Point of Order

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Point of Order

By John Karolefski - 05/24/2015

The last chance to reinforce or create a positive customer experience in the grocery store is at checkout, where the speed and efficiency of the point-of-sale (POS) system are critical. POS must also enable today’s complex promotions to reward customers for qualifying purchases, as well as accommodate mobile coupons, chip cards and the DataBar on print coupons.

But selecting new POS systems and upgrading existing units requires careful consideration. Grocers need a process to determine which hardware to invest in and which attributes are truly important to have.

“First, you need to identify your unique requirements,” advises Ken Morris, principal at Boston Retail Partners (BRP), “then determine how POS software will need to operate and what it will need to support. Once you have agreement on these factors, the next major question is retail-hardened or PC- and component-based. From there, you need to examine the peripherals that you currently support and want to support in the future. This is especially critical in grocery, where the peripherals can cost as much as the base hardware itself and usually have a longer life cycle.”

After all of this is assembled, he adds, an ROI and life cycle model is built before issuing a request for proposal (RFP) to potential vendors. Using the RFP information and industry research, work with a team comprising store operations, store construction, security, IT and infrastructure to test equipment and pick a winner.

Brian Yates, who works for one of those potential vendors, Sunnyvale, Calif.-based Fujitsu America, says RFPs have been the de facto standard for POS equipment selection for many years. The key driver behind purchases needs to be comprehensive value to the retailer, not just a goal of driving cost down.

Even if initial cost is the most important factor, Yates continues, retailers need to ensure that they adequately plan for future needs such as connectivity, offline operation, durability, survivability and future operational needs in the RFP process.

“It’s not about whether the store is new or a remodel, it’s about fitting into the infrastructure decisions being made for all stores,” explains Yates, Fujitsu’s director of systems engineering and retail POS/mobile solutions. “Stores get new POS equipment even when the store is not being remodeled. Yes, it’s easier to budget new POS equipment into a remodel, but at the end of the day, retailers execute ‘refresh’ projects to update POS equipment and stay on as few variants of POS equipment as possible. This is important for the support organizations ranging from depot maintenance to hardware support dispatch services to software support and image management.”

Greg Buzek, president of Franklin, Tenn.-based researcher IHL Group, agrees with Yates that retailers should consider where they see their business in five to seven years. He offers these considerations:

  • ➤ Consumers shopping on their mobile devices and bagging their own groceries
  • ➤ Expansion and acquisition plans
  • ➤ Click and collect as part of the plan

“The biggest mistake that grocers can make is making a decision based on where they have been,” Buzek warns. “Consumers are changing, and their POS of the future needs to be flexible enough to go where the business is going. What the data is showing is that grocers, like all retailers, are working towards a single, centralized view of the customer that allows for interaction across devices. They want to write the code for any change once, and have that reflected across all devices that the customer might be engaged through. The UI [user interface] might be different, but the underlying code, underlying item and customer information is the same.”

Grocery retailers obviously use a variety of POS hardware and software. The choice often depends on the size of the store and the number of weekly customer visits, as well as how forward-looking the retailer is in terms of technological knowledge and the changing demographics of its shopper base.

Pittsburgh-based grocery chain Giant Eagle has a standard footprint for POS hardware using Toshiba SurePOS equipment built for the supermarket environment. Toshiba ACE is used across the organization, which allows for developing initiatives and deploying them chain-wide quickly and efficiently, according to spokesman Dan Donovan, who lists stability and meeting security requirements as the most important attributes. An additional key factor is using a platform that can interface new initiatives such as loyalty or e-commerce. Finally, Giant Eagle sees mobility for POS playing more of a role in interacting with a customer within or outside stores.

Consultant Mark Heckman, who’s familiar with POS functions from his time as VP of marketing at Indianapolis-based Marsh Supermarkets, lists five rather broad categories of attributes that retailers should consider, given the dramatic changes underway with respect to payment platforms: flexibility, scalability, mobility, security and functionality.

Another five from Colleen Smith, VP of product marketing at Bedford, Mass.-based Progress Software: Ease of use, the level of security provided, the ability to be deployed across multiple devices, the ability to easily integrate with multiple back-office systems, and a system built with the next generation of users in mind.

How important is the cashier in this menu of POS attributes and capabilities? Fujitsu’s Yates points to the usability of the POS as the attribute most meaningful to a retailer’s business. In other words, it has to be reliable and easy to use by cashiers.

“If cashiers have issues with the POS equipment, the customer usually knows about it immediately,” he says. “Small things, like missing keys on keyboards, touch displays that ‘telegraph’ or bounce when buttons are pressed, scratched coatings on scanner glass that degrade performance, or printers that are worn out and jam often, all affect cashier performance and customer checkout experience.”

Yates goes on to list three POS upgrades that grocery companies looking for better-quality equipment should consider:

  • Imaging technology for handling current QR codes presented at checkout on printed media and on smartphones. Whether that’s a new hybrid bioptic scanner/scale, a handheld or fixed mount imager, or full or self-service, the need is already here in the marketplace today, and “many retailers do not have the technology in place to handle it.”
  • EMV-enabled devices for handling the new chip cards coming to the market. These devices offer another security method to protect consumer data.
  • Touch interfaces becoming the de facto standard for POS systems. Whether an all-in-one or distributed version, the touch interface and its UI design are now more critical.

“Grocers need to focus on mobile, line-busting, and self-shop functions that can be integrated into the POS,” says BRP’s Morris. “Grocers hate to give up front end space to extra lanes that only get used in peak times. Mobile shopping and line-busting provide the ability to ramp up customer service and total customer throughput without sacrificing valuable selling space. These features are also required to remain competitive with the shopping experience that the consumer is coming to expect everywhere.”

A number of promotions and payment activities that are becoming more popular or are pending include new loyalty programs, mobile coupons, DataBar on print coupons, and EMV payments, to name just a few. To serve all customers, the POS system must be able to process these activities efficiently.

“With many retailers executing a major portion of their loyalty programs through their POS system, any new system should be equipped to easily communicate with the customer database in real or near real time,” says Heckman, the consultant. “Furthermore, mobile payment systems are gaining significant traffic, and new POS systems should be adaptive to these emerging platforms as well as be flexible to communicate to multiple credit and debit processors. Adding NFC to the POS system in order to communicate to mobile systems like Apple Pay is now top of mind.”

Heckman notes that frequent shopper cards and key fobs are being discarded by customers in favor of loading their loyalty account information and barcode on mobile shopping apps. Therefore, any new POS system should be able to scan barcodes directly from an app. He also advises those retailers that have installed technology from a third party, such as Coupons.com, Inmar or YouTech, to ensure that digital couponing can fluidly continue to be supported on any new system.

Bruce Jones, a software specialist with Duluth, Ga.-based NCR, also sees the relationships from those services driving coupons electronically. Further, he sees a lot of activity right now with enabling customer loyalty solutions to handle electronic coupons and linking them to mobile phone app and e-commerce apps. That’s really driving a change in behavior among consumers from paper coupons and clips from free-standing inserts and the Sunday papers to a mindset where these are driven more electronically.

Looking at the big picture, Bob Doles, NCR’s product director, sums up: “Typically, when grocers are making investment decisions for their POS equipment, they’re looking to enhance the customer checkout experience. They also want to improve the operational efficiency of their stores and the productivity of their cashiers. And, of course, they want to maximize their investment over the long term.”

“The biggest mistake that grocers can make is making a decision based on where they have been.”
—Greg Buzek, IHL Group

“If cashiers have issues with the POS equipment, the customer usually knows about it immediately.”
—Brian Yates, Fujitsu America

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