Thursday Sep 27, 2012

Oracle Retail Mobile Point-of-Service

When most people discuss mobile in retail, they immediately go to shopping applications.  While I agree the consumer side of mobile is huge, I believe its also important to arm store associates with mobile tools.  There are around a dozen major roll-outs of mobile POS to chain retailers, and all have been successful.  This does not, however, signal the demise of traditional registers.  Retailers will adopt mobile POS slowly and reduce the number of fixed registers over time, but there's likely to be a combination of both for the foreseeable future.  Even Apple retains at least one fixed register in every store, you just have to know where to look.

The business benefits for mobile POS are pretty straightforward:

1. Faster checkout.  Walmart's CFO recently reported that for every second they shave off the average transaction time, they can potentially save $12M a year in labor.  I think its more likely that labor will be redeployed to enhance the customer experience.

2. Smarter associates.  The sales associates on the floor need the same access to information that consumers have, if not more.  They need ready access to product details, reviews, inventory, etc. to meet consumer expectations.  In a recent study, 40% of consumers said a savvy store associate can impact their final product selection more than a website.

3. Lower costs.  Mobile POS hardware (iPod touch + sled) costs about a fifth of fixed registers, not to mention the reclaimed space that can be used for product displays.

But almost all Mobile POS solutions can claim those benefits equally.  Where there's differentiation is on the technical side.  Oracle recently announced availability of the Oracle Retail Mobile Point-of-Service, and it has three big technology advantages in the market:

1. Portable. We used a popular open-source component called PhoneGap that abstracts the app from the underlying OS and hardware so that iOS, Android, and other platforms could be supported.  Further, we used Web technologies such as HTML5 and JavaScript, which are commonly known by many programmers, as opposed to ObjectiveC which is more difficult to find.  The screen can adjust to different form-factors and sizes, just like you see with browsers.  In the future when a new, zippy device gets released, retailers will have the option to move to that device more easily than if they used a native app.

2. Flexible.  Our Mobile POS is free with the Oracle Retail Point-of-Service product.  Retailers can use any combination of fixed and mobile registers, and those ratios can change as required.  Perhaps start with 1 mobile and 4 fixed per store, then transition over time to 4 mobile and 1 fixed without any additional software licenses.  Our scalable solution supports lots of combinations.

3. Consistent.  Because our Mobile POS is fully integrated to our traditional POS, the same business logic is reused.  Third-party Mobile POS solutions often handle pricing, promotions, and tax calculations separately leading to possible inconsistencies within the store.  That won't happen with Oracle's solution.

For many retailers, Mobile POS can lower costs, increase customer service, and generally enhance a consumer's in-store experience.  Apple led the way, but lots of other retailers are discovering the many benefits of adding mobile capabilities in their stores.  Just be sure to examine both the business and technology benefits so you get the most value from your solution for the longest period of time.

Friday Sep 21, 2012

Slow Start For Passbook

Like many others, I pre-ordered my iPhone 5 then downloaded iOS 6 to my antiquated iPhone 4.  I decided the downgrade in mapping capabilities was worth access to Passbook, Apple's wallet of sorts that holds loyalty cards, tickets, and coupons.  To my disappointment, Passbook didn't work.  When it goes to the iTunes Store, it can't connect.  After a little research, I read that you can change the date on the iPhone to the future (I did March 2013), and then it will connect.  A list of apps that support Passbook are shown, some of which were already on my iPhone and others that required downloading.  Even when I put the date back on "automatic," things continued to work.  Not sure why.

Anyway, even once I got into iTunes and made sure I had some of the apps downloaded, it wasn't clear what the next step was (gimme a break, its Friday afternoon).  Every time I opened Passbook, it sent me to the "Apps for Passbook" page on iTunes.  I tried downloading one of the suggested apps that I didn't already have (Walgreens).  The app's icon has a "new" stripe across the icon.  I launched it and it said it had Passbook integration.

