As more consumers begin to adopt smartphones, a shift in retail point of sale (POS) hardware is approaching. Self-checkout – the proposed “checkout of the future” back at the turn of the 21-century – has fallen by the wayside and lost a bit of its popularity. Instead, smartphones may replace self-checkout with the promise to provide both consumers and retailers an improved retail experience.
Smartphones can help become the new platform for POS software because the retail checkout model is outdated. Because of the Internet and e-commerce shopping experiences, consumers now expect to be able to shop in the store like they do online – that means access to product reviews and comparisons, user accounts, and a simple, seamless checkout experience when the consumer chooses the rate at which he browses and completes their purchases.
Smartphones can potentially help usher in the new stage of physical retail. There are two general models that smartphones can act as a replacement for traditional point of sale hardware systems:
(1) The NFC Model. This model involves radio frequency identification (RFID) chips in both smartphones and stores. With RFID technology, cell phones can communicate via near field communication (NFC) and create new and innovative ways for customers and the retail store to interact in additional ways than with the traditional checkout, such as instant reward programs and loyalty coupons. In an NFC Model, retailers would replace all barcodes with NFC tags, and retailers could provide the application free for customers to download. Two main factors holding back this model are high RFID chip costs and the lack of smartphones that are NFC-capable. Popular applications of this model could be high-end grocery stores, to start.
(2) The Apple Retail Model. Unlike the NFC Model, this is ready to be implemented by most retailers today. Retailers could provide employees with smartphone devices with POS software already installed. These employees would act as both floor representatives and checkout operators, requiring additional training for most traditional retail employees. RFID tags could be implemented into products packaging to monitor product movement throughout the store. This model would work best in retail environments that have a low number of sales but are high volume – much like Apple Retail stores.
It will be interesting to see if J.C. Penney – with Apple Retail’s Ron Johnson set to take over – leads the way in retail innovation this next decade. Will they do it via smartphones? Hard to say, but it wouldn’t be surprising in the least.