The Keys to Understanding Mobile Point of Sale

Posted: Oct 27, 2014

Industry research indicates that mobile point-of-sale deployments are taking off. According to a 2014 Forrester Research report, 79 percent of retailers are projected to have deployed mPOS solutions before the end of 2015. In fact, demand for mobile capability in the retail sector has been strong for some time.

A key inflection point came with the arrival of the Apple iPad, which established the tablet as a capable tool for both personal and business use. The emergence of compelling applications for the platform, coupled with peripherals for mobile scanning, printing and other tasks, transformed the iPad from an impressive feat of design and engineering into a potent hub for remaking the point-of-sale experience. Solutions from numerous providers leverage the iPad platform and attendant peripherals to make mPOS attractive to smaller businesses.

A steady drumbeat of technical advancements has fueled mPOS adoption. Affordable and ubiquitous Bluetooth connectivity has enabled an ecosystem of mobile printers, scanners, card readers and other peripherals, even as snap-in peripherals for USB and other connectors continue to propagate. Vendors such as Ingenico, MagTek and Motorola have introduced products that address multiple platforms, including Apple iOS, Android and Microsoft Windows.

Forrester Research confirms that mPOS adoption has been driven heavily by consumer-grade devices, including tablets and smartphones. According to Forrester, 43 percent of surveyed companies report using iPad tablets in mPOS operations, more than any other device type. Roughly a quarter of businesses (26 percent) reported using iPod Touch devices, while 17 percent said they use iPhones.

Numerous characteristics of consumer-grade tablets and smartphones make them attractive targets for mPOS implementation, including:

Low cost: Consumer tablets typically cost significantly less than purpose-built POS devices.

Peripheral support: Well-supported platforms such as Apple iPad and iPod/iPhone can be paired with a wide array of point-of-sale peripherals.

Broad application support: General-purpose tablets and smartphones can run software that lets employees go beyond payments and transactions to interact with inventory data, look up customer histories and access loyalty program features.

Location-based features: GPS and Wi-Fi location functionality enable value-added apps to leverage nearby stores, inventory and resources to direct customers to available products and services.

In addition, mPOS solutions offer support for emerging technologies that enhance mobile payment options, including near-field communication (NFC) and chip-and-PIN EMV (Europay, MasterCard and Visa) card authorization. In this regard, modular mPOS systems that allow a central display and processor unit to connect to different peripherals offer significant value. When EMV card payment becomes broadly available in North America, stores with these kinds of mPOS solutions can simply deploy new readers and updated software to support these transactions, rather than replacing the entire POS solution.

mPOS Scenarios

The adoption of mPOS systems is driven in large part by the value of untethering transactions from fixed stations, as well as rich customer interaction that can help increase sales, improve efficiency and enhance customer satisfaction. Among the compelling use-case scenarios are the following:

Line-busting: Research has shown that many consumers are likely to walk out of a store if checkout lines are too long. Mobile POS solutions enable retailers to combat this problem by line-busting, deploying agents with mobile systems to check out customers as they wait in the queue.

The use of mPOS technology allows retailers to bring additional transaction points to bear during periods of peak activity, reducing wait times and avoiding loss of sales. Home Depot pioneered this tactic in 2011, deploying 30,000 Motorola mPOS devices across all its U.S. store locations. Other large retail operators, including Gap and Nordstrom, have adopted mPOS solutions for line-busting and in-aisle checkout.

Point-of-service transactions: Mobile-equipped sales agents can conduct transactions at the point of service — often in the aisle or at the product display area — immediately after a customer selects a product. For example, a shopper at the Nike store in Boston never has to go to a cashier station. Rather, he or she hands a credit card to the sales agent and receives a receipt and a bag for the purchased items. The purchase is completed within seconds of a decision being made. In-aisle transactions are also useful at stores such as Lowe’s and Home Depot, where large and unwieldy items can create disruptive backups at fixed POS stations.

Loyalty programs: Many mPOS systems support rich applications, such as customer loyalty signup and service programs that help customers take full advantage of earned credit. Loyalty program awareness can enable sales associates to call attention to special discounts and offers related to a customer’s purchase or inquiry, as well as ensure that members are recognized for their patronage. Mobile POS systems can also be used to sign up new members, boosting participation and helping drive more sales traffic to the store.