2018 POS/CUSTOMER ENGAGEMENT SURVEY - SURVEY 19TH ANNUAL - Windstream Enterprise
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
19TH ANNUAL
SURVEY
2018 POS/CUSTOMER ENGAGEMENT SURVEY
Platinum sponsors: Gold sponsors:
2018 POS/Customer Engagement Survey 2
Executive Summary
With the flurry of recent retail bankruptcies and store closure announcements, “Retail Apocalypse” has been the pervasive topic of the last 12 months.
While mentions of “apocalypse” might work well when trying to grab headlines, the reality is something much subtler and far more interesting.
Yes, the ways that consumers acquire goods and services has changed. Yes, consumer expectations continue to increase. And yes, technology and new
entrants such as Amazon have disrupted the traditional retail model.
However, retail has weathered periods of disruption before and will likewise withstand this turbulence. Catalogs, the move to suburban malls, Walmart,
and the rise of e-commerce are all great examples of retail disruption and transformation cycles. The current rate of disruption and subsequent
transformation is probably the largest many of us have seen or will ever see. While it might be an “apocalyptic” outlook for some, the reality is that it is
just the ever-evolving nature of retail and consumers. In fact, according to the U.S. Census Bureau, retail sales in 2017, through October, were 4.1%
higher than 2016 and in November 2017, the consumer confidence index reached the highest level in 17 years.
Focusing on the “Retail Apocalypse” is like hitting the pause button and ignoring reality – the problem is that yesterday’s retail model is dead.
The customer journey and associated expectations continue to rapidly evolve. Disruption and adaptation are changing the retail model and blurring the
lines among retailers, brands and wholesalers. Online pure-plays are opening brick-and- Exhibit 1
mortar stores and traditional retailers are experimenting with new store models: stores as Future Store Plans
showrooms, theatre, distribution centers or pop-ups. As we see in Exhibit 1, 17% of retailers
are increasing their number of showrooms and pop-up shops. Increase Decrease No change
Brick-and-mortar
63% 7% 17%
Retail and customer engagement models must transform. stores
Store-within-a-store
However, the legacy retail applications and infrastructure still in place at many retail
(i.e. small footprint 27% 20%
organizations are not properly equipped to support a continuously evolving retail model. The within dept store)
retail winners in 2018 and beyond need to accelerate the transformation of their
organization, business processes and technology to align with the demands of their Showrooms 17% 7% 17%
customers. The key to future scalability and flexibility is focusing on agility, with cloud-based
unified commerce.
Pop-up shops 17% 7% 7%
Victory belongs to the agile.
So, let’s press play and move ahead to a new retail future, one that promises to be very Mall kiosks 7% 7% 7%
exciting!
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.
2018 POS/Customer Engagement Survey 3
Key Findings
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.
2018 POS/Customer Engagement Survey 4
Table of Contents
EXECUTIVE SUMMARY 2
KEY FINDINGS 3
THE NEW CUSTOMER ENGAGEMENT MODEL 5
THE CUSTOMER EXPERIENCE IS THE FOUNDATION 6
PERSONAL 8
MOBILE 11
SEAMLESS 14
SECURE 18
UNIFIED COMMERCE 21
CURRENT STATE OF POS 23
THE FUTURE STORE 25
SURVEY METHODOLOGY 28
ABOUT BRP 29
PLATINUM SPONSOR – APTOS 30
PLATINUM SPONSOR – CAYAN 31
GOLD SPONSOR – DIEBOLD-NIXDORF 32
GOLD SPONSOR – ECRS 33
GOLD SPONSOR – FUJITSU 34
GOLD SPONSOR – MANHATTAN ASSOCIATES 35
GOLD SPONSOR – PCMS 36
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.
2018 POS/Customer Engagement Survey 5
“The retail winners in 2018 and beyond need to accelerate the transformation of their organization, business processes
and technology to align with the demands of their customers. Victory belongs to the agile.”
Brian Brunk, BRP principal
The New Customer Engagement Model at one point in time or in one channel. True unified commerce requires
The new customer engagement model centers around a personalized, holistic experiences, transactions and orders that move seamlessly with
holistic customer experience that is channel-agnostic – in other words, the customer.
unified commerce.
Legacy retail technology has focused primarily on the point of purchase.
