ROADMAP TO AN OMNICHANNEL-AWARE POS UPDATE

E-BOOK

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2ROADMAP TO AN OMNICHANNEL-AWARE POS UPDATE

TABLE OF CONTENTS

Introduction

The Five Steps To Creating A Strawman Of An Updated POS

Refine The Roadmap

Create The Implementation Plan

Conclusion: Get Started On The Path To Omnichannel-Aware POS

About Toshiba

About Retail TouchPoints

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The omnichannel world is upon us.

Consumers expect a seamless and consistent brand experience throughout the buying journey, from the laptop to the smartphone and through store checkout. Today’s advanced POS systems, along with mobile and interactive in-store technology, can bridge the gaps among all channels, working together to satisfy customer expectations.

Many retailers have aging POS systems that cannot deliver this experience and need replacement. But they hesitate to make a move for fear of locking themselves into a platform that: 1. Doesn’t play well with their efforts to centralize their IT to attain an omnichannel

environment; and 2. Restrains them from future, as-yet-unknown needs and capabilities.

The omnichannel imperative, though, requires additional features and capabilities that legacy store environments are not generally capable of providing. It’s more than possible to migrate from what’s in place today to what’s needed to deliver the brand experience you’re seeking without risking missteps. It requires a thoughtful, step-by-step approach to create the vision, define what’s in place today, identify technologies and partners and create a roadmap to bring that vision to reality.

INTRODUCTION

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The right vendor can play a critical role in helping through each of these steps, from creating a roadmap all the way through implementation, go-live and ongoing support. When looking for a vendor partner, consider one that offers the breadth, consultative approach and technology ecosystem to support your project in the short-, mid- and long-term. In RSR Research’s The Multi-Channel Retailer’s Reality in a Post-Amazon World, Benchmark Report 2012, retailers said that vendor ecosystems/partnerships that make point solution selection easier was a top-five strategy for overcoming obstacles to omnichannel retail.

This E-book outlines the three key steps to converting a POS system into an omnichannel enterprise:

I. The Five Steps To Creating A Strawman Of An Updated POS

II. Refine The Roadmap

III. Create The Implementation Plan

Vendor ecosystems/partnerships that make point solution selection easier was a top-five strategy for overcoming obstacles to omnichannel retail.

- RSR Research

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When defining what an updated POS system will look like, follow these initial five steps:

1) Determine the vision.

What is the shopping experience we are seeking to create? What do we want our in-store brand experience to be in 3, 5 and 10 years?

Technology investments are about goals, not about keeping up with retail trends. Analysts advocate vision as the starting point for establishing a roadmap to omnichannel. “RSR recommends that retailers stay focused on the total customer experience across all selling environments by first designing the Brand Experience across all channels,” according to

the research firm’s The Long Road to Adoption, 2013 Benchmark Report.

2) Select the capabilities.

Determine what is needed to execute the vision within the store environment. A core trend to keep in mind to make this vision a reality is that today’s consumer expects in-store interactions to be as natural and fluid as they are online. The store experience must be free of the artificial constraints inherent in traditional retailing, and instead support a more flexible, customer-centric shopping experience.

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I. The Five Steps To Creating A Strawman Of An Updated POS

Examples of capabilities might include: creating a high-touch shopping experience through associate access to back-end systems; offering cross-channel returns; presenting multimedia content around products; enabling the shopper to access product information, prices, reviews and other pertinent data on the Internet; or accessing loyalty information at the POS. It’s whatever you want the customer to be able to experience and access when they’re on your store floor.

3) Uncover the value of advanced

POS systems.

Today’s advanced POS systems offer a wide array of features to help retailers execute their omnichannel goals. It may be surprising to learn what’s already possible with technology that exists today. So an important step in

roadmap planning is to investigate what is on the market that will help attain the vision. What are the capabilities of new, advanced POS systems? What is the cost/benefit analysis of the relevant products/services being offered?

Nearly three quarters of respondents to RSR Research’s The Multi-Channel Retailer’s Reality in a Post-Amazon World survey said they will, are or plan to implement a solution in which e-Commerce is the basis for Point of Sale. “Retailers want it; vendors are working on putting it together. We expect it to be the standard in all sectors except high-volume commodity retailers like supermarkets and grocers within three to five years,” according to the report. In fact, the report asserts: “POS as a distinct and separate technology may well be dying, at least for everyone but high-volume, low-dollar value retailers.”

Analysts have identified centralized order management as a critical factor supporting omnichannel retail. Research by Aberdeen found 62% of retail leaders vs. 37% of followers (based on customer satisfaction and year-over- year increases in average order value and revenue) share up-to-date order management information across channels (Effective Omni-Channel Retailing: Integrating Order Management Technology, July 2013). “Order management needs to be more than just shared across channels; it needs to be a core component of all channels of commerce,” with cross-channel, order management-ready POS a key order management technology for omnichannel. For retailer winners, this strategy is boosting customer satisfaction and retention, and reducing lost sales costs.

