who
employ
Omni-channel
retailing
track
customers
and
their
shopping
habits
across
all
channels.
Omni- channel
retailing
offers
a
one-to-one
connection
between
the
retailer
and
the
customer.
This
experience
harkens
back
to
early
retailing
when
this
was
how
shop
owners
interacted
with
their
customers.
They
knew
the
customers
name
when
she
walked
in
the
door,
they
knew
her
family
members,
what
she
was
interested
in,
even
what
size
she
was,
to
be
able
to
immediately
offer
her
items
that
she
would
be
interested
in.
Technology
is
giving
us
an
opportunity
to
go
back
to
the
future
to
gain
intimacy
again
with
the
customer
instead
of
alienating
them
as
we
often
have
in
the
past.
Omni-channel
retailing
offers
customers
a
complete
brand
experience
across
all
touchpoints.
Integration
of
channels
gives
retailers
visibility
into
customer
purchase
patterns,
return
frequency,
shopping
habits,
and
merchandise
preferences.
Leveraging
this
information
across
channels
offers
retailers
a
depth
and
breadth
of
customer
data
that
could
not
be
gained
through
a
single
channel.
The
key
to
delivering
this
experience
to
customers
is
to
integrate
all
shopping
channels
utilizing
real-time
architecture.
Trends
Retailers
continue
to
expand
their
shopping
channels
with
the
latest
proliferation
being
the
mobile
channel.
It
was
not
long
ago
that
having
a
web
presence
was
unusual
now
the
vast
majority
of
retailers
offer
an
online
shopping
experience,
and
more
than
half
also
offer
a
mobile
shopping
experience.
(Exhibit
6)
And
now
the
next
step
is
offering
customers
the
best
of
both
Exhibit 6: Organization Channels worlds
by
giving
them
the
6.##Please#indicate#all#channels#that#your#organiza5on#employs.# convenience
of
online
shopping
with
its
rich
content
and
100.0%% Store% customer
reviews
and
offering
84.1%% the
stores
ability
to
allow
Web%/%Online%Order% customers
to
examine
the
Mobile%(cellphone,%PDA,%Electronic% 54.5%% Shopping%Assistant,%etc.)% merchandise
and
immediately
36.4%% Kiosk% have
the
item.
It
is
allowing
them
to
order
online
and
return
22.7%% Catalog% to
the
store,
or
go
to
the
store
to
4.5%% Wholesale% touch
and
feel
an
item
and
order
the
correct
size
from
their
smartphone
as
they
stand
in
the
store.
It
is
allowing,
and
even
encouraging
customers
to
research
products
and
giving
them
access
to
as
much
information
as
possible
to
help
drive
the
sale.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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27%#
Imagine
offering
the
customer
the
ability
to
ship
the
item
she
wants
to
purchase
directly
to
her
home
so
they
she
doesnt
have
to
carry
it
around.
The
retailer
can
then
fulfill
the
order
through
the
DC
and
leave
the
store
set
intact.
The
customer
is
happy
because
she
doesnt
have
to
drag
merchandise
around
and
the
retailer
is
happy
because
they
didnt
have
to
pay
to
ship
an
item
twice
once
from
the
store
to
the
customer
and
again
from
the
DC
to
the
store
to
replenish
the
item.
This
model
also
allows
some
retailers
the
possibility
of
carrying
less
inventory
in
the
store,
and
requires
less
real
estate.
The
idea
is
to
offer
visibility
and
interactivity
across
all
channels
so
the
customer
is
able
to
access
the
same
type
of
experience
from
any
touchpoint.
To
accomplish
this,
retailers
must
be
able
to
flow
transactions
and
data
in
real-time.
While
we
see
retailers
working
on
flowing
real-time
transaction
data
at
the
POS
with
three-quarters
of
the
respondents
already
doing
this,
we
also
see
that
nearly
20%
have
issues
with
the
transaction
flow.
(Exhibit
7)
There
are
also
still
a
few
retailers
who
do
not
have
plans
to
do
this
anytime
soon.
Returns
management
and
Inventory
information
in
real-time
are
also
areas
where
retailers
are
working
to
expand
the
capabilities,
but
many
have
issues
with
the
implementations.
This
is
a
critical
piece
that
retailers
need
to
address.
Of
the
62%
of
respondents
that
offer
returns
management,
half
of
them
are
having
issues.
An
easy
way
to
drive
a
customer
away
is
to
create
a
painful
returns
policy.
When
we
asked
retailers
about
their
organizations
plans
for
Omni-channel
retailing
we
found
that
21%
have
already
implemented
a
centralized
technology
platform
with
another
45%
planning
to
do
so
in
the
next
few
years.
(Exhibit
8)
This
is
an
increase
over
last
year
when
15%
had
implemented
a
centralized
platform
and
38%
were
planning
to
implement
in
the
next
few
years.
Another
big
change
is
that
last
year
nearly
half
the
respondents
had
no
plans
to
implement
a
centralized
platform
this
year
the
number
has
decreased
to
33%
of
retailers.
As
we
indicated
in
previous
surveys,
to
effectively
support
the
Omni-channel
experience,
retailers
need
tight
integration
across
multiple
systems
and
a
strong
Service-Oriented
Architecture
(SOA)
layer.
This
year
retailers
realize
the
importance
of
a
centralized
platform.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Plan#to#implement# in#<#2#years#
Cloud#or#Virtual#POS# 3%# 7%# 3%# Centralized#POS#plaDorm#(i.e.#hosted#point5of5sale)# 3%# 13%# Customer5owned#mobile#device#as#POS# 0%# 15%#
No#plans#to# implement#
SOA technology enables a true Omni-channel environment and ensures exceptional customer service while retailers simplify their support structure and lower costs. While last years survey found 34% of the retailers planning to utilize a middleware/SOA layer as an enabler, this year finds 60% of the retailer having already implemented or planning to implement this technology. (Exhibit 9)
Opportunities
Retailers
continue
to
inch
towards
offering
customers
the
seamless
shopping
experience
desired
across
channels.
While
we
see
a
trend
in
including
a
middleware/SOA
layer
to
enable
the
Omni-channel
vision,
there
are
still
issues
and
opportunities
retailers
need
to
tackle.
