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Blockbuster buys mobile POS company to enhance in-store experience

The Blockbuster iPhone app

Video rental retailer Blockbuster is getting into the mobile payments game and has acquired mobile point-of-sale software company Alpha Bay.

Blockbuster will be using the Alpha Bay platform in its stores to improve in-store customer service, enhance inventory management and deliver promotional programs to its customers. At the same time, Alpha Bay will continue to market its software and services to other companies.

“Besides adding more mobility to the check-out experience, AlphaBay gives Blockbuster the opportunity to target relevant messages to customers in real-time, whether on a physical receipt, or in email,” said Ellen Kramer, vice president of marketing at Blockbuster, Dallas, TX. 

“Mobile POS is a must-have for the future of retail,” she said. “Besides the more positive and easy customer experience made possible by AlphaBay, the retailer can look to upsell and close sales they might have lost in a traditional sales queue.

“The Blockbuster deal enables AlphaBay to continue marketing their services to other forward-looking retailers. The Blockbuster example will help other retailers understand the benefits of a cloud-based, real-time mobile solution.”

Blockbuster is a subsidiary of Dish Network Corp. The retailer offers digital and disc rentals and sales by mail, via its Web site and in its stores.

Better service
Blockbuster will outfit its nearly 900 retail stores nationwide with the Alpha Bay platform, which includes cloud-based mobile POS, inventory management and customer loyalty-related software and services that operate in real-time.

The mobile functionality will allow Blockbuster’s in-store employees to move out from behind the counter for a more direct interaction with customers as they browse and try to decide upon a movie to rent.

Mobile POS can also help retailers such as Blockbuster eliminate long lines at the checkout.

Blockbuster will combine the mobile POS with individualized promotions to help drive sales.

“The software company they are acquiring will allow Blockbuster stores to enact business similar to the way sales are done in an Apple store environment,” said  Marci Troutman, CEO of SiteMinis, Atlanta.

“This will enable the staff to mingle with the customers as well as checking them out without leaving the sales floors,” she said.

“Customer service could be enhanced significantly, eliminating negative dwell time at lines for checkout and improving relationship building.”

The mobile POS strategy supplement Blockbuster’s other mobile initiatives, which include apps for iPhone and Android as well as a mobile-optimized site.

Opportunity knocks
Mobile POS gives retailers a way to eliminate the high cost of traditional cash registers while providing a way to accept payments wherever and whenever. Typically, retailers are using mobile POS efforts to improve the quality and speed of service while increasing customer loyalty.

These solutions are turning into a core strategy for retailers, according to a recent report from Motorola Solutions Inc.

Only 16 percent of retailers currently have a mobile POS solution while less than nine percent have completely mobile or portable checkout systems, the report states.

However, 66 percent of retail respondents are interested in mobile POS while 42 percent are currently piloting or starting trials within the next 36 months.

This shows there is an opportunity for Alpha Bay to bring its solution to retailers. However, there are number of competitors in this space, including Square, PayPal and Intuit.

Some of the other retailers experimenting with mobile POS include Bass Pro Shops, which recently began piloting the use of iPod touches in stores to reduce the amount of time customers spend waiting in line to make a purchase (see story).

Beauty products retailer Sephora is also active in this space and has implemented software from Agilysys and RedIron to turn iPod touches into mobile point-of-sale devices across a number of its stores (see story).

“Certainly this gives Alpha Bay an active environment to test and enhance  their software in the blockbuster environment, while this acquisition could hamper them from working with Blockbuster direct competitors, the live experience could showcase them to other chains that are interested in moving to a mobile POS scenario,” Ms. Troutman said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York