Let’s face it – smartphones are no longer a luxury, they’re a necessity. For better or worse, modern times dictate that most people carry their phones with them at all times, for both business and personal use.The same necessity for mobile technology adoption is increasingly becoming true for businesses with conventionally designed retail floors. Cash registers that have seemingly forever tethered employees to a stationary location are kind of like the corded landlines of yesteryear. Now, with the advent and relatively universal adoption of mobile technology, it has become possible and increasingly necessary for businesses to experiment with exciting and engaging new checkout and customer service procedures through modern-day mPOS systems.
The same necessity for mobile technology adoption is increasingly becoming true for businesses with conventionally designed retail floors. Cash registers that have seemingly forever tethered employees to a stationary location are kind of like the corded landlines of yesteryear. Now, with the advent and relatively universal adoption of mobile technology, it has become possible and increasingly necessary for businesses to experiment with exciting and engaging new checkout and customer service procedures through modern-day mPOS systems.But actually making those mobile solutions work effectively, efficiently and safely in order to boost a business’s bottom line can be easier said than done. To discuss how the latest/greatest point-of-sale terminals are, in part, providing a better checkout experience to consumers and how they’re helping to shape the rapidly evolving retail experience, PYMNTS caught up with Jordan McKee, a mobile payments analyst at 451 Research, who leads the firm’s coverage in the space.
But actually making those mobile solutions work effectively, efficiently and safely in order to boost a business’s bottom line can be easier said than done. To discuss how the latest/greatest point-of-sale terminals are, in part, providing a better checkout experience to consumers and how they’re helping to shape the rapidly evolving retail experience, PYMNTS caught up with Jordan McKee, a mobile payments analyst at 451 Research, who leads the firm’s coverage in the space.
McKee said that, more than anything else, merchants should be using mPOS technology to enhance and improve the experiences customers have in their stores. If the customer’s experience is positive, customers come back again and again, he said.
“I think first and foremost it has to be used in a way that is actually adding value to the shopping experience,” McKee said of mPOS systems. “So, for retailers, they really need to focus on applications that are really going to drive value and go above and beyond the experience that already exists.”
In order to ensure mPOS does add in-store experiential value, McKee added, retailers need to have a clear idea of what they hope to achieve with the technology.
Being engaging, rather than off-putting
The most common way for merchants to add that value to their shopping experiences is with a new and improved checkout process. By using mPOS technology, merchants can allow their associates to help customers pay for items from anywhere in the store, eliminating what’s been historically one of the worst parts of a shopping experience: waiting in line.
While it may seem like a small change, Etie Hertz, CRO of ShopKeep, a company that offers an mPOS system designed for the iPad, said that allowing employees to interact with customers more easily and directly can have a huge impact.
As an example, he cited Kansas City-based Burning Spiders skate shop, which recently installed an mPOS solution with the help of ShopKeep. As part of the new setup, Hertz said, Burning Spiders did away with traditional registers, allowing employees to roam the showroom floor and find shoppers who may need some help making decisions. It’s also allowed the store to cut down on the amount of time customers spend waiting in line, keeping those customers happier in the process.
Hertz said that the skaters who visit the shop have had a noticeable reaction to the new technology.
“It’s having that personal relationship with your merchant by actually engaging with them, walking around the store, standing next to them while you swipe a transaction while, for example, they’re trying out a skateboard,” Hertz said. “Those are things that didn’t exist pre-mPOS, and that’s pretty cool and unique for a lot of our merchants.”
According to McKee, “line busting” and helping customers with questions or issues is exactly the kind of use that can make mPOS most effective.
McKee cited Moosejaw, an outerwear and outdoor gear retailer, as another example of a retailer that has effectively done away with cash registers. The company, he said, has replaced its cash registers with savvy employees equipped with advanced mPOS terminals that can process a wide range of payment methods, including mobile payments.
This has also helped Moosejaw save on precious retail space, he said, which has been better put to use with more products and displays.
Having mPOS-equipped employees on the sales floor, McKee pointed out, eradicates the problems that come with long lines, including customer dissatisfaction, which can even lead to checkout abandonment.
But, retailers need to be careful when trying to engage customers, McKee cautioned.
