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The Death of Retail POS Terminals

2011 August 5
by David Eads
Smartphones and tablets are killing the Point-of-Sale (POS) terminal

Mobile will kill the dedicated Point-of-Sale terminal

The retail point-of-sale (POS) terminal as we know it is going away and may take some POS providers with it.

Smartphones and tablets are poised to fundamentally change the bricks-and-mortar checkout experience. Apple created this trend at the dawn of the iPhone age, when they gave associates iPod Touch devices with a credit card magstripe reader case. Sales associates help customers wherever they are and close the deal on the sales floor instead of making customers line up in queues and patiently wait like livestock. Nordstrom has also untethered associates with a customized mobile device.

Retailers are struggling with a number of converging trends. Multichannel shopping is creating challenges in measuring performance in any one channel. Mobile payments and NFC technology are creating pressure to upgrade POS equipment while there’s considerable uncertainty about which technology is required. Mobile commerce and location-based services are growing dramatically and are impacting sales and shopping behavior in every channel.

Retailers can solve many of these phones with smartphones or tablets. Retailers can build their mobile shopping applications to be the same application as the associate checkout application. Retailers can measure sales regardless of whether the user checks out online, on their device in the store, or by an associate using a device. Shopping and purchasing can happen across all the channels while reducing the number of systems retailers have to maintain and simplifying the process for consumers.

Retailers can remove expensive checkout fixtures and reclaim lost floor space. Exit greeters can ensure shoppers have paid for their purchases as in the current Costco model. Retailers will also likely spend far less on POS hardware while enabling cashiers to spend more time as true sales associates which can increase sales and reduce shrinkage.

The transition will take years but is already underway.

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