(Exhibit
10)
25.$Please$indicate$whether$your$organiza7on$u7lizes$a$middleware$layer/SOA$as$an$ Exhibit
9:
Middleware/SOA
Layer
enabler$for$its$omni?channel$vision:$
Implemented#and#working#well# Implemented#but#needs#improvement#
Middleware#layer/#SOA# 6%#
20%#
17%#
17%#
40%#
While
half
the
retailers
have
the
ability
to
process
cross-channel
returns,
26%
need
to
improve
the
current
process,
which
as
we
mentioned
earlier
is
a
prime
area
to
drive
customers
away
if
you
cannot
process
the
return
as
they
expect.
There
are
also
a
number
of
retailers
who
cannot
presently
process
cross-channel
returns
at
all,
plus
17%
who
do
not
have
plans
to
offer
this
ability.
This
should
be
an
area
of
concern
for
retailers.
Many
of
your
competitors
can
do
this
so
your
customer
expects
it
and
will
be
dissatisfied
if
you
cannot
fulfill
their
expectations.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Another 21% of the retailers surveyed have no plans to allow customers to place online orders in the store by choosing not to allow customers to do this they are potentially sending customers to another retailer.
24.$$What$is$the$implementa0on$status$of$the$following$omni6channel$services?$
Usability$of$stored$value$cards/giS$cards$across$ channels$ Processing$of$cross>channel$returns$ Placing$online$orders$in$the$store$ Lookup$or$reserve$inventory$in$another$store$ Provide$shipping$opMons$for$special$orders$(home$vs.$ store$pickup)$ Order$on$web/$fulll$from$store$ Lookup$of$online$orders$in>store$ Purchase$in$store/$fulll$from$DC,$other$store,$or$ vendor$ In>store$pick$up$of$online/mobile$orders$ Allow$special$orders$to$be$placed$in$all$channels$ 0%$ 43%$ 34%$ 26%$ 24%$ 24%$ 22%$ 18%$ 15%$ 15%$ 12%$ 9%$ 30%$ 18%$ 26%$ 20%$ 40%$ 18%$ 18%$ 13%$ 26%$ 29%$ 18%$ 15%$ 38%$ 41%$ 18%$ 39%$ 26%$ 60%$ 6%$ 9%$ 9%$ 12%$ 9%$ 9%$ 23%$ 17%$ 12%$ 23%$ 6%$ 3%$ 9%$ 17%$ 21%$ 32%$ 35%$ 16%$ 13%$ 24%$ 27%$ 15%$ 29%$ 80%$ 100%$ 12%$ Implemented$and$ working$well$ Implemented$but$ needs$improvement$ Plan$to$implement$in$<$ 2$years$ Plan$to$implement$in$>$ 2$years$ No$plans$to$implement$
Omni-channel customers continue to increase in number and these customers are critical to a retailers success. It has already been proven that Omni-channel shoppers spend more than multi-channel shoppers and, this is critical to a retailers long-term success, they show stronger brand loyalty. Omni- channel retailing is not a fad and will not likely go away, in fact it will become more prevalent, and retailers who do not embrace it will likely lose in the long run.
STORE
Earlier
we
addressed
what
retailers
indicate
is
most
important
to
their
organization
and
an
overwhelming
majority
indicated
that
customer
service
and
efficient
processing
at
the
register
are
of
vital
importance.
One
area
where
retailers
can
make
a
difference
is
to
provide
associates
with
customer
information,
including
shopping
history
and
purchasing
suggestions,
to
enhance
the
shopping
experience.
29.$$Which$of$the$following$methods$are$u7lized$to$iden7fy$ Exhibit
11:
Identifying
Customers
at
POS
customers$at$the$POS?$
Email&address& Telephone&number& Customer/&idenAcaAon&number& Name&and&address& Member/club&number& Private&label&credit&card& Driver's&license& Mobile&device&J&optJin&to&Wi& Do¬&idenAfy&customers&at&POS&
0.0%& 21.8%& 9.3%& 15.6%& 31.2%& 37.5%& 43.7%& 56.2%& 62.5%&
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Trends
We have seen over the last few years how top retailers excel at gathering customer data and analyzing it to understand and react to their customers shopping habits so they can continue to improve customer service and outperform the competition. The good news is that retailers as a whole are becoming better at gathering customer data. While one-third of the respondents were unable to identify customers at the POS last year, this year the number is down slightly to 22%. (Exhibit 11) Interestingly, the method of identifying customers at the POS has shifted. Email addresses have become the de facto identifier (and also enable further marketing benefits) over telephone numbers, but there is still a reluctance to utilize a customers mobile device as the method of identification. Since there has been an increase in consumer utilization of location-based social networking services such as Foursquare and Facebook Places, it is surprising that more retailers are not incorporating some of the same efforts into targeting their Exhibit 12: Customer Information Available customers as they 30.$$What$customer$informa3on$is$available$at$store7level?$ enter the store, or even when they check Contact&informa8on&(e.g.&name,&address,&telephone&number,&email& 68.7%& address)& in within the stores Transac8on&lookup&for&returns& 40.6%& vicinity. There is Sales&history& 37.5%& opportunity, as cPOS Purchase&summary&(e.g.&average&transac8on&amount,&purchases&this& 21.8%& adoption becomes year,&life8me&totals,&etc.)& more prevalent, to CustomerKspecic&oers&and&discounts& 12.5%& have customers opt-in CustomerKspecic&messaging& 9.3%& from their mobile Warranty&and&service&lookup& 9.3%& device, but retailers Friends&and&family&informa8on&(e.g.&birthdays,&anniversaries,&sizes,& 6.2%& need to engage and wardrobe)& Prole&(e.g.&demographics,&preferences,&sizes,&etc.)& 3.1%& give customers a Purchasing&sugges8ons&(based&on&customer''s¤t&or&previous& meaningful reason to 0.0%& purchases)& opt-in and interact in No&customer&informa8on&is&available&at&store&level& 28.1%& the retail store. Retailers are doing a better job of providing customer information at the store-level. While last year half the retailers provided contact information, this year the number has increased to more than two-thirds of the respondents. (Exhibit 12)
Opportunities
While
we
have
seen
improvement
in
the
information
provided
at
the
store-level
to
the
associates,
there
are
still
many
missed
opportunities.
