Money-go-round

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Point of Sale (POS) has moved a long way with the capabilities of technology. Even over the past couple of years we have seen many developments; for example, those geared towards mobility solutions taking the point of sale to the customer, rather than the other way round where people have to queue in line to be served. Agilysys handheld offering mPOS, for example, means the point of sale can be brought to the consumer; taking an order from individuals where they are in their comfort environment; table side in a restaurant or next to a spa pool in a resort, etc. Adrian Burns, senior vice president & general manager at Agilysys, elaborated on the benefits: As well as making it easier for customers to spend money, this also makes it easier for operators; because rather than having a lot of staff waiting for any particular rush in a stadium environment at half time, for example they can spread out the time window and better manage the flow of customers. This also means they can potentially reduce staff numbers even though theyre providing a better customer service. Burns added that this type of mobile payment approach has produced a healthy new revenue stream for Agilysis and its partners at YesPay.

Convergence

Andy Reason, UK sales director at Handpoint, also points to the convergence of technology, particularly in the mobile POS space, as one of the biggest recent developments. Its the coming together of PDAs and payment devices two totally different industries and were seeing manufacturers for both these industries coming into this space from different directions, he said. You see it with mobile phones and the things they can do these days. According to Mark Tailsford, UK managing director for Nordic ID a partner of Episys   the mobilisation of POS without the traditional, onerous task of cabling for data and power offers retailers the opportunity to combine POS on a handheld; reducing the cost of hardware and its support.

And what of kiosk technology? In terms of the UK and mainland Europe, Richard White, commercial director at MaxBox Digital Retail, believes the two biggest leaps forward that have fueled recent kiosk sales growth are fast broadband making it possible to deploy truly managed kiosk solutions and a general level of acceptance of kiosks by, A, the using public and, B, MaxBoxs client outlets. However, the UK and Europe have definitely lagged behind the US in terms of kiosk acceptance, and the notion of touching a screen to order goods, added White. I think thats been driven a lot by the transport industry. People have got used to interacting with touch-screen kiosks to buy tickets and get boarding cards, and this has led to a more general acceptance of kiosks as a means of providing services and improving customer service as well.

Steve Haydon, divisional director, hospitality, at Clarity Commerce Solutions, is starting to see a move away from resistive screens towards glass screens. In a hospitality environment this can be beneficial, especially if staff use things like pens to register orders on screen, he said. Haydon also observes more users wanting to be greener and more energy efficient. For example, there are a lot of people wanting to be being able to put their systems in deep sleep overnight to reduce the level of energy consumed, he explained. In addition, he points out that there has been a move towards more solid-state technology. Users are realising that, while they might be getting less failures than they probably did with older less reliable hardware, theyre still keen to remove remaining points of possible failure. And going solid state is one good way of helping to achieve this aim; by reducing internal temperatures, etc.

PC and POS

In addition, Haydon has witnessed users wanting to make more use of the terminals in terms of computer-based training packages. I think more people are starting to realise that it is a PC as well as a POS terminal, although sometimes this can be a disadvantage because you can see people trying to load up internet screens and all sorts, he added. Tim Van den Branden, managing director at vendor organisation, PartnerTech UK, makes the point that, particularly in the current economic climate, price has become an even more important factor, as has the support and the warranty that comes with the hardware. He also believes that reliability, together with a small form factor, is becoming increasingly critical in the eyes of the end user.

Have end-user requirements changed in recent times, and how are VARs and vendors going about satisfying these requirements? Reason has observed that end users are increasingly looking for flexibility and value for money. In terms of flexibility, they are looking to multi-task by using devices for more than one thing thats the biggest requirement weve been aware of recently, he said. According to White, it is always important to look to bring value-added benefit to the end user through product innovation. At MaxBox, for example, were about to launch what we consider to be a new killer application watch this space; but by and large its all about improving customer service and generating incremental revenue these are the two key mantras of the business, he said. You can either deliver value by service or you can deliver value by incremental revenue streams. And if you can offer this at relatively low cost which, compared to relying on people, a kiosk solution can do then its a win-win situation all round.

