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Mobile POS deployments appear to be slowing: report

While retailers still recognize mobile’s potential to remake the in-store experience, many are also realizing that integrating mobile POS into their overall operations can be a big undertaking. The key operational issues involved with adopting mobile POS, including device and merchandise security, how to handle cash, payments, bags, customer service levels and reworking traffic flow.

“There has been a lot of hype around mobile completely eliminating POS mostly around some announcements from a few retailers, however, most retailers are taking an approach of utilizing mobile as an add-on to service and not a replacement,” said Greg Buzek, president of IHL Group, Franklin, TN.

“At the same time retailers are using mobile as a way to rethink their entire omni-channel transaction processing, looking to move to a single business logic regardless of the channel in which the customer chooses to buy,” he said.

“Finally, retailers are having to rethink their entire operations as they deploy mobile.  This includes security of the device, security of the merchandise, security of the transactions, payment handling, receipts, bags, and traffic flow.”

Transaction volume
Sales of mobile point-of-sale hardware and software in North America are expected to top $2 billion this year as 28 percent of retailers plan to leverage mobile for processing purchases in some form this year, according to the report.

The report reveals that the adoption rate for mobile POS is dependent on the type of retailer and volume of transactions.

One key finding from the report is that specialty retailers are deploying about 45 percent of all tablets shipped to retail for POS. Tablets are most popular in small independent retailers of all types and large mall-based specialty chains.

“Mobile POS is not for every segment,” Mr. Buzek said. “It is best for Specialty soft goods (apparel, shoes, luggage) retailers, department stores, and casinos/lodging locations.

“In these segments it is greatly transforming operations and retailers have seen increases in transaction size of up to 25 percent in certain circumstances as they shop together with the consumer rather than a barrier in between,” he said.

“We are ‘solving a problem together’ rather than a simple transaction.”

Other findings include that mobile POS is not a good option for high volume transaction environments such as grocery, warehouse clubs, supercenters, drug stores and convenience stores.

Additionally, retail mobile POS devices are expected to cannibalize 12.4 percent of traditional POS shipments by 2016. The highest areas of replacement will be in department stores and specialty soft goods retailers.

Finally, more than 85 percent of larger retailers suggest that for the next three years, mobile POS will serve as additional transaction points in their stores, rather than as replacements for traditional fixed POS stations.

“Most retailers who are deploying mobile POS still will queue their customers into fixed lines during peak periods, “ Mr. Buzek said.

“Mobile is only truly mobile until we get busy,” he said. “Even Apple abandons the free movement of people when they get busy and moving to fixed locations.”

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