There
is
an
amazing
opportunity
for
savvy
retailers
to
establish
customer
intimacy
by
utilizing
this
information.
The
ability
for
an
associate
to
drive
a
sale
by
understanding
the
customers
purchasing
history
or
being
able
to
offer
customer-specific
offers
and
discounts
is
currently
very
limited.
An
associate
who
has
this
information
can
greatly
enhance
the
customer
shopping
experience
by
offering
items
that
match
previously
purchased
merchandise
or
even
show
them
something
similar
to
items
they
have
purchased
in
the
past.
We
believe
interactive
wardrobe
applications
are
an
opportunity
and
we
are
working
with
a
firm
that
offers
a
cloud-based
wardrobe
application
populated
by
both
the
retailer
and
the
consumer.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Not
only
what
customer
information
is
available
at
the
store
but
when
the
customer
information
is
available
is
important.
(Exhibit
13)
Nearly
30%
of
the
respondents
can
access
transaction
data
and
almost
20%
have
access
to
customer
contact
information
before
the
transaction
actually
occurs.
Allowing
the
associate
to
access
this
information
pre-transaction
Exhibit
13:
Customer
Information
Available
31.$$What$is$the$earliest$point$at$which$customer$informa6on$is$available$at$ offers
further
options
to
the
store9level?$ retailer
to
tailor
the
sale
before
the
customer
purchases,
but
TransacBon#lookup# 29%# 6%# 16%# 48%# there
is
opportunity
for
further
Contact#informaBon# 19%# 39%# 3%# 39%# Pre5transacBon# tailoring
by
offering
suggestions
(assisted#selling)# to
customers
before
they
ever
19%# 23%# 13%# 45%# Purchase#summary# In5transacBon# reach
the
checkout.
(during#checkout)# Customer#prole# 17%# 20%# 7%# 57%#
Post5transacBon# SuggesBons# 14%# 3%# 83%# There
are
myriad
opportunities
to
enhance
the
customer
Customer5specic#messaging# 7%# 11%# 82%# Not#available# shopping
experience
by
Friends#and#family#informaBon# 7%# 7%# 86%# understanding
the
customers
closet,
their
needs,
their
Customer5specic#oers#and#discounts# 7%# 10%# 3%# 80%# lifestyle,
etc.
This
area
will
0%# 20%# 40%# 60%# 80%# 100%# continue
to
grow
with
apps
currently
being
created
and
tested
to
help
fill
in
the
gaps
that
retailers
are
leaving
open
by
not
providing
associates
the
tools
they
need
to
develop
customer
intimacy
in
the
store.
Instead,
retailers
should
be
embracing
the
idea
and
creating
or
implementing
their
own
tools
to
offer
to
associates.
32.$$What$is$the$implementa0on$status$of$the$following$CRM/loyalty$program$features$ Exhibit
14:
CRM/Loyalty
Program
Features
at
POS
at$the$POS?$
Customer#lookup# Full#transac:on#history#lookup# Oer#a#loyalty#program# Current#oer/discounts#lookup# View#period#and#life?to?date#customer#summary# Look#up#all#loyalty#ac:vity# Customer?specic#messaging# Look#up#available#redemp:ons# 30%# 27%# 22%# 19%# 17%# 13%# 19%# 13%# 10%# 13%# 28%# 26%# 30%# 30%# 34%# 43%# 40%# 60%# 30%# 27%# 31%# 6%# 20%# 23%# 24%# 13%# 80%# 23%# 20%# 9%# 29%# 20%# 23%# 24%# 20%# 100%# No#plans#to# implement# 10%# 7%# 13%# 9%# Implemented#and# working#well# Implemented#but# needs#improvement# Plan#to#implement#in# <2#years# Plan#to#implement#in# >2#years#
We
are
seeing
a
disconnect
for
many
retailers
as
they
indicate
that
customer
service
is
a
priority
but
they
do
not
have
plans
to
implement
CRM/loyalty
features
at
the
POS
to
really
serve
their
customers.
Lifetime
customer
value
(LTV)
is
important
in
retail,
yet
there
are
retailers
with
no
plans
to
implement
the
ability
to
view
period
and
LTV
customer
summary
information.
(Exhibit
14)
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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We still see opportunities for retailers to tailor the Amazon model to their organization. Amazon has pioneered the model of utilizing customer information to not only improve the customers shopping experience by directing them to the products they are most likely interested in, but also to offer suggestions for items that fit with items previously purchased. While Amazon has pioneered this online, there are opportunities for brick-and-mortar retailers to track what their customers have previously purchased and then offer suggestions based on purchases and current inventory. As the point-of-sale shifts to the customers device this becomes even more critical and retailers who do this right will maximize up-sell and cross-sell opportunities.
34.$$What$is$the$implementa0on$status$of$the$following$customer$services$at$store9level?$
Self#checkout# Self1service#price#check# Store#portal# 2D#barcode#scanning# Electronic#coupons# Self1service#loyalty#program#status# Wi1Fi#customer#use# 16%# 16%# 13%# 13%# 10%# 7%# 3%# 6%# 13%# 24%# 10%# 20%# 16%# 30%# 16%# 3%# 30%# 40%# 50%# 7%# 19%# 69%# 60%# 70%# 80%# 90%# 100%# 3%# 3%# 3%# 6%# 20%# 23%# 25%# 10%# 6%# 10%# 26%# 45%# 13%# 13%# 53%# 45%# 74%# 47%# 47%# 26%# 16%# Implemented#and# working#well# Implemented#but#needs# improvement# Plan#to#implement#in#<2# years# Plan#to#implement######in# >2#years# No#plans#to#implement#
Stores continue to change in ways we would not have imagined twenty years ago. More than 15% of the respondents offer self-checkout and self-service price check to their customers (Exhibit 15). This is interesting because there are a number of areas in which retailers can reduce expenses and resources by putting services into their customers hands. By allowing customers to take on these services, retailers actually increase the customer service offered to customers, which can enhance customer loyalty. Many customers like to be able to DIY because they feel more in-control and leading retailers are catering to this trend. There are many opportunities available for retailers to put more information and control in the customers hand, and in many cases, this refers to the customers own smartphone.
