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Large retailers to ramp up mobile POS strategies in the second half

Mobile point-of-sale is not just for small merchants any longer. Increasingly, large retailers such as department stores are also embracing mobile to streamline in-store transactions and enhance customer relationships.

Of merchants with 500 or more employees, 61 percent have either already deployed mPOS technology or plan to do so some time in the next 12 months, according to a recent report from Yankee Group. The trend will be in evidence during the upcoming holiday season, with numerous department store associates equipped with mobile devices to complete transactions.

“A trend that I am really starting to see heat up is these high-end retailers that are leveraging mobile point-of-sale to really increase the in-store shopping experience,” said Jordan McKee, an analyst at Yankee Group, Boston. “A lot of high-end retailers have looked at Nordstrom as an example, and they have seen the success there and how Nordstrom has really embraced mobile and done an excellent job with it.

“Certainly, there are a lot of competitors out there that are looking to replicate that strategy,” he said.

“As we move into the holiday shopping season, we are going to see a lot more mobile point-of-sale, and I think it is really going to stick. I don’t think it is going to be just implemented for line busting. It is going to be the full package.”

Prime real estate
One of the benefits that large retailers see in mobile POS is the ability to increase the amount of real estate on the sales floor by eliminating cash wraps.

High-end and upscale retailers that replace just three cash wraps with mPOS can boost revenue by more than $20,000 per location as a result of increased real estate on the sales floor, according to the Yankee Group report titled “Revolutionizing Retail With mPoS.”

Outdoor sporting goods retailer Moosejaw is an example of a retailer that has made a big commitment to mobile POS and is seeing strong results, reporting that 70 percent of in-store transactions are taking place via mobile POS.

“They have been designing their new locations with a mobile centric strategy, so they are actually decreasing the amount of space on the sales floor that is taken up by physical cash registers,” Mr. McKee said.

“As a result of that, they are able to feature new products that they previously were unable to and a wider assortment,” he said. “They are actually realizing an increase in sales floor space as a result of getting rid of some of these cash wraps, and that certainly results in increased sales.

“I think we will see a lot of that in the future, stores being designed with a mobile-centric strategy.”

Empowering store associates
Initially, mobile point-of-sale was a tool geared toward the micro merchant and the small merchants that could not accept credit cards due to high costs.

Slowly, larger merchants began adopting mobile POS as a way to decrease long lines at the checkout during the holidays.

These days, larger retailers are looking beyond using mobile POS for line-busting and see it as a broader solution that encompasses inventory, training materials and product comparison tools.

“We are starting to see a lot of the associates in retail locations becoming empowered and providing the higher level of service as a result of becoming mobilized,” Mr. McKee said.

For the most part, mobile POS is still complementing traditional cash registers, with retailers able to expand the number of checkout locations.

Nordstrom is an example of a large retailer that has been replacing some traditional cash registers with mobile POS. JCPenney has also said it is very interested in replacing traditional cash registers with mobile POS.

Eliminating traditional POS
The advantages for large retailers of mobile POS include the ability to enhance customer service by enabling store associates to engage customers on the sale floor, significant cost savings as mobile POS is less expensive than traditional systems and the opportunity for increased sales because of enhanced relationships with customers.

There will most likely always be a need for at least one physical checkout location in these stores to serve those customers who are not comfortable checking out via mobile device or who have multiple items to purchase and want to be able to put them down on a counter to have them bagged.

Still, it is likely that the number of traditional cash registers will begin to shrink as mobile POS takes off.

“In the next couple of years, I think we will start to see a lot of these big retailers slim down the number of traditional checkouts, of course, still keeping a few, but starting to replace some of these traditional checkouts with a mobile alternative,” Mr. McKee said.

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