As far as the UKs concerned, MaxBox has engaged with a number of companies in retail and service. However, White points out that a lot of kiosk development work has been put on hold by many of these firms, while the Americans are doing exactly the opposite. So, the main thrust of MaxBoxs work currently is in the US and the Middle East, he explains. In the Middle East, its in support of infrastructure-type projects, so we supply kiosks for people to be able to pay utility bills and so on. And because there is a very large migrant population particularly in the United Arab Emirates who dont have bank accounts, they require a means of settling payments without the use of a bank account. Of course, a kiosk can facilitate this.

Similarly, in the US, White highlights that fact that kiosks can improve customer service and reduce costs to the company through allowing automated routine transactions to take place. He adds that one of the main differences to be aware of in terms of alternative types of kiosk offerings currently available is that they either have a multiple application platform capable of processing a number of different types of transactions, or are single-function; only allowing the consumer to, for example, buy a boarding card or a ticket to the theatre. Tailsford stresses that it is important to be experts in all things mobile. Nordic ID itself along with its partner network that includes BT Expedite, Box Technologies, Episys and Torex has partnered with payments specialists such as Handpoint and STS to make the adoption of fully accredited mobile payments a reality.

What do our commentators consider to be some of the current most buoyant and weaker market verticals? Burns comments that his companys main vertical sector focuses are hotels, gaming/casinos, stadiums & arenas, cruise lines and food service. The upcoming sectors within this group are very much stadiums & arenas, he said. Typically, there are large venues with large audiences or spectators spending money on a pint or a burger, and that money has often just been thrown in a box on the floor waiting for someone get round to counting it. Some stadiums have moved on to cash registers, but what we have now is the ability to take an enterprise point-of-sale system to that venue.

Real-time data access

Burns emphasised that these venues are increasingly realising the value of putting in a true enterprise-class POS system. It gives them greater access to real-time data, they can control their stock levels better, they can better control cash shrinkage and they can allow customers to spend the money they intended to spend but without the need to queue up and potentially even give up hope of being served at all, he remarked. So, things such as customer pre-orders in these sectors have worked very well, where prior to an event or even prior to half-time you can order what you might want to buy. Burns also points out that the cruise line business is going through somewhat of a resurgence of popularity at the moment. This means that there is a lot of what could be described as floating hotels that are being commissioned and built around the world a good market for our solutions.

Haydon reflects that all market verticals have their strengths and weaknesses. In our experience, hospitality was a later adopter of EPOS and therefore, because of the investment cycles of some of the larger companies, companies in this vertical are still likely to be using first- or second-generation EPOS systems and coming to the point where PCI Compliance is an issue, he said. So, they are going to have to change their applications and their hardware because they are beyond end of lifecyle. Basically, you have market verticals that are having to invest because that then effectively keeps them cost-neutral, and you have others that are starting to grasp the benefits of the technology. The ticketing environment is, more and more, understanding the technology in terms of how you interact with a customer, providing as many channels of sale as possible; whether its for travel, cinema, music, etc. Theyre all looking for new ways to take money rather than expecting customers to queue up and pay through a screen.

Away from the hardware, Haydon is seeing a lot of take up of gift cards, stored value and loyalty schemes. So, there is a lot of discussion around how you keep your customers and get them to spend a bit more, he remarked. Then, there are other sectors within hospitality that need to implement a centralised EPOS solution in order to reduce, for example, losses and fraud within the business. Its similar as the retail sector looking at RFID for high-value products. As you see the cost of RFID coming down youre seeing more products being tagged.

Tailsford comments that convenience store retailers such as CostCutter, Londis, Premier Retail, NisaToday and Spar are enjoying a renaissance as customers are reminded of the value in availability, convenience and a lesser reliance on a weekly/monthly shop. He added that other good-value retailers such as Poundland, Home Bargain, Wilkinsons are also benefiting. Clearly, the fashion sector faces challenges to convince us all to spend on non-essential items, he said, but I think that with a greater level of communication (for example, proximity marketing via a Bluetooth link while in-store), potential customers will feel more able to spend intelligently.

Taking the product to the customer

Reason points out that his company has been doing a trial with Argos since October/November last year, where this technology has been used in store for queue management. And Argos has now seen that they can do this as a way to take the product out to the customer, he said. In fact, at the recent Isle of Wight Festival, they moved a store from town to a car showroom forecourt area where a couple of articulated lorries had a number of mobile payment devices in order to take the store to the customers for things such as camping equipment, sleeping bags and cold-weather clothing.