POINT-OF-SALE
The
point-of-sale
continues
to
change
and
evolve.
In
the
past,
when
we
discussed
the
point-of-sale
(POS)
we
referred
to
a
cash
register
stationed
at
a
wrap
desk,
generally
in
the
front
of
the
store.
Now
the
POS
refers
to
any
touchpoint
where
the
customer
makes
a
purchase,
including
mobile
devices
and
even
a
customers
own
smartphone
as
the
point
at
which
the
sale
takes
place.
In
fact,
the
customer
has
really
become
the
point-of-sale
cPOS
-
wherever
she
wants
to
purchase
is
where
she
needs
to
be
able
to
purchase.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Trends
As we asked retailers Exhibit 16: POS H ardware Devices 12.$What$type$of$hardware$does$your$organiza7on$currently$u7lize$as$a$point:of:sale?$ what type of hardware their 0%# 10%# 20%# 30%# 40%# 50%# 60%# 70%# 80%# 90%# 100%# organization uses as Customer5owned#mobile#devices#(iPhone,#Android,#iPad)# a point-of-sale we 0%# discovered that Tablets# <#10%# traditional registers still play a big role, 10525%# Mobile#devices# but they are not the 25550%# only players Notebook/laptop#computers# 50575%# anymore. (Exhibit 16) 755100%# A few years ago, this PCs/desktop#computers# question would have been irrelevant, as TradiKonal#registers# the majority of retailers would have indicated that they utilized traditional registers with only a few innovative retailers utilizing PCs. Today, we can see how technology has advanced with most retailers using some mix of technology, and a few retailers utilizing tablets and mobile devices as a portion of their organizations point-of-sale devices. While traditional registers certainly still play a role, it will continue to diminish as other technology gains traction. The momentum has already shifted and mobile devices are poised to pervade the retail industry within the next few years we expect that by the end of next year the shift in point-of-sale hardware will be significant.
21.$$What$are$your$company's$overall$point7of7sale$spending$plans$for$2013?$
Mobile$POS$ Customer@facing$mobile$soluGons$ POS$hardware$ POS$so2ware$modicaGons$ POS$so2ware$ Mobile$inventory$soluGon$ Store$network$ Customer@owned$mobile$device$as$POS$ POS$hardware$maintenance$ POS$so2ware$maintenance$ 0%$ 43%$ 43%$ 35%$ 32%$ 24%$ 19%$ 14%$ 20%$ 22%$ 20%$ 40%$ 60%$ 6%$ 44%$ 56%$ 57%$ 80%$ 46%$ 60%$ 57%$ 11%$ 17%$ 9%$ 41%$ 62%$ 32%$ 3%$ 9%$ 100%$ 20%$ 43%$ 34%$ 46%$ 24%$ 6%$ 3%$ 31%$ 23%$ Increase$spending$ Decrease$spending$ No$change$ Unsure$ 9%$
It
is
interesting
to
see
that
more
than
10%
of
the
retailers
surveyed
allow
customers
to
use
their
own
devices
to
check
themselves
out
of
the
store.
This
number
will
continue
to
increase
over
the
next
few
years
as
retailers
take
advantage
of
what
is
often
called
BYOD
or
BYOT
(Bring
Your
Own
Device
or
Bring
Your
Own
Technology)
and
which
we
call
cPOS
(Customer
Point-of-Sale).
This
offers
advantages
to
retailers
by
alleviating
some
equipment
expenditures
since
the
customer
is
now
responsible
for
purchasing
their
own
checkout
device.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Opportunities
Overall,
retailers
are
looking
at
mPOS
and
customer-facing
mobile
solutions
as
a
focus
for
2013
more
than
half
of
the
respondents
have
plans
to
increase
their
spending
in
these
two
areas.
(Exhibit
17)
It
is
also
interesting
to
note
that
a
few
retailers
are
decreasing
their
spending
this
year
on
POS
hardware,
software,
software
maintenance
and
modifications,
and
hardware
maintenance.
This
is
likely
because
retailers
are
shifting
the
point-of-sale
to
mobile
devices,
both
retailer-owned
and
customer-owned.
Retailers
who
are
not
shifting
their
focus
will
miss
out
on
opportunities
as
customers
embrace
being
able
to
do
more
through
their
mobile
devices.
As
we
look
at
the
specifics
of
point-of-sale
technology
in
the
next
two
years
we
see
that
retailers
are
have
plans
to
increase
their
reliance
on
15.$What$type$of$hardware$does$your$organiza7on$plan$to$u7lize$as$a$point9of9sale$by$the$ Exhibit
18:
2014
POS
Hardware
Plans
end$of$2014?$ customer-owned
mobile
Notebook/laptop$computers$ 61%$ 22%$ 11%$ 6%$ devices
with
more
than
0%$ half
of
the
retailers
Customer;owned$mobile$devices$(iPhone,$Android,$iPad)$ 45%$ 35%$ 10%$ 10%$ <$10%$ surveyed
indicating
that
PCs/desktop$computers$ 38%$ 5%$ 10%$ 14%$ 14%$ 19%$ 10;25%$ these
devices
may
25;50%$ Tablets$ 22%$ 26%$ 30%$ 13%$ 9%$ account
for
up
to
50%
of
50;75%$ the
point-of-sale
In;store$mobile$devices$ 20%$ 24%$ 32%$ 16%$ 4%$ 4%$ 75;100%$ technology
devices
used
Tradi2onal$registers$ 18%$ 3%$3%$ 27%$ 48%$ by
the
end
of
2014.
0%$ 20%$ 40%$ 60%$ 80%$ 100%$ (Exhibit
18)
Another
opportunity
we
see
for
many
retailers
is
the
centralization
of
POS
through
centralized
processing
at
the
Home
Office.
The
store-level
environment
can
become
less
complex
by
consolidating
or
virtualizing
servers,
the
operating
system,
and
applications
at
the
data
center
or
Home
Office
instead
of
at
each
individual
store.
By
centralizing
these
items
there
are
fewer
devices
and
licenses
to
deploy
and
maintain
across
the
store
chain,
plus
any
application
updates
can
be
deployed
centrally,
thus
more
quickly
and
easily.
