This week is the gathering of the National Retail Federation in New York City. This venerable organization began over 100 years ago, at a time when cash registers were not electric and there were no bar codes or other methods of automated inventory tracking. Retail has come a long way, but it seems about to change radically.
Retail EVERYWHERE – this is the battle cry of the new retail republic - unhinged, unhitched, untethered, mobility, transactions everywhere and anywhere, and it is reflected at the NRF Show this week.
In a sense, the Point-of-sale is no longer at the counter - but everywhere in AND out of the store – from the counter, to the aisle. Even in the consumers hands, in the shape of increasingly functional smartphone apps that will allow the consumer to book his own orders, schedule his own deliveries and even arrange his own financing if needed.
This software is going to take market share away from existing providers, but at the same time, these new apps will create new POS niches. The knife cuts both ways.
Other changes continuing or coming in the retail space;
- More items are being sold by vending machines, even $500 tablets can be purchased in this manner. It’s cheap to operate, high sales PSF, secure, works 24/7, doesn’t call in sick.
- More new companies popping up than I can remember in any one year - in the retail/payment processing/business automation space. This includes companies crossing the pond from Europe, the UK, and China.
- New Point of sale software for handheld apps, and tablets unlock value in new and compelling ways.
- Tablets, tablets, tablets – why buy a clunky old 100lb POS station, that consumes gobs of electricity for the point of sale when you can have a wireless tablet? Heck, you can now buy five tablets for the cost of one tricked out old POS station.
- Mobile loyalty programs, which have had fits and starts , will become a new holy grail. And perhaps Facebook will be the company that grows or stitches together the first hundred million member and then billion member loyalty program. A few centi-millionaires will likely be minted in the process as someone gets acquired.
- Tentative, emergent beginnings with QR codes have unveiled poor and mediocre practices. Watch for a resurgence this year as companies finally figure out how to connect with consumers through their smartphones.
- Value Added Resellers in the POS space - will need to add value in new ways. Plugging USB printers into a cash register base doesn't quite qualify as a skill anymore.
- Ecommerce vendors of bar codes and equipment will increase their market share but the space will become increasingly crowded.
- Major manufacturers of bar code equipment will trim their product lines for the retail space. Price will be key as the technology moves to a new level of commoditization.
Lastly - hats off to Jack Dorsey and Square for bringing payment processing into the 21st century and establishing a flat rate and quick sign up instead of a myriad of fees, paperwork and snarky little charges. My biggest fear for 2012? Square will be bought and then destroyed (or re-molded into an inferior product with new types of fees.) The recent investment by Sir Richard Branson is a good sign that the company may remain independent. Either way, the train has clearly left the payment station, so positive things for merchants may yet prevail. The fledgling industry should not underestimate the big boys though - in the words of Dostoevsky, “they are slow to harness but then they move very quickly.” I’d bet there is much a-brewing in their labs - or the offices of their K-street lobbyists.
In summary – the retail industry is on fire with new technology and new innovations. There’s plenty of room for winners and losers as the old is thrust aside. No room for the timid, more than a few companies are going to have their lunch eaten. Is your company on the move? Saddle up or get out of the way!
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