Van den Branden points out that his companys range has enjoyed an increasing uptake in the hospitality market; now about 75 per cent of its sales, with 20 per cent being retail and the other 5 per cent taken up in other verticals. We deal with a lot of medium- to large-size hospitality chains in the UK there are a number of small pub traders that are struggling, and some independent hospitality traders are not doing very well at the moment because of lack of credit available from the banks, he said. However, when you look at the step up, the inner city pubs and inner city restaurants still seem to be doing fairly well. 

In terms of obtaining systems and services from suppliers, Reasons underlying philosophy is to source from several solutions vendors and try to be as hardware-agnostic as possible. Having said that, in the UK at the moment there is only two devices that are currently approved for what we do the Fujitsu B-Pad and Korean company ITWells XPDA-V; but there will be more and I know there are many manufacturers that are currently working on solutions, having got through that cutting-edge new-technology stage and moving towards standard product. And with the bigger players coming into the mobile POS market, you know this technology is becoming mainstream.

Pre-sales value-add

In terms of added-value service that VARs/suppliers are, or should be, providing to the end-user, Burns believes that pre-sales information, regardless of whether it goes on to become an actual sale, is very much a value add for a customer. This, he maintains, is because the potential client gets access to free consultancy, which could potentially translate into operational changes within the business that realise greater gains than just the actual POS or kiosk system itself. This is because we see an awful lot more outlets than theyre ever going to see, said Burns. They might operate five or six outlets throughout their life, whereas we might see five or six in any one week. So were able to bring a lot of this best-practice advice to the fore. Also, some of the latest technology can come along as a value-add, whilst it might not be something that were providing. For example, a simple interface for a hotel from their reservation system to something such as lastminute.com could increase their reservations by, say, 30 per cent. We dont sell lastminute.com, but its just that added-value advice to say we can do this; we could host it for you so were hosting that e.marketing service, then you launch it out into, for example, ebookers or lastminute.com. Tailsford comments that the companys Technical Courier and Full Engineer services can be adopted to ensure a swift and seamless solution to any in-store technological problems. Early adoptors of these Nordic ID services include WH Smith and Martin McColls.

Reason again stresses that it is all about flexibility in terms of how a provider works. Weve had to do a lot of work over the past two or three years to overcome some of the barriers to actually putting solutions like this in place, he said. There are so many POS back-office systems etc. that integration into these can be a nightmare. Therefore, weve had to come up with some innovative ways of being able to implement a mobile solution without requiring companies to either change their back-office system or their EFT capable client devices, and this has taken quite a bit of out-of-the-box thinking. Were prepared to try different things and be innovative to try and get the business and supply users with the systems they require rather than being dogmatic about it and saying this is the way we do it, so you must do things out way. I think that thats been the biggest success weve had. Also, because were a reasonably small company, we are actually quite fleet of foot and can change direction quite quickly.

White makes the point that MaxBox always looks to source from reasonably local manufactures. In this way, its easier to guarantee support, service and effective warranty cover to our clients, he said. In terms of distribution, MaxBox sets up distribution agreements with regional people who have an infrastructure already in place, so they can manage the distribution and the technical support when required. We have partners in the Middle East and the US and are currently in negotiations for a distributor in the Far East, said White. We can train them as far as kiosks are concerned, but they need to have the people on the ground to really make it work.

In terms of partners that help the suppliers to put a total solution forward to the end customer, Burns values a pre-configuration service highly. For example, the YesPay terminal goes out with the capability of integrating with our POS, and the POS terminals go out pre-configured with our application loaded on them, so these types of benefits are what we look for in our partners, he said. As regards other partner benefits, Burns points out that IBM Global Finance can provide finance when required. Weve used this in the past; basically, if it helps ease the burden of our sale, then its useful for us, he remarked. And on the technical knowledge front, Burns comments that Agilysys has a good level of technical know how in-house, but recognises that it is always useful to be able to back this up with partner knowledge and experience. Then, on the sales front, Burns explains that Agilysys is always looking for co-funding for marketing projects. Whilst this helps sell our solutions, it also helps sell their solutions as well, he said.

