The traditional point of sale model, complete with an anchored screen attached to a cash wrap, has been around for ages. However, this status quo has been challenged over the past few years and, with COVID-19 transforming physical stores at an accelerated rate, we can expect this classic POS model to become obsolete in just a few years.
Replacing the traditional POS model will be a cloud-focused and software-defined model that gives shoppers their choice of checkout and reimagines the store experience. It will be a modern POS system centered around microservices. But where are we now in the evolution of the POS model and how will the industry arrive at this new model?
The cash register, developed around 1880, has been part of our consumer culture since retail rose in popularity. However, there is still an old belief – even though technology has advanced significantly – that stores must have this traditional concept of a POS cash register with a screen and peripherals.
Thankfully the expectations of POS are evolving and it’s an exciting time to be in retail. Amazon has challenged the industry and how it thinks about the traditional point of sale through its Amazon Go concept, and the industry is responding. In a frictionless store, there’s no physical POS user interface within the store; customers simply download the app to enable mobile checkout and either exit through the barriers of the store or present their app to a self-checkout terminal. The phone application notification then tells shoppers what they have purchased after they walk out of the store. Essentially, the user interface that’s associated with the peripherals is now optional.
This is the beginning of a move away from the very traditional PC-oriented point of sale process, to a software-led strategy that empowers frictionless checkout models including mobile checkout, self and contactless checkout and beyond. This new perspective is all about the reimagining of the point of sale as a cloud-based endpoint built on microservices making a variety of checkout options a possibility. As the supporting infrastructure continues to advance, it’s easier for stores to integrate necessary sensors to the core applications that are running them.
While some consumers have adapted fast to the world of e-commerce, 80% of sales transactions still occur physically in the store. Ultimately, shoppers want the flexibility to choose their own fulfillment mechanism.
This is why we don’t just have to imagine a new world of frictionless shopping. We also have to work out how to incorporate the traditional world, efficiently, within new world technology. Moving forward, stores must provide a flexible variety of fulfillment options for shoppers to ensure they don’t alienate parts of their customer base.
With point of sale transitioning to a cloud-based endpoint built on microservices, a whole new variety of checkout options become a real possibility, such as traditional, frictionless self-checkout or e-commerce options. Essentially, this software-defined approach is enabling retailers to go on a journey from traditional POS environments to a fully cloud-enabled world.
According to our recent research, convenience store retailers believe that offering more checkout options to customers is important for their future, now and post-pandemic. Only 10% say they have the exact POS infrastructure to serve the business now and in the future.
Retailers understand the demand for new checkout options is rampant across the customer landscape. Especially during the ongoing pandemic, shoppers want to ensure they receive their products in a fast, easy and safe manner. The only way to make this possible is through updating legacy retail systems and embracing transformation at checkout. Those that do not offer advanced checkout options to their customers stand to lose market share to the competition.
Meanwhile, COVID-19 has accelerated the rise in popularity of delivery companies such as Favor, Instacart, DoorDash and GoPuff. If not done properly, partnerships with third-party delivery companies can result in retailers having to utilize multiple IT devices to fulfill the orders, all on disparate systems – ultimately leading to inefficiency and confusion for the front and back of the house. In order to deliver operational efficiency, retailers should take a “less is more” approach and virtualize in-store IT ecosystems to minimize the number of devices to just one, yet run multiple applications from the same device. This will improve efficiency, security and overall operations while minimizing retailers’ IT footprint.
A cloud-based POS is inherently virtualized. Virtualization of both the front and back of the store is a key step to a more flexible future where POS becomes a function available universally yet can be tailored to meet the diverse needs from individual mobile transactions to the scale and performance necessary in a supermarket.
COVID-19 has merely accelerated the change we all knew was coming, providing retailers with even more reason to adopt new POS strategies that enhance checkout flexibility. In the past vendors and retailers would often be the catalysts for change in POS technology, but it’s the customers now driving change, from touchless checkout to curbside collection and automated delivery. Ultimately, retailers must offer the checkout options shoppers want so it’s essential for them to update store systems and embrace a POS experience based on microservices instead of the traditional, stationary approach.