Mirroring the introduction long ago of magnetic stripe technology to point-of-sale systems, the payments industry is now experiencing another important evolution; the dawn of mobile smart devices and our hyper-connected world by virtue of the Internet.
Leading theory on the future of POS is predicting it to become the second revolution in mobile technology, an all-encompassing integration with day-to-day merchant needs. From lowering transaction fees to accepting all sorts of payment types, monitoring and bookkeeping, the future role POS systems will play will be under tremendous scrutiny and importance. Future success will largely be dictated by the emerging technologies launching today.
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Key factors that will shape the POS of tomorrow:
– Mobile: the next 12 months will witness the proliferation and rise of mobile as a permanent fixture as payment method. Smartphone usage rates are growing exponentially, and the creation of many focused offshoot technology companies is helping pave the way for future payment platforms.
– Security and progression to EMV: With any rapid technological advancement (especially one that handles sensitive personal payment information) security becomes an important issue. The handling and integrity of payment information will be a hot topic with policymakers and governing bodies. Furthermore it is stated that all American-based merchants will need to adopt EMV-capable POS systems by the year 2015.
– Contactless Payments: NFC is driving this trend…but will it only remain a trend? As mobile smart devices become go-to daily habits for consumers, technology like NFC could take a permanent place.
– New Technology: Innovation begats new technological advancement, but certain companies in the traditional payment industry may find it hard to deviate from the well-beaten path. Payment goliath VeriFone made a huge leap for their business by acquiring global outdoor advertising network Clear Channel Outdoors Inc, and will introduce a promotional platform to integrate with POS and payment systems.
Balance for the future of POS will lie between two paradigms: 1) the desire to enhance current systems for ease of use, or 2) to solve existing problems. The latter idea is more reactive by nature and may not be sufficient in being innovative, but nonetheless it will be interesting to see how the payment industry continues to evolve in the years to come.
A recent report published by Cellit has home noted that retailers are seeing high success rates and ROI from targeted SMS campaigns that continue to drive new in-store traffic and mobile commerce. An expansive review of 1,180 campaigns was developed and sent by national large-scale retailers, and Cellit focused in on how SMS was being used to drive sales, retain SMS subscribers, and consequently grow contact information databases.
The key result found by Cellit was that when used properly to engage versus disrupt user’s daily life, SMS produced positive results six to eight times that of traditional e-mail marketing send-outs when comparing data collection, brand awareness and redemption factors. David Wachs, Senior Vice President of Mobile and General Manager at Cellit, had this to add; ““With eight times the response rate of email, mobile marketing is too powerful to pass up”.
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Furthermore, retailers have tuned into customers perception of intrusion and have begun implementing preference selection tools to ensure customers are receiving information of only personal interest.
Cellit was acquired earlier this year by digital engagement agency ePrize.
“How much is that doggy in the window?”
An age-old adage to the somewhat lost art of window merchandising.
Retailers have come full-circle recently from the increasing pressure within the retail space, emergence of e-commerce, and mobile. What was once a staunch tradition has evolved into an engaging entry point to brick-and-mortar stores.
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Iconic UK-based clothiers Ben Sherman launched an innovative window display that allows for interaction with consumers from the outside in. A simple control button is housed in a casing just outside the window where customers can activate a pressurized system that sends clothing through a carousel and can be viewed one by one. The idea is to create the desire for customers to interact with the display due to the novelty, but actually stumble on a piece of clothing they may like and therefore enter the store.
Using a similar tactic, Starbucks launched an integrated window display that uses a touch screen to allow consumers to select a series of gold stars that then transform into information about their My Starbucks Rewards program. It was originally launched in select stores in Toronto and Vancouver to support the Tazo brand push.
The strategic use of technology, as demonstrated, can turn a once two-dimensional process into a complete immersive and interactive experience.
Starbucks has expanded its mobile platform by bringing the company’s new Android app to the UK and Canada. Users will now be able to make payments with their mobile app, load their cards, check balances, and find any location by utilizing the store locator function. With the addition of these countries Starbucks mobile payments is now accessible at 14,000 locations.
My Starbucks Rewards has also been upgraded in the process. Users can now easily note when a free drink is available, keep a close eye on their balance, their star count, and the convenience of “touch to pay”.
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While these types of upgrades or expansions are not typically newsworthy, there are some interesting elements to this mix. Starbucks has refused to stand on the sidelines and wait for the mobile payments mass confusion to pass. They have instead delivered their own intricate system that has empowered them by offering up an end-to-end solution with mobile apps, full POS integrations, barcode scanners, and loyalty programs which are all managed in-house. Ultimately, Starbucks is opening up the possibility of mobile payments to the mass consumer market, getting them ready for an inevitable payment reality.
