There are mobile point-of-sale systems, mobile payment tools, even hybrid payment solutions. Here are some ideas for finding the best system for your SMB.
By Renee Morad
Retailers that thrive in today’s economy often share common attributes, such as inviting storefronts and friendly customer service. But there’s a technology tool that can play a quiet but big role behind the scenes in an SMB’s success: their payment system.
While there’s no “one size fits all” approach to payment solutions, retailers today can choose between a more traditional fixed point-of-sale (POS) system, a mobile payment system, or a hybrid solution that incorporates both types of technology. Not only can many of these solutions facilitate speedy and intuitive purchase transactions, but they’re also capable of tracking inventory and returns, providing up-to-date product information and customer purchasing history, bolstering security, and more.
Retailers are increasingly drawn to mobile payment systems, consultants say. “Almost every retailer is evaluating mobile payments now for one function or another, and the software vendors are all going there as well,” says Perry Kramer, vice president and practice lead for independent consulting firm Boston Retail Partners (BRP).
However, when it comes to choosing the right system, it comes down to your company’s needs and goals. A recent survey conducted by BRP reveals that the biggest priority for retailers regarding payments is security, with 63% of respondents listing it as their top concern, followed by real-time retail, which involves personalizing the shopping experience by analyzing customers’ purchasing history and preferences, at 44%.
Here’s a closer look at payment options, along with guidance on how to decide which option will best fit your company’s needs:
Fixed point-of-sale (POS)
Traditional fixed point-of-sale (POS) systems have gotten an upgrade in recent years, transforming from bulky devices to all-in-one solutions that are highly customizable with the latest processor technologies and storage options, touchscreen functions and more. There are also customer-facing models that have a sleek design and can be mounted on a counter, in a kiosk, or even on the wall.
A key advantage for this type of payment system is its durability and longer lifecycle. If you’re looking to make a higher upfront investment for a product that will last longer, a fixed POS could be the way to go.
A fixed POS is also frequently relied on to manage the front of the store to the back, retaining information such as inventory and customer purchasing history, and offering encrypted data during credit-card transactions for increased security, to name a few features.
“For a small business with high-volume sales, a stationary register makes sense,” Kramer says. “If there’s a small staff, fixed POS could be the way to go since you don’t have many sales associates roaming the floor with mobile payment systems.”
Kramer emphasizes that these fixed POS systems can still support some of the most current technologies, such as payments via a customer’s smartphone or with chip-embedded credit cards. Even though they’re stationary, they’re still keeping pace with the most recent innovations—and as technologies evolve, a software upgrade can keep retailers in sync with the most recent trends.
Mobile payment systems
Retail consultants agree that mobile payment systems are the wave of the future. Many sales associates today engage customers on the floor with mobile devices that provide product information at their fingertips, as well as the ability to check other store locations to see whether an item is in stock, retain customer purchasing data and complete purchasing transactions with a credit card, chip-based credit card, or smartphone. They can also email or print receipts.
Kramer says this type of payment system also facilitates the “endless aisle” concept, meaning desired items can be pulled from behind the sales floor, from a remote warehouse or even from an e-commerce site. It also helps retailers more easily track personas, since associates, at a moment’s notice, can pull up whether a customer is, say, a soccer mom or a single 50-year-old with a flair for sophistication.
While this system is the preferred method for strengthening and personalizing the shopping experience, it also comes with drawbacks. For starters, some of the mobile payment systems lag behind when it comes to back-end functions, such as tracking inventory and returns to vendors, and receiving and shipping.
There’s also battery life to consider: Many of these mobile devices need to be charged every four to six hours, so stores often have to buy back-up devices. Furthermore, although they come with security features to protect customers’ personal data, there’s also the risk that these mobile devices can easily go missing.
However, by enhancing the shopping experience, mobile payment systems can help boost a company’s customer-retention rate—and bottom line.
Hybrid payment solutions
For companies that aren’t completely satisfied with the offerings of a fixed POS or a mobile payment system, there’s also the option to create a hybrid system by choosing a fixed POS and mobile counterparts to work in unison.
This is an especially attractive solution for companies that are seasonal or have pop-up sales and discounts. On very busy, high-traffic days, sales associates can use their mobile payment devices to get customers moving in and out, but on slower days, management can cut back on the expense of extra employees and rely solely on their fixed POS.
For some retailers, this provides the best of both worlds—for an added cost, of course.
Kramer emphasizes that while there are several options available, all types of payment systems aim to address the most important retail concerns, from security and real-time retail data to ease-of-use and support. As a result, be sure that you’re just as comfortable with the vendor and all of its offerings as you are with the type of system you’re purchasing. Here are some questions to ask, regardless of whether you’re leaning toward a fixed POS, mobile or a hybrid solution:
- How well will the system protect my data and my customers’ data?
- Does the system have the ability to grow with my business?
- Can the technology evolve as the retail industry evolves?
- Can I use the system remotely?
- What kind of support is offered?
- Which behind-the-scenes functions can this payment system complete?
- What’s the expected lifecycle of the product?
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