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Letter from America: Consumer device PoS is future of shopping

America envisions the day when consumers enter the store and, using their phone or tablet, are guided to the items on their shopping list, while searching product information, comparing competitive pricing and placing selected items in their cart. Like cars on toll motorways, shoppers will pass through the self-checkout lanes without delay.

This ultimate convenient shopping method has been discussed and proclaimed as inevitable for several years because of the great benefits to both parties:

For consumers

For retailers

Movement toward this new way of shopping has already begun. Retailers have implemented mobile applications to enable consumers to: locate stores, browse and search products, buy and arrange store pick-up or delivery, share product images with friends and other conveniences. Indeed in the UK consumer are quite accustom to using store provided devices to scan items as they shop. The 'last mile' is to allow consumers to pay for in-store purchases with their mobile devices. 

Applications to do so have been piloted in America, Fetch Rewards and Express Checkout to name two. The Sainsbury’s Mobile Scan and Go pilot in UK also allows consumers to shop and pay with their mobile devices. 

American retailers, including Nordstrom, REI, and Urban Outfitters, continue to favour MPoS operated by employees because in my judgment the following four challenges must be overcome prior to mass adoption of allowing consumers to bring your own device (BYOD) to shop and pay.

There are solutions to these challenges:

Widespread implementation of RFID merchandise tags and bin/shelf label can eliminate scanning bar codes with cameras.  American retailers are rolling out RFID lead by Macy's, HBC and Target, however, the current version of RFID tags cannot be read by NFC equipped mobile devices. Good news, companies including EM Microelectronic are producing dual read tags that can be read by both NFC phones and scanners. To enable the future and avoid the need to replace RFID readers and tags, the industry should move immediately to standardise on dual read tags/chips

There are many way to address the loss prevention challenge. A simple one, is an employee doing a quick check of products in the bag/cart to the printed or digital sales check at the exit as employed by Sam’s Club for all carts. The most effective and less disruptive method for consumers is an application that compares the total weight of all items scanned by the consumer to the actual weight of the items recorded by a scale at checkout. Throughout history retailers have continually enhanced LP processes, I am confident that innovative retailers will find an acceptable solution for BYOD shopping.

Sales by weight has always required special processes and a bit of trust in the customer. In low volume sales, key entry of weight and price by the consumer into their device may be acceptable. In high volume operations where the risk of loss and customer inconvenience are substantial, a special application to communicate to an electronic scale maybe the solution.   Electronic scales can talk to the retailer's network to; find prices, suggest companion products, and even recognise the product on the scale as an apple, tomato or orange. Surely they can be programmed to communicate the price and perhaps even the product identification number to the customer's mobile device for recording the sale.  

Consumers are becoming more comfortable with mobile payments thanks to Apple Pay, PayPal and Visa Checkout. Indeed Visa reported on 24 August, that its Checkout offering now has more than six million registered users, and sign-ups have increased by more than 92% since the beginning of 2015. Data security is now the top IT priority for US retailer. New techniques and procedures are being developed that will greatly reduce data breaches and consumers are becoming less concerned knowing that the card-brands and retailers are absorbing the fraud. 

To prepare for the future of consumer BYOD shopping, retailers should begin now to implement innovative solutions to the above challenges, perhaps like Sainsbury's conduct a pilot to learn and refine new processes. Successful use of consumer devices as PoS will make happy customers and lower retailer operating costs.

Richard Mader, is president of Mader International Consulting and former executive director of the Association for Retail Technology Standards (ARTS). He writes a regular US viewpoint article, exclusively for Essential Retail.

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