Context taken from Tech Crunch 6/11/12
In recent weeks, many payment companies have looked to the marketplace in order to assess “readiness” from an infrastructure standpoint to be able to integrate mobile POS systems and payment processing.
Motorola Solutions Inc. rolled out an in-depth survey of North American and European retail, hospitality and field services merchants to determine the level of interest in mobile payments and POS systems. The results indicated that 66% of participant’s revealed high levels of awareness and interest in mobile POS solutions and 42% currently use or plan to use mobile POS solutions within the next three years.
When looking at actual application interest, merchants focused on inventory management (51.3%), pricing and labeling (47.8%), return management (42.2%) and lastly merchandising (36.1%).
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Merchants were also asked the key reasons for making the jump into mobile: improved customer service, saving sales and special order product management, custom order fulfillment, line busting, serving store locations where fixed POS was not an option, and customer relationship/loyalty program management.
New technology can often be hard for people to adopt and learn, and even though the mobile world is showing definitive signs of high growth many of its users are still not too sure of themselves when it comes to apps in general. Many them are apprehensive of learning how apps work, their usefulness, and ultimately if they’re a good investment.
myPhoneMD has come up with an ingenious concept to bring apps out of
the digital world and into the real world by creating a retail environment that
entices customers to physically shop for apps. “The goal of the store is to
reduce buyer’s remorse,” said Shaun Walker, creative director at HERO|farm, New Orleans.
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The concept is quite simple: a café-style retail space that showcases removable boxes on shelving units that customers can pick-up, demo, and use to learn about a particular app. Using barcodes, each app can be downloaded as a trial or directly purchased through the use of barcode scanners. With a large open space and comfortable seating, patrons can take their time to peruse the various apps and ask sales associates one-on-one questions and advice.
The store is an extension of the MyPhoneMD retail chain, a client of Hero Farm, and only makes sense as an add-on to their current operation. As Walker puts it, “The goal of the store is to reduce buyer’s remorse, this gives them an opportunity to try out an app and make sure they like it before having to put up their money. People also tend to be scared of learning new things or of using the apps, so this removes a lot of the fear as well.”
MyPhoneMD is looking to rollout this concept in all of their current locations as they see this as an opportunity to reach out to customers in a whole new way. By creating a traditional retail shopping experience, both avid app users and newbies alike will feel comfortable with this new technology.
Fast food chain Burger King is now testing a program where consumers have the ability to pay for meals through a mobile smart device. This pilot program marks the continued foray into developing a clear m-commerce strategy that the chain hopes to bank on into the future.
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Teaming up with Firethorn Mobile Inc., this new program mimics a similar initiative previously launched by Starbucks. “The strategy is to provide retailers with a mobile payment service that does not require hardware – bar code scanners – investment at the point-of-sale,” said Chip Fishburne, senior vice president of financial services at Firethorn Mobile, Atlanta. “This is a cloud-based payment service that leverages the strong brand of the retailer,” he added.
Burger King currently operates over 12,500 locations in 82 countries worldwide. A global launch for the initiative has not yet been disclosed.
Lifestyle apparel retailer Guess has launched a program to bring innovative elements to their in-store shopping experience. Leveraging Verifone’s GlobalBay mobile retail platforms and software, Guess has set up rolling stands with iPads in approximately 12 stores across the USA. This is a test phase for the retailer, with plans to expand this program to their other locations based on the usage rates and overall functionality within their existing retail environment.
The iPad stations allow customers to shop for products in-store as usual but are seamlessly integrated into the shopping experience by exposing them to enhanced brand level content. The iPads come preloaded with GlobalBay’s Lookbook application which showcases videos, content, and an innovative product catalog function that ties to an e-commerce platform, all while integrating with current Guess POS and inventory systems. The software is stock with these backend functionality, allowing a brand to simultaneously maintain creative control over their layout and aesthetic design to properly showcase their features.
The stations are mounted on wheels, allowing employees the ability to move the mobile iPad freely in the store so they can, for example, assist further in changing rooms by suggesting alternate colors and styles to patrons who are actively trying on their products. Store managers are mandated to use the stations to help train new staff, give up-to-date product knowledge sessions, and help manage the Guess brand. Future plans for the system include the addition of a barcode scanner and credit and debit card mag stripe units to automate the checkout process, a similar trend that has taken hold in major department and grocery stores.
Will this be the end of the salesperson? Not likely, but it will modernize the way retail stores, their clerks, and their customers interact. The traditional retail shopping experience at Guess and other clothing stores alike are going to be become much more technology-driven and better equipped for enhanced service.