Mobile POS use in department stores to nearly triple: report
Overall, shipments of new mobile POS devices are expected to grow more than 95 percent worldwide in 2014 and by more than 108 percent in North America. The growth is being driven by how both retailers and consumers are becoming more accustomed to payments on mobile devices.
“In certain segments Mobile POS is radically transforming the way retailers approach their customers,” said Greg Buzek, president of IHL Group, Franklin, TN. “This is especially true of apparel retailers and also smaller retailers.
“While Square, Intuit and other payment add-ons make sense for small retailers as a substitute for POS, they are not sophisticated enough for larger chains,” he said.
“Although Apple is the leader in the clubhouse right now, their future dominance is not a foregone conclusion because larger retailers are requiring their systems to work together. As such, Windows 8 based units have some strong inherent advantages at the enterprise and store level.”
Much of the initial growth in mobile POS was driven by smaller merchants who were quick to adopt smartphone attachments such as the Square dongle as a way to easily and inexpensively process credit card payments.
However, medium- and larger-sized retailers have also begun adopting mobile POS. This is being driven by how mobile POS can help these retailers shorten wait times for customers during busy periods and enhance the relationship with store associates, who can come out from behind a counter and interact with customers in the aisle while still being able to check them out.
According to IHL, the impact of mobile POS on traditional POS installations varies widely by retail segment, with greater adoption in segments that include apparel and less in those segments characterized by high-volume consumer goods.
Apple’s growth slows
While Apple had first-mover advantage in mobile POS, thanks in part to Square’s quick growth, the technology company will experience a lower growth this year while growth will pick up speed for Android and Windows 8.
As larger retailers begin to adopt mobile POS, this is benefitting Microsoft Windows 8 as these organizations predominantly already use Windows for their traditional POS systems.
There is also an opportunity for more rugged devices than the iPhone to gain ground this year.
According to IHL’s Mobile POS Vendor Database, iOS accounted for 47 percent of total mobile POS shipments in 2013 worldwide while Android had 33 percent of shipments and Windows 8 12 percent.
In 2014, iOS is expected to grow slower than the overall market for 2014 while Android is expected grow 104.6 percent and Windows 8 128.4 percent.
In North America, Windows 8 devices are projected to grow 183.9 percent.
Additionally, 64 percent of current mobile POS devices are smartphones. The move in 2014 will be toward phablet and tablet sizes. For example, 64.6 percent of all new mobile POS devices will be on phablet or larger screens in North America in 2014.
“The single most important finding is that retailers are demanding a single transaction engine for all of their touch points with the customer,” Mr. Buzek said. “So whether the interaction is at a traditional POS, mobile POS, ecommerce, mcommerce or kiosk, the retailers want to have the same transaction engine and core code.
“The user interfaces might be slightly different, but the underlying code they want to be the same so there are not five versions of the loyalty program code they have to manage just to make a change,” he said. “As such, this really forces retailers to look at their overall software architecture for customer touch points.”
Chantal Tode is associate editor on Mobile Commerce Daily, New York