How the e-commerce boom is transforming store tech

GUEST BLOG: In this contributed blog post, VP of strategy at Aptos, Nikki Baird, explains the ways in which e-commerce is transforming in-store tech and disrupting point of sale (POS). 

Here are five questions retail CIOs should ask when evaluating modern POS systems to separate the ‘must-haves’ from the ‘hype’.

At first blush, it might not make a whole lot of sense that the boom in e-commerce is driving massive changes in retailers’ store technology systems, such as point of sale (POS).

But the reality is there’s a cataclysmic shift taking place right now in how retailers evaluate, deploy and integrate their in-store tech. And the No. 1 driver behind this disruption points squarely back to consumers’ online shopping habits and how those habits shape their in-store expectations – or what we’re increasingly calling “phygital” behaviors.

For many retailers, their POS systems did not have the necessary capabilities to support pre-pandemic omnichannel demands, let alone the shopping journeys now preferred by post-lockdown, digitally dependent consumers.

Added to that challenge is the fact that many retailers face a technology cliff. POS solutions that some retailers use are so old that hardware manufacturers don’t even make spare parts anymore, much less the whole till, and the operating systems on those devices are facing end of life – and all the security risks that come with it. It’s safe to say that retailers’ ability to quickly spin up new consumer experiences via their POS, like curbside pickup or appointment setting, is far-fetched, indeed.

In the truest form of supply and demand, capitalism, customer-centricity, or all of the above, retail software vendors have responded to retailers’ need for transformative POS solutions with a bevy of new offerings.

These solutions (and their corresponding marketing campaigns) tout everything from being modular and composable to next gen and future-proof to cloud-native and API-driven.

So, what does all that actually mean? And, how do all those things actually help retailers modernise stores for digital-first retailing and to better serve their customers?

As retailers seek the answers to these questions in the context of their own businesses, here are five questions to ask during the selection process to help determine whether a POS solution is truly future state or nothing more than a bowl of buzz-word soup.

Question No. 1 – Cloud native or not? Take a look under the hood.

Cloud solutions are all the rage. In fact, Gartner forecasts that cloud spending will exceed 45% of all enterprise IT spending in 2026, up from less than 17% in 2021.

So with all the momentum headed the way of the cloud, some vendors have taken shortcuts. They have responded to the availability of IaaS and PaaS by moving their “black box” licensed, on-premises software solutions to the cloud.

While this approach can drive incremental benefits in the short term, it is not a viable long-term strategy, as retailers are still hampered by multiple software application boundaries that prevent them from delivering a unified commerce experience.

When it comes to POS solutions that can support unified commerce, look for vendors that offer a cloud-native POS system that was built from the ground up to run on a cloud platform.

If you don’t spend the time to find a cloud-native vendor, chances are your new “cloud” POS solution will have bits and pieces of on-premises, distributed client-server architecture lurking beneath the hood, and you’ll still be plagued with the flexibility constraints that drove you to seek out a cloud solution in the first place.

Question No. 2 – Extensible and API-driven, or more systems spaghetti?

Similar to the cloud-native considerations above, a modern POS system should have been developed around APIs first, instead of creating the solution first and the APIs later.

The solution’s architecture framework should allow for collaborative development that does not compromise the underlying platform. Integrations with third-party or external solutions should be API-driven instead of using the hard-coded method that most retailers leverage today.

Importantly, when evaluating the underlying platform, look for solutions that are built on a microservices-based architecture instead of a monolithic code base. This way, when you need to enhance, tweak or replace business logic, only a small part of the solution needs to be touched – a much more nimble and cost-effective way to refresh your capabilities and critical for keeping stores moving at the speed of digital consumers’ expectations.

Question No. 3 – Omni-ready or multiple vendors required?

As mentioned above, the ability to easily integrate solutions via APIs is critically important; however, there are some capabilities that a modern POS system should offer all on its own, out of the box, or at least have on its immediate roadmap – and those capabilities heavily center on omnichannel.

As the store reinvents itself to be the center of the omnichannel journey, it’s only natural that the POS function must be reinvented as well. To that end, POS systems should increasingly offer some capabilities that are more traditionally found in order management systems (OMS), such as in the area of fulfillment.

POS and OMS are converging to create unprecedented levels of connectivity in-store; this is the only way to meet the new standard for a shopping experience that mirrors the level of service that customers have grown accustomed to online, now extending to the physical realm.

When selecting a POS offering, look for a solution that is being developed to give store employees access to customer, order and store inventory information all in a single view – without the need to buy and integrate solutions from multiple vendors.

Question No. 4 – Offline resilient? Ability to ring transactions anytime, anywhere?

If you want to see a retailer break out in a cold sweat, tell them their store system is down and unable to ring up transactions.

While the advancements in network connectivity have improved by leaps and bounds, the reality is network connections still get lost and store systems still go down – especially in remote areas.

As part of your POS selection process, uncover vendors’ strategies around offline resiliency and how their system is able to ring up transactions, even if connectivity is lost.

Does the POS solution depend on store servers? What protocol is in place for processing transactions offline and then syncing that data when reconnected to the cloud?

The ability to complete a sales transaction anytime or anywhere, online or offline, under any circumstance is a core advantage in an advanced POS system.

Question No. 5 – That sounds really cool, but does it scale?

It’s easy to get caught up in all the buzz of next-gen POS solutions. This stuff is really cool – the ability to string together microservices to create differentiating experiences; the opportunity to transact virtually anywhere; the convergence of POS/OMS to deliver on consumers’ channel-less expectations.

But to bring us back down to reality, no matter how exciting these capabilities may sound, we can’t forget three words that comprise one of the most fundamental considerations in any software selection process: Does it scale?

The importance of this question will depend heavily on your current store count and planned store growth, your current geographic presence, and any international expansion plans.

A solution that is consistently deployed in retailers with less than 50 stores is likely not the right fit if you’re at 250+ stores and counting.

Also, be sure to ask for the most up-to-date list of supported countries for the POS solution, as well as countries on the vendor’s roadmap, to ensure the best match with your global footprint. Digital consumers increasingly find retailers irrespective of geography. But growth strategies should consider how a store presence can follow online presence – not only to bolster online spending but also to secure customer loyalty. It’s essential to make sure that your POS solution can go to all the same places as your e-commerce solution.

While this guidance might seem like common sense, it’s important not to overlook scalability when caught up in the fervor of groundbreaking new tech.

A final reminder – Your journey (like each customer) is unique

Not every retailer is ready right now for a shift from a Windows-based, fixed-till POS solution to one that is cloud-native and microservices-based and runs on mobile devices; and that’s OK.

As you evaluate your technology partners for the road ahead, identify those that can meet you where you are now and can help guide you to where you’re headed next.

 

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