So I needed to login or signup with the loyalty program.  After figuring out what my username and password already was, it then offered to add the loyalty card to Passbook, which I accepted.  Now when I flip over to Passbook, I can see the loyalty card there.  I guess I need to go into each app to "push" cards into Passbook.

People seem to be using it.  Twenty-four hours after iOS 6 was released, Sephora had 20,000 users of Passbook. Starbucks says they'll be integrated to Passbook by the end of the month, and Target is already offering coupons via Passbook.  After a few more retailers get on board, Apple may not need to consider NFC.

Wednesday Sep 12, 2012

No NFC for the iPhone, and here's why

I, like many others in the retail industry, was hoping the iPhone 5 would include an NFC chip that enabled a mobile wallet.  In previous postings I've discussed the possible business case and the foreshadowing of Passbook, but it wasn't meant to be.  A few weeks ago I was considering all the rumors, and it suddenly occurred to me that it wasn't in Apple's best interest to support an NFC chip.  Yes they have patents in this area, but perhaps they are more defensive than indicating new development.

Steve Jobs wanted to always win, but more importantly he didn't want others to win at his expense.  It drove him nuts that Windows was more successful than MacOS, and clearly he was bothered by Samsung and other handset manufacturers copying the iPhone.  But he was most angry at Google for their stewardship of Android.

If the iPhone 5 had an NFC chip, who would benefit most?  Google Wallet is far and away the leader in NFC-based payments via mobile phones in the US.  Even without Steve at the helm, Apple isn't going to do anything to help Google.  Plus Apple doesn't like to do things in an open way -- then they lose control.  For example, you don't see iPhones with expandable memory, replaceable batteries, or USB connectors.  Adding a standards-based NFC chip just isn't in their nature.

So I don't think Apple is holding back on the NFC chip for the 5S or 6.  It just isn't going to happen unless they can figure out how to prevent others from benefiting from it.

All the other handset manufacturers will use NFC as a differentiator, which may be enough to keep Google and Isis afloat, and of course Square and PayPal aren't betting on NFC anyway.  This isn't the end of alternative payments, its just a major speed bump.

Tuesday Sep 11, 2012

Walmart's Mobile Self-Checkout

Reuters recently reported that Walmart was testing an iPhone-based self-checkout at a store near its headquarters.  Consumers scan items as they're placed in the physical basket, then the virtual basket is transferred to an existing self-checkout station where payment is tendered.  A very solid solution, but not exactly original.

Before we go further, let's look at the possible cost savings for Walmart.  According to the article:

Pushing more shoppers to scan their own items and make payments without the help of a cashier could save Wal-Mart millions of dollars, Chief Financial Officer Charles Holley said on March 7. The company spends about $12 million in cashier wages every second at its Walmart U.S. stores.

Um, yeah. Using back-of-the-napkin math, I calculated Walmart's cashiers are making $157k per hour.  A more accurate statement would be saving $12M per year for each second saved on the average transaction time.  So if this self-checkout approach saves 2 seconds per transaction on average, Walmart would save $24M per year on labor.  Maybe.  Sometimes that savings will be used to do other tasks in the store, so it may not directly translate to less employees.

When I saw this approach demonstrated in Sweden, there were a few differences, which may or may not be in Walmart's plans.  First, the consumers were identified based on their loyalty card.  In order to offset the inevitable shrink, retailers need to save on labor but also increase basket size, typically via in-aisle promotions.  As they scan items, retailers should target promos, and that's easier to do if you know some shopping history.  Last I checked, Walmart had no loyalty program.

Second, at the self-checkout station consumers were randomly selected for an audit in which they must re-scan all the items just like you do at a typical self-checkout.  If you were found to be stealing, your ability to use the system can be revoked.  That's a tough one in the US, especially when the system goes wrong, either by mistake or by lying.  At least in my view, the Swedes are bit more trustworthy than the people of Walmart.

So while I think the idea of mobile self-checkout has merit, perhaps its not right for Walmart.

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David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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