Retail is in the midst of a transformation. Stores still represent the This must change to realize unified commerce and shift the focus to
majority of retail purchases, but the definition of store continues to robust, personalized and seamless customer engagement.
change. This, coupled with digital experiences that are increasingly
personal and mobile, has blurred the lines between channels and Consumers expect a personalized, secure, channel-agnostic experience
created the expectation of anywhere, anytime, anyhow shopping. This in real-time. Retailers who successfully meet these evolving customer
fundamentally redefines the retail store experience, requiring a expectations take a holistic approach to defining their customer’s
balanced blend of physical and digital that works seamlessly with any journey and understand that change is needed at almost every point in
customer touch point, creating a holistic brand experience. their enterprise. Critical focus points for success include optimizing
customer engagement, adopting mobile technology and achieving real-
To enable the new customer experience and support its rapid evolution time retail across the enterprise.
requires a different technology approach. Retail’s legacy technology of
channel silos does not support this new retail paradigm. With these tenets in mind, the 2018 POS/Customer Engagement Survey
identifies how
And while it’s critical to focus on transformation, retailers need to keep retailers are faring
in mind that retail models, customer expectations and technology will in their quest to
continue to be moving targets for some time. That is why agility is ensure that the
paramount in retailers’ future plans as they look to implement customer four key pillars
experiences for today and tomorrow. defining the
required customer
Channel-agnostic, cloud-based real-time unified commerce is the agile experience –
answer. personal, mobile,
seamless and
Cloud-based unified commerce is imperative to enable real-time secure – are in
visibility and integration across every customer touch point. No longer place to deliver
can retailers afford to think about a transaction or an order as occurring unified commerce.
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 6
differentiate on just product or price, the customer experience is the
The Customer Experience is the key differentiator and it’s what drives customer loyalty. Ever increasing
Foundation customer expectations, retail transparency and today’s anywhere,
To achieve unified commerce, retailers must define the anytime, anyhow shopping have put the customer experience center
ideal customer journey maps to determine the business capabilities and stage for most retailers. There is no longer “online only” or “store only,”
technology required to enable a holistic customer experience. shopping is now the convergence of the digital experience with the
physical environment and it requires a new customer engagement
In the last few years, many retailers have taken a more strategic model to support it.
approach to optimizing the shopping experience for their customers.
The first step is to embark on a customer journey mapping exercise to Retailers must infuse digital capabilities into the store environment to
understand how and why customers interact at each touch point exceed customer expectations, compete more effectively and offer a
throughout the customer journey – for example, when and where they more complete shopping experience.
shop or research products (mobile, online, in-store or catalog), when
and where they purchase and where they like to receive their Retailers’ POS priorities this year mirror the last few years with omni-
merchandise (in-store or delivered to their home). Once they channel integration and adding capabilities to current POS as the top
understand their customers’ behavior and preferences, they are in a two priorities (Exhibit 2). It is interesting that while more than half the
much better position to deliver experiences that are seamless, personal retailers are focused on adding new capabilities to their current POS,
and frictionless. more than half are also prioritizing a POS upgrade or replacement. As
retailers look to implement the right technology for the future, focused
The key to the ideal customer journey is personalization. on cloud-based unified commerce, we expect this approach to shape
their POS plans.
Providing the same experience for all customers is not a differentiator. Exhibit 2
Retailers have the opportunity to personalize the experience based on Top POS Priorities for 2018
analytics and "customer context" to create a unique, personalized
Omni-channel integration 56%
experience for each customer. This requires real-time visibility that
reacts and flexes with the customer to understand where product is at Add capabilities to current POS 56%
all times and flows seamlessly to the final purchase across any channel.
Achieving this requires the right applications and infrastructure, like System upgrade/replacement 54%
cloud-based POS, coupled with unified order management systems and
a rock-solid network to provide the necessary availability and response. Payment security/PCI compliance 41%
Unified or single commerce platform 36%
With today’s technology, consumers have the ability to quickly search
and compare products, promotions, rewards and prices; they also read Mobile POS 33%
customer reviews and get instant feedback from their circle of friends
via social media – all from their handheld device. This transparency Hardware upgrade 13%
makes the retailer’s job more difficult as they can no longer
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 7
To engage with the customer, retailers need to quickly and easily identify Exhibit 3
the customer to personalize the shopping experience. Top Customer Engagement Priorities for 2017
As customer expectations have been reshaped by the digital retail Customer identification/ personalization of
customer experience
62%
experience, retailers have shifted their focus in the physical store
environment. Customers receive personalized offers and Customer mobile experience alignment (mobile
54%
app/ website/ responsive design)
recommendations when shopping online or via mobile that they don’t
tend to receive when they shop in a store.
Empowering associates with mobile tools 51%
Therefore, it is imperative to identify the customer early in the shopping Real-time retail (disseminating data across all
process and at every touch point. This initiates the dialog and sets the channels in real-time)
38%
foundation for relationship building. Identifying the customer as they
Customer-facing technology in the store (digital
enter the store – via their smartphone, beacon or other technology – signage, "smart" fitting rooms, etc.)
