Yankee Group: Mobile PoS is the new 'must have' for retailers
While mobile point of sale (mPoS) was a tool initially geared towards small merchants, it didn't take long for retailers to leverage this disruptive technology for a competitive advantage. Over the past two years, many of the nation's largest merchants have eschewed the traditional cash wrap in favor of a flexible mobile alternative. In doing so, they're finding that mobile point of sale (mPoS) isn't just a solution for combating long lines during the holidays--it's much, much more.
Transaction volumes show mPoS is far from an interim line-busting solution. J.C. Penney, for instance, completed a quarter of all transactions via mobile devices as of March 2013. The company now plans to equip all employees with mPoS devices by the end of this year. Moosejaw, an outdoor goods retailer, is no stranger to high volumes of mobile checkout transactions either. Just 16 months after implementation, the retailer is now seeing upward of 70 percent of transactions conducted via mPoS.
In our conversations with retail execs one theme consistently emerges: mPoS is transitioning from a nice-to-have to a need-to-have. This theme has also surfaced in Yankee Group's Enterprise Survey. Today, 61 percent of companies with over 500 employees have either already deployed mPoS or plan to do so within the next 12 months.
Mobilized checkouts have the potential to revolutionize retail by providing considerable value beyond the transaction. We the following as key advantages to deploying mPoS in retail settings:
- Empowered employees. For brick-and-mortar retailers to effectively differentiate from cheaper, online alternatives, leveraging knowledgeable employees to add value to the in-store shopping experience is a must. J.C. Penney and Best Buy Canada, for instance, load up-to-date training materials, product information and product comparison tools directly onto associates' mPoS devices. Mobilizing the checkout allows retailers to take their back-office online presence and PoS directly to the customer anywhere in the store. This, of course, translates to stronger and more informed customer service.
- Higher conversion rates. mPoS unchains employees from their registers, allowing them to engage and build rapport with customers. More so, a mobilized sales force can access pertinent product information that can be instrumental in influencing a shoppers' decision-making process. For the customer, this means a more robust shopping experience and less cognitive dissonance when making a purchase. Alex and Ani cites the increased service provided by its mPoS implementation as a key factor in increasing sales by 318 percent from the 2011 to 2012 holiday shopping seasons.
- Increased sales floor space. Cash wraps take up sizable chunks of the sales floor that go un-monetized. By removing even one physical PoS (which occupies, on average, 15 square feet) and replacing it with an mPoS-enabled employee, retailers can realize impressive returns. Merchants are now beginning to design storefronts with an mPoS-centric strategy. Moosejaw's new locations have 50 percent less floor space occupied by cash wraps (a decrease from 200 square feet to 100 square feet), which has allowed the company to feature new brands and a greater inventory assortment.
With mobile card acceptance quickly solidifying its role within the retail ecosystem, retailers without mPoS on their implementation timelines must ask themselves one question: Why not? To remain competitive--with both online and brick-and-mortar competitors--and improve the overall shopping experience, retailers should pursue mPoS solutions in the near term.
Jordan McKee is an Analyst on Yankee Group's Mobile Marketing and Commerce team. His research examines the development of mobile devices being used in the physical world for payments and other forms of transactions. Jordan's primary areas of coverage include mobile wallets, mPoS, EMV, enabling technologies, loyalty, and couponing. Since joining Yankee Group, Jordan has been quoted in a number of top publications, including Businessweek, Yahoo! Finance, Adweek, Computer World, The Boston Herald, Main Street, Payments Source, and Mobile Marketer. In addition, he has spoken at leading payments industry conferences. Follow Jordan on Twitter @jmckee_yg