POS –The Hub of Modern
Omnichannel Retailing
CHAIN STORE AGE
CHANNELS > COMMERCE > CUSTOMERS
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CHAIN STORE AGE
CHANNELS > COMMERCE > CUSTOMERS
CHAIN STORE AGE
T
he trusty POS, a stalwart of the retail IT architecture since the 1970s, is not usually a leading
topic of discussion about modern retail technology. However, truly forward-thinking retailers
understand that POS systems, which include traditional registers as well as mobile devices,
tablets and kiosks, are the point of convergence for omnichannel operations.
Indeed, the POS system is increasingly serving as the platform that connects all the different parts
of the enterprise and pieces of data, once siloed, that must now seamlessly integrate to support the
omnichannel customer experience. This single point of commerce is the key to success in the modern
omnichannel retail arena.
In this report, Chain Store Age and TCS examine the increasing adoption of a universal commerce
store platform by retailers and why the POS is the ideal hub for modern omnichannel retailing.
To better illustrate the potential offered by a universal store commerce platform model, let’s drill
down into several specific retail-use cases.
1. A Real-Time View of the
Entire Enterprise
Retailers are increasingly moving toward adopting a universal store
commerce platform-based omnichannel model. According to a recent
study from Boston Retail Partners, “POS/Customer Engagement
Survey,” there will be a 663% increase in the number of retailers
using this type of foundation in the next four years.
One of the most important benefits a universal store commerce platform provides retailers is the ability to link order management and
e-commerce systems, as well as other critical back-end systems to the
POS. This type of connectivity enables retailers to achieve real-time
awareness of their entire inventory stock, as well as from any point
in the enterprise.
Using that connectivity and awareness, retailers can minimize or even eliminate the loss of in-store
sales due to out-of-stocks. By seeing where an out-of-stock item is available elsewhere in the enterprise, and then using a distributed order management system that is linked to the universal store
commerce platform, retailers can fill orders at a store with stock from another store or warehouse.
A retailer can also fill an order at one store from a store in a different region where it is on markdown, thus saving a clearance sale in addition to saving a sale lost due to out-of-stock.
At scale, retailers can achieve substantial improvement in margins with chain-wide reduction in
markdowns and clearance sales. This is the true promise of the universal store commerce platform
— the distribution of commerce activities across the enterprise, using the POS as a central hub,
enabling delivery of seamless front- and back-end operations across every touchpoint.
2. Buy Online, Pick up/Return in Store
Buying a product online and then picking it up and/or returning it at a local store is one of the most
widely touted “seamless” or “omnichannel” customer service offerings a retailer can provide. From
the viewpoint of the customer, who has little or no awareness of how shopping channels actually
operate, this is a simple and straightforward process.
But from the viewpoint of the retailer, who typically operates online and brick-and-mortar channels
with a siloed infrastructure that may rely on totally separate systems infrastructures, allowing customers
to pick up or return online purchases at a brick-and-mortar store is a complex and challenging task.
Enter the universal store commerce platform. With a POS system that serves as a foundation supporting and connecting all the disparate inventory, fulfillment and transactional systems supporting
each individual channel, retailers can easily turn their stores into “one-stop shops” for managing
orders made from any point in the enterprise.
The elimination of silos on the back end means front-end orders can be viewed, processed and distributed across channels. Retailers can also apply this new level of cross-channel connectivity to managing
returns, easing the often cumbersome process of shipping online orders back and waiting for a refund.
3. Universal Shopping Cart
It is only fitting that the universal store commerce platform can serve as a foundation to support a
universal shopping cart that collects and tracks all the items a customer selects for purchase across
all channels. The practical result is that associates have immediate access to their shopping history.
This includes both items the customer may have purchased through digital channels, as well as items
he or she has selected for purchase and then abandoned. Thus store employees gain the ability to
offer real-time cross-sells and up-sells based on digital purchases, as well as to covert previously lost
digital sales with targeted in-store discounts and offers.
Retailers can practice true omnichannel CRM that considers the customer’s digital footprint when
making targeted in-store offers. Merchants can also increase the size of store market baskets and
in-store customer satisfaction levels. In addition, this type of holistic targeted marketing could even
increase frequency of store visits, as the customer will find his or her in-store shopping experience
more personalized and rewarding.