This
offers
the
retailers
a
more
agile
environment
and
a
richer
shopping
experience
for
the
customer.
Plus,
it
enables
real-time
integration
across
all
channels
and
touchpoints
to
offer
customers
the
Omni-channel
environment
they
want.
De2centralized$(Store$ controller)$
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Retailers are already experimenting with centralization. (Exhibit 19) When we asked retailers what processes they have centralized through the Home Office, many of the respondents indicated they already operate business intelligence, inventory, pricing, loss prevention, and CRM there. Nearly one- third of the retailers have also centralized their point-of-sale application and realize benefits such as providing fast access to web-and mobile-based solutions for customer self-service capabilities and cross- selling and up-selling capabilities. But there are still opportunities for centralization of point-of-sale processes. Networks are more reliable and more resilient than ever before and this offers retailers the opportunity for a completely different store environment one that is agile and even more customer-oriented.
INFRASTRUCTURE
For
the
past
three
years
we
have
asked
retailers
about
their
organizations
information
technology
adoption.
(Exhibit
20)
Last
year
we
noticed
an
uptick
in
retailers
indicating
that
their
organizations
were
early
adopters
this
year
it
seems
that
more
organizations
settled
back
into
being
mainstream
adopters.
It
is
likely
that
last
years
blip
was
a
reflection
of
the
pent-up
technology
demand
after
the
recession
and
a
move
to
mobile
technology.
The
infrastructure
within
the
organization
is
critical.
Retailers
realize
the
necessity
of
a
sound
infrastructure
and
are
investing
the
creation
of
a
strong
foundation.
Early(adopter()(quickly(adopts(once(new(technology(has( stabilized((follows(the(market(leader)(
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Hardware
Satisfying
the
customer
is
an
ongoing
challenge
as
customers
become
more
demanding
they
want
instant
gratification
and
if
a
retailer
cant
get
them
what
they
want,
they
are
more
than
willing
to
take
their
business
elsewhere.
The
hardware
utilized
as
this
foundation
can
easily
11.##What#vendor#hardware#does#your#company#
Exhibit
21:
Traditional
POS
Hardware
make
or
break
customer
transactions.
currently#use#for#its#tradi8onal#point9of9sale?#
39%# Toshiba/IBM# When
discussing
the
traditional
POS
17%# Dell# hardware
market,
it
continues
to
look
14%# Other# similar
year
after
year
with
IBM
14%# HP# remaining
the
dominant
player
and
the
rest
of
the
category
relatively
segmented.
11%# NCR# (Exhibit
21)
11%# Fujitsu#
6%# Wincor#Nixdorf# While
the
IBM-established
base
is
still
3%# Epson# dominant,
there
was
a
shake-up
in
the
3%# DigiPOS# industry
earlier
this
year
when
IBM
sold
its
Retail
Store
Solutions
(RSS)
business,
including
hardware,
software,
and
in-store
solutions,
to
Toshiba
TEC.
This
is
a
very
big
change
as
the
question
becomes,
why
did
IBM
leave
the
POS
hardware
and
software
businesses?
So
although
we
now
identify
it
differently,
the
established
base
by
IBM
(now
Toshiba)
is
still
the
most
dominant
in
the
industry.
We
also
asked
retailers
what
16.$What$opera-ng$system$does$your$organiza-on$ operating
system
is
most
prevalent
on
Exhibit
22:
POS
O perating
System
their
POS
hardware
and
currently$use$on$your$POS$hardware?$ unsurprisingly;
Microsoft
maintains
the
lions
share
with
nearly
75%
of
the
retailers
utilizing
some
type
of
Microsoft
product.
(Exhibit
22)
This
Windows'XP' 33%' will
be
interesting
to
watch
as
traditional
POS
hardware
declines
and
Windows'Embedded' 19%' more
tablets
and
smartphones
take
Android' their
place.
POSReady'7' 2%'
13%' MS,DOS' This
year
saw
another
decline
in
the
2%' usage
of
Linux
with
only
4%
of
the
Apple'iOS' respondents
indicating
they
use
Linux
4%' Linux' as
their
POS
hardware
operating
POSReady'2009' 4%' 8%' system.
Generally
we
would
assume
IBM'4690' Other' 9%' 6%' this
number
would
be
higher,
but
the
adoption
rate
may
be
low
due
to
some
difficulties
in
interoperability
with
other
point
solutions,
a
lack
of
vendor
experience
with
Linux,
the
cost
and
availability
of
expert
Linux
resources,
and
issues
in
interfacing
Linux
with
Microsoft
Office.
With
Microsofts
additional
willingness
to
offer
deals,
it
seems
that
retailers
are
continuing
with
a
more
mainstream
platform.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Software
As
noted
earlier,
retailers
are
focused
on
enhancing
the
checkout
experience
and
10.$$What$vendor$so0ware$does$your$company$
Exhibit 23: Traditional POS Software currently$use$for$tradi:onal$point;of;sale?$ making
it
more
efficient
for
both
the
associate
and
the
customer.
Choosing
and
utilizing
the
Epicor%(CRS,%NSB)% 18.0%% right
software
to
offer
associates
the
tools
they
SAP%(Triversity)% 18.0%% MICROS%Retail%(Datavantage,% need
plus
offer
customers
the
ease
and
15.0%% Torex)% Toshiba%(IBM)% 12.5%% efficiency
that
they
desire,
is
a
never-ending
Retalix%(CornellPMayo)% 10.0%% challenge
for
retailers.
Even
after
an
in-depth
Fujitsu% 7.5%% selection
process
and
a
potentially
lengthy
Other% 5.3%% implementation
process,
retailers
tend
to
Jesta%I.S.% 4.5%% Proprietary/Homegrown% 3.3%% second-guess
themselves
as
to
whether
they
JDA%(Red%Prairie)% 2.8%% have
chosen
the
best
option
for
their
PCMS% 2.4%% organization.
Luckily,
in
the
past
few
years
we
Microso2% 2.0%% have
seen
an
increase
in
hardware
and
software
options
by
vendors
that
has
offered
retailers
more
opportunities
to
purchase
software
instead
of
building
their
own
software.
For
the
first
time,
Proprietary/homegrown
software
is
not
one
of
the
largest
groups
when
we
asked
retailers
what
software
they
use
for
their
traditional
point-of-sale.