In addition to hardware supply, Tailsford points out that the company likes to take a total responsibility for its implementation and support. Our equipment is not sold as a fashion statement and therefore we see no reason why our customers cannot utilise the equipment for ten years rather than re-purchase after three to five years Faith Shoes, Hobbycraft and Dobbies are examples of this, he said.

Partnership

Van den Branden explains that PartnerTech UKs distributor Varlink has grown its business very rapidly over the past three or four years, and now has a very strong UK presence in the auto-ID market. For us, about 80 per cent of the time there is an overlap of customers between hospitality and auto-ID, so I think having a partnership with Varlink to get that crossover between the auto-ID products and the POS market just right will put us in a very strong position.

And what of system differentiators? Reason believes that things are pretty much the same as far as hardware is concerned, because the requirements are very much the same. Software-wise, he recognises that there are subtle differences. I think thats becoming almost industry-focused so there are fashion software solutions, with size variations, etc., he said. But, at the back of it, everythings pretty much the same. I think its just that things are slightly different at the POS application sharp end where you actually identify the product. They are coming closer and more and more applications have modules that can cope across solutions.

Reason added that Handpoint recently worked with one of its partners, K3, on a solution for a major customer where Handpoint handled the mobile point of sale, K3 did the POS and back-office work and within the total solution an advanced promotions module was included. Now, the same promotions can be applied; whether on a mobile, at a fixed point of sale, on the internet or mail-order, he said. Its all about adopting a global approach, covering every way companies can approach their customer. So when a customer approaches you, no matter which way they come in theyre going to be able to get the same deals.

On the development front, Van den Branden reflects that, up to twelve months ago, most POS systems tended to be very standard 15 screen size. The specifications were alike but maybe with a slight tweaking of the process speed; however, many systems looked similar and were designed around the same grade, he said. Last Summer, PartnerTech launched an all-in-one terminal, which has an integrated printer, integrated card reader, integrated customer display, all in a small compact box. This product has really helped us grow our business.

The next step

And how is this technology space going to develop in the near future? Burns again makes the point that it is all about making life simpler for the consumer. In this regard, he believes that RFID enablement/payment will become more prevalent. Weve always been waiting for a generic payment device; we have, of course, had one for thousands of years cash and everyones been happy to use this because most people have been able to have access to it. Then there were cheque books and the market therefore became more fragmented. Then we had debit cards and all types of credit card, so were now waiting for the next step. I think this is going to be RFID, and cash that we carry around in our mobile phone. This is because the number of people that have mobile phones now means they can be a generic payment device and something that most people have access to. Once we have an RFID chip in a mobile phone, then we can make a straightforward deduction from a bank account, similar to the way we take cash. 

In the retail sector, Van den Branden also references RFID, anticipating that stores will more towards self-checkout, but not just the traditional self-checkout at the end of the store. What people are looking at now is RFID logging or scanning items as customers put them into their shopping trolley, so all they do at the till is pay, he said. This may be quite a few years away, but people have been talking about this for quite some time. Within hospitality, were seeing the same as well. POS terminals are becoming used less and less in places such as restaurants, as the trend for taking orders at the table via an auto-ID payment device at the table becomes more popular.

From Whites perspective, there is generally a fairly good pace of development going on in the kiosk world at the moment, but its more evolution than revolution, he said. There are more and more applications, music downloads, movie downloads, etc., and the new application that were about to launch will likely have a big impact, in our view. Tailsford believes Multiple Wireless Network Adoption (MWNA) will become more prevalent. Retailers need more than just a common Wi-Fi backbone, he commented.

Reason believes the use of mobile phones is going to get bigger and bigger, with ways of making smaller payments on phones. For example, I was able to buy a coffee the other day with my phone, and I think the smaller under 20 purchases by phone are going to become much more common, he remarked. Mobile in all its forms will continue to develop. Within the store, the ability to be flexible and move around and deploy tools as and when theyre required will become more commonplace; taking the same device and being able to do more than one job. I recently had a discussion with a retailer that had fixed till points, although 60 per cent of the time not all of them are used. But this capacity needs to be there to cope with peak buying periods, so their thought process was what if they combined their stocktaking and goods-in devices when theyre not being used, and fix them in a till position during peak periods. So, with money being tight at the moment, I think more and more companies are going look at how they could re-use their hardware, while the hardware manufacturers are going to move increasingly towards multi-tasking devices.