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62% of retail leaders vs. 37% of followers share up-to-date order management information across channels.

- Aberdeen

4) Assess the state of the current POS system.

As the customer-centricity and omnichannel concepts have evolved, many retailers have made incremental investments to incorporate these into their legacy systems. It’s possible that some of this investment may be retained and integrated into the next wave of POS. In this step, it’s important to take a thorough assessment of the condition and capabilities of current hardware, software and integrations.

5) Fill in the gaps between vision and capabilities.

Next comes the work of creating a path from current state to vision state. In this step, a trusted vendor partner can be invaluable in sharing expertise on best practices and recommending a plan that takes into count logical sequencing as well as how much bang each component will offer for the buck.

Questions include:

P �Which parts of the vision does our current system support, or could it support with slight modifications or enhancements?

P �What can we keep, even on an interim basis to get short-term benefits? What do we need to replace? And in what order?

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“ POS as a distinct and separate technology may well be dying, at least for everyone but high-volume, low-dollar value retailers.”

- RSR

Once the five steps have been accomplished, you will have a rudimentary roadmap, or strawman, for where you want to go and a migration path to get there. But because of the critical role this investment will play in so many aspects of the omnichannel retail model, it’s essential to vet it from every angle against business objectives. So the next step is to refine the plan by asking these questions of the solutions that make up your roadmap:

1) Does this solution run on a platform that will keep us open to the possibilities of the future rather than confined to a specific path or ecosystem?

The most efficient approach to omnichannel retail builds on an open foundation that allows for flexibility and adaptability. According to RSR Research’s The Multi-Channel Retailer’s Reality in a Post-Amazon World, Benchmark Report 2012, retailers said that investment in a streamlined technology platform or infrastructure is the best strategy for overcoming obstacles to an omnichannel environment.

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II. Refine The Roadmap

Software flexibility is a must, but flexibility can be found in hardware as well, such as devices that can be field-reconfigured — as a POS, kiosk or self-service unit — as needs change.

2) Will our new system support integration of mobile technology, both customer-facing and associate-facing? How well does it fulfill our mobile strategy?

Mobile devices are rapidly becoming the shopper’s sidekick when they visit a store, and many retailers are working hard on strategies to integrate mobile devices into the store experience for both associates and consumers. Just as with omnichannel, retailers said that investment in a streamlined technology platform or infrastructure is the No. 1 strategy for overcoming obstacles to improving their mobile customer experience, according to RSR’s The Impact of Mobile in Retail, Benchmark

Report 2012, December 2012, with “Retail Winners” (as defined by RSR) in particular advocating this strategy.

Research from IHL Group found that retailers are viewing mobile as part of an overall shift in software strategy aimed at establishing a single cross-channel transaction logic and platform. Mobile becomes a component of a complete POS strategy. The vast majority of retailers are replacing only a small portion of POS with mobile.

3) Will our new system allow us deliver the highly personalized experience that shoppers expect? Does it support our loyalty goals? Does it enhance the store experience?

A distinguishing feature of best-in-class retailers is their ability to promote a customer

engagement culture worldwide, consistently engaging the customer throughout the entire buying lifecycle and across multiple channels and touch-points, according to Aberdeen’s Best-in-Class Strategies to Overcome the Disconnected Customer Experience. Among the report’s key takeaways is the recommendation that retailers develop a formal, structured data capture plan for all points of customer interaction, including at POS.

If your plan is high touch, does it include technologies and applications that provide ready access to customer data? Is that data readily accessible from all appropriate store devices?

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Retailers are viewing mobile as part of an overall shift in software strategy aimed at establishing a single cross-channel transaction logic and platform.

- IHL Group

4) Will it facilitate omnichannel retail and tight integration with the other channels?

A number of studies have established that consumers don’t see channels, they see retailers. The brand experience must be made consistent across all channels, including POS.

RSR Research found 71% of double-digit winners and 67% of single-digit winners (based on their year-over-year comparable store/channel sales improvements) said their top opportunity is investing in cross-channel capabilities. “For the best-performing and most forward-thinking multichannel retailers, that ability to close a sale in whichever channel is most convenient and meaningful to the consumer and the way she lives is exactly how they will continue to compete with Amazon. However, this strategy only works if the paths to purchase – all of them – are completely

interoperable,” according RSR’s The Multi-Channel Retailer’s Reality in a Post-Amazon World report.

Those “winners” are much more focused on coordination with stores (40% of single-digit winners and 42% of double-digit winners compared to 23% of laggards). “Quite simply, the better performing retailer better understands how vital the store’s place is in the new e-Commerce/multichannel experience,” according to RSR.

5) Is this solution interactive? What other interactive technologies should we consider incorporating into our stores (kiosks, gesture-based interactive screens, digital signage, other)? Does our new system tightly integrate with those solutions?