(Exhibit
23)
The
tendency
for
retailers
to
build
their
own
software
has
trended
down
for
the
last
few
years.
The
software
market
still
remains
relatively
segmented
with
no
one
vendor
leading
the
category
SAP,
Epicor,
MICROSRetail,
and
Toshiba
have
the
most
implementations
with
Retalix,
Fujitsu,
and
others
close
behind.
For
Retalix,
the
acquisition
of
Cornell-Mayo
fills
a
hole
in
their
portfolio
and
opens
up
the
specialty
retail
marketplace.
Network
As
we
mentioned
in
the
13th
Annual
POS
19.$Please$indicate$what$services$your$company$ Benchmarking
Survey,
the
improvements
that
have
Exhibit
24:
Store
Network
Services
currently$uses$your$store$network$for:$ been
seen
in
networks
over
the
last
few
years
48.1%% VoIP% completely
change
how
retailers
should
be
thinking
48.1%% POTS% about
networks.
The
recent
investments
made
have
44.4%% Wireless%back@up% created
a
robust
network
infrastructure
that
is
faster
37.0%% Call%center% and
more
reliable
than
what
previously
existed.
33.3%% Fax%machine%
19.0%% Wi@Fi%customer%use% We
asked
retailers
what
services
they
are
generally
7.4%% PBX%in%the%cloud% using
their
store
network
for
and
nearly
half
of
the
3.7%% Trac%heatmaps% respondents
indicated
VoIP
or
POTS.
(Exhibit
24)
This
indicates
that
a
tremendous
number
of
retailers
are
still
using
POTS
lines
when
they
could
see
incredible
cost
savings
by
upgrading
their
networks
to
accommodate
VoIP.
A
key
benefit
to
improved
network
architecture
is
the
ability
to
utilize
VoIP
(Voice
over
Internet
Protocol)
as
an
option
instead
of
POTS
telephone
lines
to
every
store
location.
There
are
also
opportunities
for
retailers
to
recognize
major
cost
savings
by
bundling
store
services
such
as
Data,
Voice,
Wi-Fi,
Video,
Fax
and
PBX
into
one
integrated
package.
It
is
surprising
the
number
of
fax
machines
still
in
use;
there
is
the
opportunity
for
cost
savings
by
utilizing
scanning
and
document
management
instead.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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While 7.4% of the respondents are utilizing PBX in the cloud, this indicates that another 92.6% are utilizing a PBX or similar phone system in the store. Again there are opportunities for retailers to reduce expenses by centralizing communication through the cloud.
Trends
There
has
been
resurgence
in
the
last
few
years
of
POS
infrastructure
upgrades
and
replacements
due
to
escalating
maintenance
costs,
end
of
lifecycle
management,
and
newer
technologies
entering
the
field.
This
year
is
no
exception.
(Exhibit
25)
17.$$Please$indicate$the$current$average$age$of$your:$
Store$network$ POS$soBware$ POS$terminals$ Mobile$devices$7$POS$ Mobile$devices$7$back7oce$ 0%$ 23%$ 19%$ 16%$ 15%$ 10%$ 6%$ 3%$ 15%$ 20%$ 9%$ 30%$ 6%$ 40%$ 50%$ 60%$ 34%$ 17%$ 42%$ 75%$ 56%$ 70%$ 80%$ 90%$ 100%$ 34%$ 37%$ 31%$ 29%$ 14%$ 3%$ <$2$years$ 9%$ 6%$ 3%$ 2$to$4$years$ 5$to$8$years$ 9$to$11$years$ >$12$years$ N/A$
The most dramatic change is in store networks with 34% of this years respondents operating networks that are less than two years old, while last year it was only 18% of respondents. On the software side, last year more than half the retailers were utilizing software that was installed more than eight years ago while this year it is closer to 25% with one-quarter of the retailers surveyed utilizing software that was implemented less than 2 years ago. On the hardware side, it is not quite as dramatic, but the age of terminals is down slightly from only 13% running terminals that were less than two years old last year, to 19% this year.
Opportunities
Based
on
the
trend
we
saw
above
of
retailers
replacing
and
upgrading
hardware,
software,
and
store
networks,
there
are
fewer
immediate
opportunities
for
replacement
in
these
areas.
(Exhibit
26)
Many
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of the retailers we surveyed have plans to utilize their current set-up for at least another year or two. Of course, because this is a long-term investment and due to the number of stores that a retailer may have, it means that a number of retailers will spend 2013 researching their options, reviewing their competitions infrastructure, understanding their own current and future requirements, and then selecting the best option. This leaves 2014 for the implementation of the new technology.
PAYMENT
TECHNOLOGY
It
was
not
long
ago
that
many
consumers
didnt
feel
comfortable
transmitting
their
credit
card
information
over
the
Internet.
Now
most
consumers
embrace
it,
as
evidenced
by
the
popularity
of
Cyber
Monday.
The
next
step,
which
gained
acceptance
in
2012,
is
to
utilize
a
smartphone
as
a
payment
device.
Most
of
us
have
probably
had
an
introduction
to
this
concept,
whether
you
purchased
a
lobster
roll
at
the
food
truck
at
the
beach,
or
you
nabbed
a
handmade
necklace
at
the
local
art
show,
you
probably
saw
or
utilized
Square
recently.
This
is
just
going
to
continue
to
expand.
Our
smartphones
have
become
an
extension
of
ourselves,
we
feel
lost
without
them,
so
why
not
let
them
replace
the
contents
of
our
wallets?
One
of
the
technologies
that
enables
a
smartphone
to
be
used
as
a
purchasing
device
is
near
field
communication.
Near
field
communication
(NFC)
is
a
set
of
standards
for
smartphones
to
establish
radio
communication
with
each
other
by
bringing
them
into
close
proximity,
generally
just
a
few
centimeters
apart.
The
current
and
potential
applications
include
contactless
payments,
coupons,
price
check,
data
exchange,
and
mobile
speed
pass.
Some
of
the
new
Google
Android
phones
currently
have
an
NFC
chip
that
powers
a
digital-wallet
service.
This
gives
customers
the
ability
to
pay
for
goods
at
certain
retailers
simply
by
tapping
their
phones.