4. Location-Based Marketing
A universal store commerce platform enables retailers to conduct
truly personalized and relevant, contextually aware, location-based
marketing. Using geolocation technology, retailers can sense when
an opt-in customer comes within a certain range of a store. Then,
using the capabilities of the universal store commerce platform, a
retailer can deliver time- and location-sensitive mobile offers that are
only good in the nearby store, to drive traffic and sales.
While many brands can perform location-based marketing using instore inventory and the customer’s brick-and-mortar shopping history,
retailers with a universal store commerce platform can perform location-based marketing at a much deeper, more lucrative level. Targeted
offers can encompass the customer’s digital shopping history and
include inventory from locations beyond the store, making them more
relevant while also expanding the amount of merchandise and scope
of personalization.
5. Endless Aisle
Endless aisle is the ability of a retailer to let the customer browse inventory stock at other stores and
warehouses, in real time. Using kiosks, tablets or other connected devices (which serve as extensions
of the POS), retailers let the customer have a direct look at the full complement of merchandise.
As opposed to just having associates search for out-of-stock items upon request, endless aisle
democratizes the inventory openness provided by the universal store commerce platform and can
greatly boost incremental sales, as well as reduce sales lost to out-of-stocks.
6. Online Purchases at the Point of Sale
Nothing is more frustrating for a customer than waiting in a long checkout line and discovering
when they finally reach the POS terminal that they have the wrong item or need an extra accessory,
and those items are not available in store.
Universal store commerce platform functionality lets retailers instantly resolve these types of issues at
the point of sale by allowing associates to search full inventory and place online orders, which can
be integrated with any existing in-store transactions. Online orders can be fulfilled at the store or
delivered to the consumer’s home.
CONCLUSION
A traditional POS is no longer sufficient to fulfill demands of the modern retailer. The onslaught of
technology disruption and ever-changing consumer behaviors are pushing the industry to re-imagine stores to coexist with digital channels. This, in turn, requires traditional POS platforms, which
haven’t evolved significantly in the past several years, to take a quantum leap in terms of technology
and functionality to become the hub of omnichannel retailing.
The next-generation POS therefore needs to evolve into a universal store commerce platform that serves
as the central hub connecting all the disparate parts of the enterprise needed to provide a seamless
customer shopping experience. In addition to providing a consistent front-end experience that is aligned
across all channels and customer touchpoints, the universal store commerce platform also eliminates
back-end silos to provide real-time inventory transparency and accessibility. Thus, it supports distributed
order management more effortlessly, delivering a true seamless commerce experience. n
THE TCS VIEWPOINT
By Dhiraj Jain, Head - TCS Retail Products
POS platforms have traditionally delivered capabilities to
complete a retail transaction within a store, thereby being
just a “point of sale.” They gradually evolved to become
“point of service,” delivering capabilities for sale, return,
customer order, inventory management, financials, etc.
Through this evolution, they were able to consolidate
many new capabilities, which were done either manually
or through separate platforms earlier. But this also had an
unintended consequence — point-of-sale systems became
large and monolithic, and this is the primary challenge
that most retailers have today with their POS.
Most POS systems are proprietary with closed architecture and apply a lot of constraints on retailers to integrate other channels (online, mobile), while providing
a seamless customer experience. Every major retailer
has certain specific business needs and invariably a
unique business model as well. This means incredible
challenge in terms of integration with disparate systems
and products to suit their unique needs.
To meet the demands of savvy customers, retailers need
to go beyond making incremental changes to the POS.
Instead, retailers must challenge the status quo of the
existing “point of service” paradigm and embrace
innovation to create a new “point of differentiation.” To
deliver true differentiation, retailers need to imbue their
POS platforms with the following characteristics to meet
the evolving needs of the omnichannel consumer:
1. An open platform that seamlessly integrates with
e-commerce platforms and order management systems
to eliminate barriers across sales channels.
2. A wide assortment of associate- and consumer-facing in-store sensors and mobile devices to facilitate
product discovery and research.
3. Contextually relevant information available to store associates and managers in real time to help in cross-selling,
up-selling and saving sales that would otherwise be lost.
4. Extreme personalization that helps keep shoppers
engaged throughout the “path to purchase.”
5. Agile approach to systems upgrades, which is
necessary to keep up with the rapidly changing POS
environment and evolving consumer expectations for
in-store service and experience.
CHAIN STORE AGE
CHANNELS > COMMERCE > CUSTOMERS
Produced by
CHAIN STORE AGE
CHANNELS > COMMERCE > CUSTOMERS
CHAIN STORE AGE