POS is one player in a symphony of devices available to deliver the retailer’s own unique customer experience. But just as the store must seamlessly interact with other channels, devices within the store must work in concert. Make sure the platform enables easy integration with the devices you’ve designated as part of your roadmap, and that the provider offers a solution “ecosystem” — a large network of business partners and developers whose deliverables complement the platform.

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6) Will the solution scale to meet our future needs? Will it accommodate changes if we alter our course? Will it accommodate mandated changes, such as new payment paradigms?

Whether a retailer chooses to move to an omnichannel-enabled in-store environment incrementally or through a wholesale change in architecture, each step on the path should improve manageability of the solution while decreasing complexity — in other words, be sustainable well into the future. Solutions should adhere to three principles:

• Provide flexible support of both cross-channel and channel-specific requirements;

• Support cross-channel processes beyond simply transacting (for example, in-store pick-up or cross-channel returns); and

• Enable numerous types of retailer- and consumer-owned devices through a variety of deployment models.

7) Will this solution lower our cost per transaction and labor costs? Does it offer a lower TCO than we have now? Will it boost associate productivity?

The right advanced store technology can increase uptime and deliver lower cost of ownership and investment protection because it lasts longer, breaks less and meets current and future requirements. Well-designed solutions deliver unprecedented ease of use, lowering training costs and enhancing user satisfaction. The vendor providing your equipment should be able to help you calculate these metrics.

8) Will this solution promote incremental/upsells? Drive new revenue? Collect the data we need to drive future sales?

Likely your vision for the brand experience you’re seeking to create is linked to objectives for driving growth. Make sure your plan accounts for these. For example, if you’re seeking more insight into each customer, your planned retail touch points must include technologies and processes for collecting data, ideally in an unobtrusive way.

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A distinguishing feature of best-in-class retailers is their ability to promote a customer engagement culture worldwide, consistently engaging the customer throughout the entire buying lifecycle and across multiple channels and touch points.

- Aberdeen

Now that you know where you’re going, the next step is determining how to gain internal support for the plan and create an implementation timeline. Questions to ask here are: 1) What will be the cost of the update?

How can we determine ROI for this type of implementation? How will we fund this project? The good news about today’s advanced solutions is the broad array of available application delivery and solution funding mechanisms, including cloud and X–as-a-service models. Many vendors offer ROI calculators and an array of acquisition models.

2) How do we optimize the chosen solution by store according to the needs of individual markets?

Every market is different, so you should match solution configuration and device types to the characteristics of each location.

3) What will the phases and the timeline for implementation look like?

A well-qualified vendor can recommend a realistic timetable based on extensive experience.

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III. Create The Implementation Plan

4) What vendor will we work with?

A wide variety of high-quality, flexible, adaptable products that represent advanced technology are of course a must, but it takes much more than that to help you navigate the many challenges to attaining a fully omnichannel environment that reflects your unique brand identity. Make sure the vendors have the deep knowledge and extensive experience that qualifies them to serve as trusted advisor and consultant. Vendors that already have a substantial installed base and numerous other successful omnichannel projects have seen first-hand what it takes to succeed, and can bring those best practices to your initiative.

Another must-have is a vendor with a large network of business partners and solution developers whose products and services complement and integrate seamlessly with your vendors’.

5) What do we need to support this solution post-implementation?

Make sure you have the resources and training in place to support and modify your solution moving forward, whether through internal or external IT support or a blend of the two. The only certainty is that needs will continue to change.

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Vendors that already have a substantial installed base and numerous other successful omnichannel projects have seen first-hand what it takes to succeed, and can bring those best practices to your initiative.

The requirement for retailers to transition their store environments to facilitate omnichannel retailing is clear, but often the right path to get there is not. Finding the right solution for your business starts with defining your vision, identifying the capabilities that enable it, and then creating and refining a roadmap that takes business objectives and operational, technical and financial needs into account. That’s a mission-critical task, so it’s best made with the assistance of a vendor that offers an extensive product lineup and ecosystem, deep knowledge, and extensive industry experience.

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Get Started On The Path To Omnichannel-Aware POS

CONCLUSION

Every market is different, so you should match solution configuration and device types to the characteristics of each location.

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ABOUT US

About Toshiba

Toshiba Global Commerce Solutions is retail’s first choice for integrated instore solutions. The leading supplier of pointofsale systems with a worldwide install base larger than any three major competitors combined, we are making history with innovative commerce solutions that transform checkout, provide seamless consumer interactions, and optimize retail operations. With a global team of dedicated business partners, we provide endtoend solutions, service and support that help clients meet virtually any retail technology need. To learn more, visit www.toshibagcs.com.

About Retail TouchPoints

Retail TouchPoints is an online publishing network for retail executives, with content focused on optimizing the customer experience across all channels. The Retail TouchPoints network is comprised of a weekly newsletter, special reports, web seminars, exclusive benchmark research, and a content-rich web site featuring daily news updates and multi-media interviews at www.retailtouchpoints.com. The Retail TouchPoints team also interacts with social media communities via Facebook, Twitter and LinkedIn.