Mobile Devices Are Killing The Cash Wrap
By Bob Johns, associate editor
Recently major retailers such as Urban Outfitters and JC Penney have made announcements regarding the implementation of mobile POS devices. Urban Outfitters plans to eliminate traditional POS completely and conduct all final transactions on the floor. JC Penney, meanwhile, plans to eliminate many of its cash wraps and only maintain several traditional POS terminals in each store.
As mobile devices become more prevalent with consumers, they are also taking a larger role with associates on the retail floor. Nowhere is this more visible than with mobile POS. A year ago I wrote a story on Chris Burch’s C. Wonder stores and how the company worked with Verifone’s GlobalBay to become completely cash wrap free. The mobile POS integrates directly with all store systems, rather than relying on sending information back to the traditional POS and then to the store systems. This is the future of the retail POS.
Retailers want associates out on the floor interacting with customers to create the unique retail experience and hopefully increase conversion. Capturing the sale at the point of decision can make the difference between a successful conversion and a lost sale. Additionally, an associate ringing a customer’s purchase on the floor is afforded the opportunity to make recommendations and upsell the customer while standing in front of the add-on merchandise. One apparel retailer I spoke with loves the fact that its employees can make style recommendations on the spot, right in front of the coordinating pieces. Recommendations made at a register have a historically low conversion rate. After all, who wants to leave the register to look at other merchandise when you are checking out? However, if you are buying a sweater on the sales floor, the associate can point out the skirt, shoes, and coordinating accessories where the customer is already standing. It requires little effort from both the customer and the associate.
The problem for retailers and vendors comes into play when you have to decide how to approach mobility. Startups have it easier. The customer does not already have an expectation of how the checkout procedure will take place. These retailers can choose to be completely mobile, completely traditional, or use a hybrid system without the customer’ purchase pattern being altered. However, when it comes to established retailers, eliminating the cash wrap may not be an option. We have already seen what alienating your core customer base has done to JC Penney’s stock and market share. If the company abandons the traditional POS, they further risk losing that customer base.
Established retailers may want to look at gradually eliminating cash wraps, and consolidating them into areas more central to the store. As these cash wraps are eliminated, the mobile devices must be deployed appropriately to associates who can cover the entire store. The object of the mobile POS is to be able to interact with the customer anywhere, but if the customer cannot find an associate, the entire purpose of the deployment is lost. Now the customer is wandering the store, trying to find someone to check them out, when they would normally have just gone straight to the register. With reductions in staffing, this could be a major problem for retailers.
Another aspect of mobile POS deployments is payment. Electronic payments still growing, but a majority of customers still use cash. Do retailers really want associates carrying around cash from purchases or to make change? That is a huge safety and LP risk. Retailers may have to maintain a certain number of traditional POS terminals for cash purchases, but then you run the risk of alienating those customers when they are sent somewhere else to check out.
With mobile POS deployments being cheaper to deploy than traditional systems, the appeal to retailers is strong. When you add in the ability to capture potential lost sales and add-on sales, the case for mobile becomes even stronger. Traditional POS companies are already seeing the writing on the wall and creating integrated and standalone mobile POS systems. The traditional cash wrap will not be going away completely, but the mobile POS is going to change its footprint forever.