The ultimate retail disruptors: Shoppers are the new POS

 

April 10, 2015 | by Chris Petersen

It's been called a lot of things in retail: the "till," the "cash box" or the "cash register." In today's digital age, the manual cash register has evolved into an electronic, scanning POS (point-of-sale) system.

Whatever it's called, the retail checkout system is based upon the decades old store-design concept that consumers come to stores to choose their goods from shelves, and then pass through checkout to pay for what they purchased. Perhaps the greatest single disruption to the retail store is the fact that consumers have literally become the "point of sale." They control where they shop, how they shop, how they pay, and where they receive their purchases. So, why do stores even need checkout lanes with "registers"?

Why this is important: Armed with smartphones, consumers have literally become the point of sale. Yet, retailers are still trying to herd them through checkout lanes. How retailers adapt to consumers as the POS is a key predictor of who will thrive.

The continuing retail rationale for POS registers and checkout lanes

The retail store is under pressure from many sides. In these days of e-commerce, the store must be highly efficient in order to remain competitive on selection and prices. One of the stalwarts of efficiency is the process of using checkout lanes with registers so the fewest number of "cashiers" can process payments from as many consumers as possible.

Electronic barcode scanning makes the process quicker, more accurate and enables an approach to "real-time" inventory management. Registers, cashiers and checkout lanes have literally become an institution of retail store design found in most stores today. Most retailers would make a strong case for why they need consumers to go through POS in a checkout lane:

• Checkout lanes enable better retail security and control;
• Theft prevention wires and sensors can be efficiently handled with central checkout;
• Stores can more efficiently process purchase transactions through enabled barcode scanning;
• Retail stock monitoring possible through electronic POS registers at checkout;
• Consumers have choice of payment, including cash currency;
• Potential for cashiers to upsell (e.g., add-on warranty with purchase);
• Efficient labor model; fewer staff needed with centralized checkout; and
• "Efficient" (?) for consumers to have centralized place to checkout and pay?

Why retailers should rip out cash registers and checkout lanes

So, in these days of remaining price competitive, what's wrong with stores using POS registers and checkout lanes? Many store operators would argue that they still work, so "don't spend money fixing something that ain't broke." The retail challenge is that POS, registers and checkout are all seen as "expenses" — the retail store costs of conducting a sales transaction. So, the goal has been to reduce these expenses to the lowest common denominator.

While the centralized checkout lanes may be a highly efficient system for the stores, what is the actual cost in terms of lost sales? How many consumers abandon shopping carts because they don't want to wait in line — especially during peak holiday periods? What is the cost of in terms of consumer experience and satisfaction, when customers are herded into checkout lines to literally stand and idly wait for the "privilege" of being scanned to check out? And, while standing in line for an indeterminate amount of time, how many of these bored "potential" customers whip out their smartphones to make an online purchase, so that can get out of checkout lane hell?

There are a multitude of reasons why retailers can, and should, rip out POS registers and checkout lanes in stores:

• Checkout lanes take up considerable floor space;
• Security and theft prevention could remain in place with sensor scan at exit door;
• Cashiers could be redeployed as associates helping consumers on the floor;
• There are a multitude of portable POS devices allowing checkout in the aisle;
• Associates can check out consumers in aisle with smartphone and card reader;
• Consumers could even checkout/purchase on their own smartphones with an app;
• Electronic receipts can be emailed to consumer, or printed at portable printers;
• Portable POS devices can still scan barcodes and QR codes for price and inventory;
• More sales might result if purchases were made in the aisle while looking at products;
• How many consumers these days want to/need to pay in cash?

Today's consumer has in fact become their own POS

Today's consumer does NOT need a store to shop or make a purchase. They literally have become their own "point of sale" using their own preferred device. Whether from a computer at home, or via their smartphone, the consumer can independently decide where to purchase, how much they are willing to pay, how to pay, whether they would like to ship to their home or pick up in store.

The consumer is now the point of sale — not the retail store or website! Today's "cash register" is literally a mobile device and an app. Cash is now "digital."

So, why do stores need a POS register and checkout lane? Great question! Today's stores are a reflection of historical baggage and a retailer mindset of efficiency and control. POS registers and checkout lanes are retailer-centric, not consumer-, experience- or satisfaction-focused. In fact, checkout lanes may be the single greatest threat to differentiating store experience and growing profitable sales.

Consumer as the POS already in practice — Apple stores

Removing the cash registers and checkout lanes is not some wild theory. It is alive and thriving in Apple stores today. In fact, it has been for several years. Associates are equipped with iPhones with card readers. They can literally enable consumers as a POS sale as they are making purchase decisions right where they are standing in store.

In Apple stores, consumers don't queue up; the POS follows them around the store!

Apple of course isn't the only retailer today focused on the consumer as POS. John Lewis is another great example of an omnichannel retailer enabling consumer mobile shopping and purchase anywhere in the store. The major department stores in U.S. also are heavily focused on enabling mobile POS, even though they retain some "registers" and checkout stations.

Greatest predictor for store survival might be absence of checkout lanes

One could argue that removing POS registers and checkout lanes will not work in a store like Walmart. Really? Why not? Especially with the introduction of RFID tags, there could no longer be a need to scan individual items at checkout -- the whole cart can be scanned at once. RFID could also establish an added layer of theft prevention and security.

What retailers have not yet realized is that it will NOT be their choice to make — it will be today's empowered omnichannel consumer who will decide.

Retail store survival will NOT depend upon controlling costs. It will depend upon providing an experience that is consumer-centric and adds value to the customer first and foremost. The best place to start redesigning the profitable store of the future will be to rip out the registers and checkout lanes.