21%
affords the retailer the opportunity to personalize the customer’s
shopping experience. Social media analytics 21%
Understanding the importance of personalization, 62% of retailers Guided selling/ clienteling 21%
indicate customer identification is their top customer engagement
priority, which is consistent with the top priority for the past three years
(Exhibit 3).
Creating the necessary customer experience also relies on well-
informed and available sales associates. Today’s information-savvy
consumers are not satisfied with just a ‘warm body’ or ‘one size fits all’
experience – they expect retailers to put time and effort into
establishing and offering a personalized experience.
Other top priorities are focused on providing associates with the
information they need to personalize the shopping experience.
Empowering associates with mobile tools to access customer
information based on their previous purchases and/or preferences is
important to engage the customer. To effectively provide guided selling
services, the sales associate needs up-to-date and readily available
customer and product information.
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 8
are still anonymous when shopping in a physical store so they don’t get
Personal the same level of personalized service. This is an area of opportunity for
Engaging the customer through personalization and retailers as digital and physical retail converge.
relevance is the key to attracting and keeping
customers. Customer identification is critical, however, at many stores it is still
happening at the point of checkout, which is too late to empower the
Customers want to shop wherever and whenever they want with the associate to influence the current purchase decision. Without early
benefits of both the digital and physical retail environments. identification of the customer, retailers miss critical engagement
Personalization plays a critical role in optimizing the customer’s opportunities that can increase sales and deliver a better customer
shopping experience. Retailers need to know whom the customer is to experience.
create a meaningful experience based on what they want and when
they want it. Each step along the customer journey offers retailers This year, we see significant progress and interest in newer technology
another opportunity to engage with the customer and strengthen that methods utilized in tandem with the customer’s mobile phone to
personal relationship to drive sales and customer loyalty. identify customers when they enter the store. The most prevalent
technologies that retailers are currently using to identify customers are
Customer expectations have been reshaped by the digital retail Wi-Fi (40%) and mobile loyalty programs (32%), however more than half
experience. of the retailers using these technologies indicate that they need
improvement (Exhibit 4). Retailers are shifting their customer
As consumers “check-in” on retailers’ e-commerce and mobile sites, identification tools, as they have decreased the use of mobile websites
they automatically receive personalized offers and recommendations (28% this year down from 40% last year) for identification and increased
based on their purchase and browsing history. However, most shoppers the use of MAC address, Bluetooth and beacons.
Exhibit 4
Customer Identification via Mobile Device
Implemented and working well Implemented but needs improvement Implement within 12 months Implement in 1-3 years
Mobile loyalty program 13% 19% 13% 22%
MAC address 13% 13% 3% 9%
Wi-Fi 9% 31% 16% 3%
Mobile website 6% 22% 3% 13%
Social media listening 6% 19% 9% 13%
Mobile app 3% 22% 19% 19%
Mobile wallet 3% 16% 9% 22%
Bluetooth 3% 13% 9%
NFC (near field communication) 3% 13% 16% 16%
Beacons 19% 3% 22%
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 9
The big trend in customer identification lies in retailers’ future plans. up” to the wealth of information and technology that customers
Within three years, 67% of retailers plan to use mobile loyalty programs possess. Putting mobile devices in the hands of store associates enables
and 63% plan to use mobile apps to identify customers in their stores. inventory look-up (enterprise-wide), even for products not immediately
Another interesting point is that there does not seem to be one available or from external vendor inventories. It also empowers
technology choice that is ‘winning’ – retailers are embracing a number associates with information to offer enhanced customer assistance and
of different technologies to cast a wide net and identify and track as even process a transaction anywhere in the store. With mobile devices,
many customers as possible as soon as they enter the store. associates are free from the constraints of the checkout counter, which
enables interaction with customers anywhere in the store.