The
latest
iPhone
still
lacks
NFC
but
has
taken
steps
towards
offering
customers
this
ability
with
its
digital- coupon
and
loyalty-card
app
called
Passbook.
End1to1end$encrypCon$for$payment$processing$
23%$
46%$
14%$
17%$
Near$eld$communicaCon$
21%$
18%$
15%$
47%$
Chip1and1pin$(EMV)$ 0%$
14%$ 20%$
23%$ 80%$
20%$ 100%$
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Trends
Chip-and-pin technology (EMV) is a global standard for safety and security for credit card transactions that has been implemented around the world including Europe, and more recently, in Canada. This technology provides enhanced protection against fraud if a card is lost or stolen. Chip-and-pin technology is a worldwide initiative but there are still some U.S. retailers who do not have plans to implement the technology. (Exhibit 27) This technology will continue to expand internationally and within the U.S., driven somewhat by PCI requirements. Those retailers who do not have plans to implement chip-and-pin technology will find themselves falling behind.
Opportunities
End-to-end
encryption
will
be
coming
on
strong
in
the
near
future
with
chip-and-pin
technology
taking
a
bit
longer,
although
it
is
getting
increasingly
difficult
to
use
US-issued
credit
cards
in
Europe
as
they
no
longer
support
that
technology.
This,
in
conjunction
with
the
push
because
of
PCI,
may
drive
chip-and- pin
technology
adoption
more
quickly
than
some
retailers
planned.
MARKETING
Non-traditional
marketing
continues
to
change
and
evolve
as
retailers
explore
social
networking
as
a
cost-effective
and
successful
marketing
tool.
Social
networking
sites
provide
messaging
to
customers
about
new
products,
information
about
in-store
events,
and
personalized
customer
offers.
But
the
challenge
remains
for
retailers
to
do
more
with
social
networking
than
just
get
customers
to
like
the
companys
Facebook
page.
Trends
This
year
nearly
75%
of
the
retailers
host
their
own
social
networking
sites,
up
slightly
from
last
year.
(Exhibit
28)
The
big
difference
from
the
last
few
years
is
that
fewer
retailers
are
monitoring
external
sites
such
as
Facebook,
Google+,
and
Pinterest
(56%
TY
versus
67%
LY).
This
points
to
more
retailers
controlling
their
destiny
by
creating
and
managing
their
own
social
networking
sites.
This
offers
retailers
the
ability
to
react
more
quickly
to
any
issues
that
may
occur
and
more
readily
reward
loyal
customers.
35.$$What$is$the$implementa0on$status$of$the$following$"non7tradi0onal'$marke0ng$methods?$
Hosted#social#networking#sites#(e.g.#Facebook,#Google+,# Pinterest,#TwiUer)# YouTube#videos# Hosted#blogs# Monitoring#external#social#networking#sites# SMS#(text)# 2D#barcode#scanning#by#customer#smartphones# Loca<on=based#social#networking#(e.g.#Foursquare,#Gowalla)# 23%# 19%# 13%# 10%# 10%# 10%# 30%# 20%# 19%# 40%# 10%# 20%# 30%# 40%# 19%# 42%# 17%# 19%# 43%# 23%# 33%# 13%# 13%# 50%# 10%# 60%# 70%# 10%# 10%# 32%# 17%# 10%# 20%# 13%# 17%# 39%# 33%# 80%# 90%# 100%# 3%# 6%# 33%# 42%# 7%# 17%# 23%# 20%# 16%# Implemented#and# working#well# Implemented#but#needs# improvement# Plan#to#implement#in#<#2# years# Plan#to#implement#in#>#2# years# No#plans#to#implement#
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Social networking will continue to influence customers shopping experiences and it is imperative that top retailers use that to their advantage in this competitive environment.
Opportunities
Social
networking
offers
the
ability
for
interaction
with
customers
and
can
give
the
Executive
Team
valuable
feedback.
It
also
offers
customers
a
voice
that
they
have
not
previously
had
a
bad
experience
with
a
brand
can
translate
into
a
viral
video
that
thousands
or
even
millions
of
customers
can
see
which
can
be
disastrous
for
a
retailer.
But
it
can
also
offer
a
venue
where
customers
can
demonstrate
their
loyalty
the
challenge
for
retailers
is
to
ensure
there
are
more
positives
and
that
any
negatives
are
addressed
quickly
and
viewed
as
an
opportunity
to
gain
customer
loyalty.
The
opportunities
for
retailers
lie
within
the
relationship-building
arena.
Social
networking
gives
retailers
the
ability
for
a
one-on-one
connection
with
their
customers.
Utilizing
social
networking
to
develop
a
relationship
with
customers
is
the
future
of
social
networking
for
retailers.
ECONOMIC
OUTLOOK
The
economy
in
2012
continued
its
slow
recovery.
Retailers
are
optimistic
about
7./8.%Company's%Outlook%on%Economy%and%Business%Prospects% Exhibit
29:
Economic
Outlook
economic
recovery
and
even
more
2%# optimistic
about
their
organizations
Very#Posi1ve# 8%# future.
(Exhibit
29)
Last
year
only
15%
of
Economic#Outlook# 32%# Posi1ve# the
retailers
indicated
that
they
felt
56%# positive
about
the
economy.
This
year,
56%# Outlook#on# Neutral# 25%# more
than
one-third
of
the
respondents
Organiza1on's# Business#Prospects# 10%# feel
positive
about
the
economy
clearly
Nega1ve# 5%# most
retailers
are
seeing
the
light
at
the
0%# end
of
the
tunnel.
Their
outlook
on
their
Very#Nega1ve# 0%# organizations
business
prospects
is
even
more
optimistic
with
nearly
two-thirds
of
the
retailers
having
a
positive/very
positive
outlook.
When
we
asked
retailers
what
steps
they
have
successfully
taken
in
the
last
few
years
to
overcome
difficult
business
conditions
we
found
that
the
top
two
areas
that
retailers
have
addressed
successfully
are
the
same
as
last
year
refurbish
stores
and
improve
customer
service.