“If you have an mPOS-enabled associate who’s simply stalking shoppers as they pursue the sales floor, they’re not creating an inviting in-store experience that you’re going to want to return to,” McKee pointed out. “The bottom line is: How are you applying the technology to actually make the in-store experience better? You shouldn’t be accosting customers, you shouldn’t be stalking them, you should be looking for those opportunities to go above and beyond what you’re already doing.”
More than just faster checkout
While engaging with customers and improving their checkout experience with attentive employees and quicker checkouts is a big part of how mPOS can be used effectively, it has become more important for businesses to consider alternate ways to improve consumer experience. In fact, McKee said that one of the biggest mistakes some mPOS adopters make is thinking of the technology as only a modern cash register.
“Payment acceptance should be one of many features that device is capable of,” McKee said. “Payments is the period at the end of the sentence. It’s everything that comes before that, that really matters, so that’s how you should be thinking of that mobile point of sale device.”
Retail Pro is an example of a software company attempting to help merchants avoid that mistake.
The company works with merchants to help them compile and understand mPOS customer data, which is useful in helping merchants understand the dynamics of customer retention.
“It’s really about knowing who your shoppers are and being able to recognize their habits, their trends and cater to them,” said Alexandra Frith, Retail Pro’s director of marketing. “So the data power and utilization of the data in the system is where all the heavy lifting is going to be happening.”
Kevin Conner, Retail Pro’s director of product strategy, agreed, saying that the data collected can be used to help companies form a bond with their customers.
“If you have your army of data scientists and they’ve created an application where they know what to look for, they know those trends and can show you those trends and point you in the right direction,” Conner said. “At that point you can use that data system to build loyalty with consumers, because you have the right information.”
Keeping it all safe
With the increasing number of breaches, security at point-of-sale terminals is a concern for both merchants and consumers. Today, data breaches at point-of-sale terminals account for 47 percent of data breaches, according to Verizon’s 2016 data breach investigation report.
Whenever so much digital data is collected in one place, security automatically becomes a big concern, and that is no different for mPOS, McKee said.
“I think when you start to peel away the layers of mobile point of sale, you realize that there are a number of new security threats. Mobile point of sale is going to open up all sorts of new attack factors,” he said, pointing to the destructive potential of new types of malware that can affect mobile devices.
And so, according to McKee, businesses should emphasize forming partnerships with experts in the security field and embrace several different solutions in order to keep their data and customers safe.
Lessons learned from EMV
When it comes to those security solutions, McKee said there are a few “must-have” protections as safeguards from fraud or bad actors that all companies should employ, and chief among these is EMV.
But, according to Derek Webster, CEO of CardFlight, using EMV can be a tricky task for some merchants.
“The EMV migration to the U.S. has been the biggest thing for our company over the last 18 months,” Webster said, recalling last year’s liability shift.
McKee noted that those challenges companies faced when adopting EMV should teach them important lessons about dealing with new innovations in security and technology such as NFC security, Bluetooth low energy and other new technology. With all the new tech coming down the pike quickly, McKee said businesses need to educate themselves about what’s around the bend and prepare their employees for the change.
“The biggest takeaway from EMV is that there’s a need for future-proofing,” McKee said. He noted many companies made big investments in mPOS technology early on, only to quickly see them become outdated and obsolete.
“Very few of them were compatible with EMV, very few of them are compatible for NFC payments, contactless payments,” he said. “Not to say that they squandered that investment, but you’re paying considerable cost to either re-terminalize all that hardware or do something in the way of retrofitting, and that’s another investment that’s unforeseen.”
Overall, McKee said, companies that are looking for the best results from a new mPOS system need to do a few things: have a clear plan to improve customer engagement without making shoppers feel uncomfortable; use the system for more than just payments and purchases; and be ready to adapt in order to keep it all safe.
This is a technology that’s not only for payments,” he said. “It should be unchaining your employees from the cash wraps and getting them out there engaging with customers, and using it to build out the in-store experience.”
But, more than anything, mPOS should be about making things better and more attractive for customers.
“That’s the goal,” McKee said. “It’s not just to accept payments, it’s to make it a better experience for the shopper.”
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About the Tracker
The PYMNTS.com Payments as a Service Tracker™, in collaboration with Cayan, is designed to give an overview of the trends and activities of merchant platforms that not only enable payment processing of new and old technologies, but also integrate with other features to improve the merchant’s experience, including customer engagement, security, omnichannel retail experience, analytics, inventory management, software and hardware management, and more.