We expect to see an increased use of beacon technology over the next
few years. Target has added an indoor mapping component to its Overall, retailers still struggle with the ability to access customer
mobile app using beacons to help customers find their desired product information prior to checkout (Exhibit 5). The ability to look up a
in the store, calling it “GPS for your shopping cart.” previous customer transaction before the customer is at the checkout is
only available to one-quarter of the retailers, with customer-specific
Retailers that identify customers when they enter the store and equip messaging, offers and discounts available to less than 20% of retailers.
their associates with the proper mobile tools can personalize the This suggests that retailers are missing opportunities to increase sales
shopping experience based on customer context. because associates can’t access customer data until the customer is at
the checkout – which is too late. With customer data available pre-
Customer context is the interrelated factors of customer insights and checkout, associates can influence the transaction with personalized
environmental conditions the make the shopping experience relevant. It
enables retailers to personalize the shopping experience based on Exhibit 5
preferences, purchase history, their closet, their most recent online Customer Information Availability
browsing history, time of day, weather and their physical location – all Pre-checkout During checkout After checkout
based on real-time information. Transaction lookup 25% 25% 22%
Clienteling and guided selling are an important part of the personal Customer-specific messaging 19% 31% 9%
equation to enhance the shopping experience. Clienteling empowers Customer-specific offers and discounts 19% 25% 16%
store associates to leverage customer data (purchase history, personal Shopping history 18% 13% 31%
information, preferences, etc.) and deliver highly personalized customer
engagement, provide exceptional in-store shopping experiences, and Contact information 16% 53% 6%
timely follow-up communication with customers. To be effective, guided Purchase summary 16% 28% 31%
selling and any other customer engagement tactics can’t operate with
Product recommendations 15% 22% 6%
yesterday’s information – they need real-time data, context and
analytics. Customer attributes/preferences 9% 34% 9%
Social media profile 6% 10% 6%
However, while retailers realize the need to arm their associates with
Information about friends and family 6% 19% 13%
the right training and better information, they are still playing “catch-
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 10
promotions and relevant product suggestions to customers. The The most prevalent customer personalization capabilities involve
unfortunate point is that the vast majority of retailers are currently not offering personalized rewards based on customer loyalty and suggested
providing customer attributes/preferences and product selling based on previous purchases. While the retailers that currently
recommendations to associates pre-checkout which means the missed offer these capabilities is limited, there are expansive plans to utilize
sales opportunities are significant! customer information to tailor the shopping experience. Within three
years, 83% of retailers plan to provide suggested selling based on
Delving deeper into how associates are able to tailor the customer’s previous purchases and 76% plan to offer personalized rewards based
shopping experience based on available information uncovers that the on customer loyalty.
capabilities are still limited but plans to implement these abilities are
increasing (Exhibit 6). This represents significant engagement Some retailers are expanding the personalization aspect of retail into a
opportunities; however, retailers must have a unified commerce “make shopping fun and engaging” experience. This includes
platform in place that enables real-time visibility and access to customer gamification – where game-like interactions, rewards and incentives are
information, inventory, product and pricing. Integrating customer and offered for visiting a web site and finding a great deal, shopping early or
product information to a clienteling solution and early customer late or on an “off day,” or providing additional personal information like
identification is imperative to personalize the in-store customer family size or zip code. The key to this personalization aspect is to tailor
experience. the interaction based on the customer’s habits. We are also seeing this
augmented by artificial intelligence to keep the customer engaged and
Exhibit 6 encouraging further visits and interactions.
Tailoring the Shopping Experience
Currently offer Offer within 12 months Offer within 1-3 years
Suggested selling based on previous
purchases
23% 30% 30%
Personalized rewards based on
customer loyalty
23% 20% 33%
Suggested selling based on
customer closet/room/garage
20% 20% 27%
Suggested selling based on online
browsing history
20% 13% 37%
Personalized promotions 13% 23% 37%
Suggested selling based on social
media activity/posts
13% 13% 47%
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 11
purchase on the sales floor at the moment the buying decision is made.
Mobile It also frees the associate from the checkout area to allow for more
The pervasiveness and ease-of-use of mobile devices personal interactions on the sales floor and simplifies the checkout
offers tremendous opportunities for retailers as the process by eliminating the need to wait in line.
customer takes control of their own retail experience
across channels. Over the next year, the use of mobile devices – both in the hands of
associates and customers – and tablets will continue to increase along
There is no denying the power of mobile technology as a disruptor in with a decrease in the use of traditional POS terminals and PCs (Exhibit
the retail industry. Retailers realize that mobile devices are ubiquitous 7). This is consistent with the trends we are seeing in the industry.
and recognize that a mobile device in the customer and associate’s Mobile POS lowers the overall cost of ownership by eliminating or
hands holds tremendous opportunities to enhance the customer minimizing the need for “big iron” (a thick-client cash register) at store-
experience in the store. level and virtually eliminating annual hardware maintenance fees, as
most units are disposable.
