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Can Amazon take mobile PoS market by storm?

This story was originally published in Planet Retail's IT & Supply Chain newsletter on Thursday 6 February.

To offer consumers a seamless shopping experience, leading retailers have begun equipping their store associates with mobile point of sale (PoS) systems. These allow them to help customers check out on the spot, sparing them the tedium of long checkout queues. The handhelds also enable employees to source product details, compare prices online and access information regarding a shopper’s preferences and purchase history. They can also function as mobile kiosk systems to allow customers to shop from a much greater product range. The assistant can then easily order the item chosen and arrange for it to be delivered to the store or the customer’s home.

In line with this trend, many solution providers at this year’s NRF Big Show in New York presented self-developed or adapted mobile PoS systems to the retail industry’s movers and shakers. This week, we also discovered that Amazon intends to enhance its popular Kindle Fire tablets with credit card readers and – in combination with services such as data analysis – offer the devices as checkout options to bricks and mortar retailers as of this summer.

It makes complete sense for the online giant to be eager to grab a share of the burgeoning mobile PoS business, even more so as it has a strong desire to establish its Amazon payment services in physical stores. However, whether such a strategy can be successful is open to debate.

First and foremost, numerous retailers perceive Amazon as an actual or potential principal competitor and a major business threat. It is therefore questionable how many operations would be willing to allow such a company access to their crucial PoS transactions and its highly valuable data, particularly that related to payment.

Cost and security considerations, but also a need to maintain data control, has been a driver for several retailers to develop their own payment schemes, such as the MCX initiative in the US or Germany-based Otto Group’s Yapital.

But even if enough small and medium-sized operations, which are most likely the intended target group, find it in their hearts to trust Amazon’s services, there are further hurdles to overcome for the company to be accepted as a PoS systems provider. Unlike standard consumer products, professional mobile PoS systems need to be able to withstand the daily strain in a retail environment.

Specialist solution providers have developed their products in ways that they become what they call retail-hardened. For Apple's iPad, a number of accessories making it suitable for retail use have come on to the market. These include rugged frames or housings and professional scanners as well as card readers and payment terminals.

To fully integrate a mobile PoS into the store environment, it requires a docking station that allows to securely place it on a desktop when not in use or to flexibly use it as a fixed till connected to printer and cash drawer.

Last but not least, it should ideally be running the same PoS software as other store hardware as most retailers will be using a mix of fixed and portable stations. Today, the Kindle Fire, although part of the Android family, can still be viewed as a closed ecosystem.

Taking all these concerns into account, it will be interesting to watch Amazon’s efforts to enter the in-store technology space. Given the capabilities of the company, it may well be successful against all the odds. The online giant so far has been persistent in its endeavours to conquer new business areas and shows no sign of reducing its efforts any time soon.

Planet Retail will be exhibiting on stand 277 at RBTE 2014.

In addition, Helen Slaven, managing director of Planet Retail, will be presenting a session on 'Global Trends & Forecasts 2014 – Drivers of Change in International Retail' as part of the RBTE 2014 conference programme.