1. POS technology continues to evolve, and is becoming more affordable, intelligent, and ingrained into core business operations. How do you see the evolution of cloud based POS? What are the major challenges involved in its implementation?
Cloud based POS, as you have mentioned, is defiantly an evolving technology that has created good interest in certain verticals and geography as it offers a few tangible advantages:
With the pros of Cloud POS, one can’t overlook the cons of the same:
Similarly if a retailer’s expansion plans includes multi-verticals the requirements can be diverse. Brands within the same vertical behave differently depending on their product type, target segment, sales strategy and more. To demonstrate this with an example, let’s look at two non-competing fashion and lifestyle brands – H&M and Pantaloons. While H&M is a niche fashion brand targeting mid-high income groups with selective merchandise, Pantaloons is for masses with volume sales. Such variations from same vertical may demand different functionalities from a POS solution including the ability to handle complex promotions, larger/diverse basket size, integration with private wallet or loyalty programs etc. Hence, when a CTO/CIO is evaluating investing into critical technologies like store management platform, evaluation criteria should keep future growth plans in mind.
Being retail solution veterans for more than 20 years, our recommendation for retailers is to review their 3-5 years growth plan and pick the right technology that suits their business needs. Hybrid technology framework can be an option for the next three years in order to build capability to deal with current vulnerabilities while allowing the cloud-only POS market to mature for upcoming trends.
2. How do you see the adoption of mobile wallets in POS systems? To what extent will it affect the cards payment market?
Demonetization in India has given a big boost to adoption of mobile wallets (PayTM, MobiKwik, PhonePe and more) – to the extent that is has crossed the four critical components (Originally discussed in IPSOS Group report “Mobile POS: Moving the Needle in Mobile Payments”) required for consumer adoption of Mobile Payments applications:
Our internal survey of retailers indicates that both in India and Africa, wallet adoption is gaining a larger share of POS payment method in these geographies where the penetration of credit cards has traditionally been lower to start with. Global Data’s survey also reflects that the share of cash payment in total e-commerce transaction value declined from 31% in 2013 to 16% in 2017, and cards dropped from 38% to 32% whereas the mobile wallet share jumped from just 7% to 29% during the same period.
It is evident that the consumers are not only benefiting from convenient payment option but also the wallet provider promotions are helping the adoption. A retailer is also benefiting from this trend. As compared to credit card transaction costs, the wallet payment processing costs are lower too.
Mobile Wallet as a payment option is definitely here to stay. In fact, in certain geographies, we might even find large retailers launching closed (private) wallet in addition to using 3rd party ones.
3. How can the data collected from POS systems be analyzed to increase sales and levels of customer service?
Smart POS is capable of doing more than just the recording of sales transactions. The details about customers that could be collected include customer name, address and contact information and preferred payment method —whether it’s through cash, credit card, debit card, wallet, or other payment methods. Our Data science team are creating Retail specific Machine Learning framework to analyze these in combination with data available from other channels, sources like social media, sales history, supply chain, past campaigns, survey data that is linked via SMS/email address etc to create a 360 degree profile of a customer. This extremely rich information can be leveraged to increase customer engagements and sales.
Today there are 9x9 data dimensions that AI tools can analyze in various combinations to create customer engagements that can lead to increase in both top and bottom-line. Going forward, we anticipate adding various IOT based store sensors to further enhance customer experience.
9X9 Data points for AI (Combine, Create, Implement, Delight)
4. How is artificial intelligence going to influence POS?
Retail, like most other industries is becoming an information data mine and so AI is going to be a key technology that would be required to analyze all the information collected and to extract actionable insights that translate into more clicks/footfalls and ultimately more revenue.
Some of our initiatives with regard to the application of AI and Machine Learning to enhance retail experience are:
5. Where do you see this market in the near future?
Retail is one of the fastest growing industries in India and contributes massively to the Indian growth story. By 2020, the industry is expected to reach the $1.1 trillion mark, and right now contributes 10% to the country’s overall GDP.
In today’s retail market in India, we see some interesting developments:
249, Udyog Vihar, Phase - IV, Gurgaon,