(Exhibit
30)
Some
interesting
changes
from
last
year
involve
a
shift
from
last
years
success
in
reducing
inventory
and
reducing
store
payroll
while
this
years
success
rides
on
enhancing
assortments
and
increasing
promotions.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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24%#
11%# 14%# 8%# 5%# 29%# 21%# 22%# 27%# 10%# 13%#
CONCLUSION
As
we
stated
in
the
Introduction,
the
lines
have
blurred.
Channels
are
no
longer
distinct.
Customers
easily
move
among
channels
and
even
shop
via
more
than
one
channel
simultaneously.
The
line
between
customer
and
associate
has
also
blurred
with
customers
sometimes
having
access
to
more
information
about
a
product
than
the
associate,
or
the
associate
utilizing
customer-facing
tools
and
information
to
be
as
informed
and
knowledgeable
about
the
product
as
the
customer.
And
most
of
all,
the
lines
have
blurred
as
to
what
the
point-of-sale
is.
We
used
to
refer
to
the
point-of- sale
(POS)
as
the
register
with
the
checkout
line
feeding
into
it,
where
the
customer
made
their
purchase.
But
the
true
meaning
of
point-of-sale
refers
to
the
point
at
which
the
sale
is
made
and
can
include
a
register,
PC,
tablet,
or
smartphone
inside
or
outside
the
store
environment
where
the
customer
makes
their
purchase.
The
point-of-sale
is
now
in
the
customers
hands.
The
challenge
(or
opportunity)
for
retailers
is
to
take
these
game-changers
that
are
rapidly
occurring
in
the
industry
and
use
them
to
their
advantage.
The
customer
is
continually
changing
and
evolving
and
retailers
must
do
the
same
to
survive.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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SURVEY
METHODOLOGY
Boston
Retail
Partners
(BRP)
conducted
the
14th
Annual
POS
Benchmarking
Survey
in
October
through
December
of
2012
by
contacting
more
than
500
top
North
American
retailers
and
with
our
largest
response
base
ever,
gained
insight
into
their
planned
initiatives,
priorities,
and
future
trends.
This
paper
summarizes
the
results
and
key
findings
of
the
survey,
offers
insight
into
the
store-level
tactics
and
channel
strategies
of
top
retailers,
and
identifies
current
trends
in
the
industry
to
offer
retailers
opportunities
to
continue
to
evolve
and
prosper
in
the
future.
The
focus
of
this
survey
is
primarily
on
the
specialty
retail
segment.
(Exhibit
31)
Nearly
two- thirds
of
the
survey
respondents
fell
into
the
specialty
category
with
the
remainder
in
other
lines
of
trade
such
as
general
merchandise,
grocery,
and
convenience
and
fuel.
3.##What#was#your#company's#gross#annual#revenue# Exhibit
32:
Company's
Gross
Annual
Revenue
last#year?#
$10B%or%more% $5B%to%$10B% $1B%to%$5B% $500M%to%$1B% $100M%to%$500M% Less%than%$100M%
Other* 6.8%*
Of the retailers surveyed, the breakdown in size based on gross annual revenue included a broad selection of Tier 1, 2, and 3 retailers with nearly 60% above $1B and even 23% above $5B. (Exhibit 32) The specific respondents for each company were mainly Vice President/Director of IT or C-level executives.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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About
MICROS-Retail
MICROS-Retail,
a
division
of
MICROS
Systems,
Inc.
(NASDAQ:
MCRS),
is
a
leading
global
provider
of
technology
and
services
for
the
specialty
and
general
merchandise
retail
industry.
Software
solutions
include
point
of
sale,
eCommerce,
mobile
point
of
sale,
loyalty
and
CRM,
loss
prevention
and
analytics,
order
management,
inventory
management,
and
merchandise
and
supplier
management.
Services
include
creative
and
user
experience
design,
business
consulting,
hosting,
and
managed
services.
Hundreds
of
retailers
around
the
worldincluding
bebe,
Cabelas,
Charming
Shoppes,
Chicos,
Godiva
Chocolatier,
Gucci,
Guess,
IKEA,
The
Limited,
Payless
ShoeSource,
Polo
Ralph
Lauren,
Staples,
Starbucks
Coffee,
Vera
Bradley,
and
Whirlpoolrely
on
MICROS-Retail
to
strengthen
their
businesses
and
deliver
results
across
all
retail
touch
points:
store,
web,
direct
and
mobile.
Headquartered
in
the
Boston,
MA
area,
MICROS-Retail
has
offices
and
affiliates
across
the
globe.
To
learn
more,
please
visit
www.micros-retail.com.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.
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Retalix
is
a
leading
global
provider
of
innovative,
integrated
software
solutions
and
services
for
high
volume,
high
complexity
Fast
Moving
Consumer
Goods
retailers
and
distributors
including
supermarkets,
grocery
stores,
convenience
stores,
health
and
drug
stores,
and
department
stores.
The
companys
centrally-managed
offerings
and
services
help
optimize
retail
operations,
strengthen
brand
differentiation,
enhance
shopper
experience
and
build
consumer
loyalty,
while
providing
the
flexibility
and
scalability
to
support
ongoing
business
transformation
and
growth.
Retalixs
comprehensive
offering
comprises
a
broad
range
of
solutions
for
POS
(Point
of
Sale),
sales
channel,
store,
customer
and
marketing,
merchandising,
logistics
and
transportation
management,
with
integrated
support
for
both
mobile
and
e-commerce
channels.
In
addition,
the
company
provides
best- in-class
capabilities,
such
as
retail
operations,
customer
and
supplier
relationship
management,
ERP
and
business
intelligence,
distribution
operations
and
master
data
management
all
of
which
are
synchronized
across
multiple
business
formats.
Leveraging
a
multitude
of
implementation
options,
including
SaaS
(Software
as
a
Service)
delivery,
Retalix
serves
a
large
customer
base
of
approximately
70,000
stores
and
more
than
400,000
checkout
lanes
across
more
than
50
nations
worldwide
with
many
of
its
customers
ranking
among
the
top
retailers
in
their
respective
market
domains.
More
information
on
Retalixs
complete
suite
of
software
solutions
and
services
is
available
at
www.retalix.com.
2013 Boston Retail Partners. All rights reserved. No part of this document may be reproduced or distributed in any form or by any means without prior written permission of the publisher.