Consumers use their phones to research products, compare prices,
complete purchases online and increasingly, to pay for in-store As further confirmation of retailers’ plans to focus on mobile devices,
purchases. The proliferation of tablets and mobile phones also offers this year 42% of retailers currently offer mobile solutions for associates,
new opportunities for retailers to enhance customer service. Mobile and within three years 78% of retailers plan to offer these tools.
point of sale (POS) enables associates to complete a customer’s
Exhibit 7
POS Hardware Plans by 2019
Increase Decrease No change Phase out
Mobile devices (non-tablets) 62% 3% 16%
Tablets 59% 22%
Customer-owned mobile devices (Apple iOS, Android, Windows) 45% 21%
Hybrid POS (tablet that can be docked and connected to peripherals) 42% 3% 26%
Customer stations (flat panel display, AppleTV, touchscreen, etc.) 24% 3% 34%
Kiosks 21% 5% 29% 11%
Self-checkouts 21% 29% 3%
Notebook/laptop computers 18% 5% 45% 5%
Traditional POS terminals 8% 16% 63% 5%
PCs/desktop computers 5% 13% 58% 5%
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 12
However, the majority of those retailers who offer mobile solutions as POS over the next few years. The future will likely see new and
indicate improvement is needed. exciting ways that customers use ‘wearables,’ which will shape their
expectations and experience.
Retailers need to continue to improve mobile capabilities through
different processes, better technology or enhanced training for Utilizing customer-facing technology is a natural outcome from the
associates. Powerful associate tools are only helpful if associates are proliferation of mobile devices and is a big part of the overall customer
trained to use them effectively, especially when associates are dealing experience. As customers become more comfortable and proficient
with sensitive customer information. Mobile POS also continues to be a with utilizing mobile technology and researching information on their
priority with 20% utilization this year and 70% within three years, own, retailers need to offer expanded customer-facing mobile services
however, a majority still indicates that improvement is needed (Exhibit to enhance the shopping experience.
8).
The good news is that retailers are increasingly implementing customer-
For most retailers, mobile POS has not become a substitute for a facing mobile services such as product information, shopping list
traditional fixed station POS. The majority of retailers continue to use capabilities, and personalized recommendations via mobile devices.
traditional POS stations as their basic POS, adding mobile options and However, there are still many missed opportunities to tailor the
additional PCs or tablets as supplements. The transition from fixed shopping experience by offering personal recommendations on
station POS to a hybrid environment and more mobile solutions is customers’ mobile devices.
underway but it is a slow process.
The bad news is that there are still issues with how well these processes
Unfortunately, retailers are continually playing catch-up as the are working. In all cases, the ‘implemented but needs improvement’
proliferation of tablets and mobile phones is only the beginning. The category exceeds the ‘implemented and working well’ category, which
growing popularity of Internet-powered personal devices – ‘wearables’ likely indicates that the processes currently in place have been manually
– will strengthen the case for utilizing customer-owned mobile devices pieced together or rushed to production before they were fully tested
and perfected (Exhibit 9). We expect this to improve as retailers
Exhibit 8
embrace true unified commerce and work on implementing cloud-
Implementation Status
based solutions with real-time capabilities instead of piecing together
Implemented and working well Implemented but needs improvement legacy systems and processes to meet customer expectations.
Implement within 12 months Implement in 1-3 years
In many cases, these customer-facing mobile services encompass the
Mobile solutions for
6% 36% 22% 14% same functions that retailers look to offer associates. Another benefit of
associates
unified commerce is that these capabilities or services can be built once
and then deployed across various different use cases and clients,
Mobile POS 3% 17% 31% 19% whether customer-facing or associate-facing, to ensure that everyone
has access to information that enhances the shopping experience.
Customer-owned mobile
device as POS
8% 17% 17%
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 13
Mobile technology in the hands of consumers and retail associates is the journey will deliver an experience that is as good as the data shared
biggest driver for the needed transformation of the customer with the customer.
engagement model.
This area is clearly transforming retailers’ customer engagement model,
Mobile is driving retailers to upgrade and replace technology to keep operational budgets, in-store procedures and layouts. Mobile
ahead of their competitors’ customer experience offerings and to keep capabilities and expectations continue to evolve rapidly and need to be
up with their very informed and technology-savvy customers. a significant part of a retailer’s customer engagement strategy.
While the shift to mobile tools can dramatically enhance the shopping
experience and reduce retailers’ total technology costs, it brings its
share of challenges. As with any new technology, these innovative
mobile approaches require a fundamental change in processes and
corresponding training to educate sales associates and customers to
convince them to try and use the new processes.
To make the best use of these mobile technologies, retailers need to
have highly available and redundant in-store networks as well as a
holistic approach to real-time retail data. Having a mobile device and
engaging with the customer anywhere at any time during their shopping
Exhibit 9
Customer-Facing Mobile Services
Implemented and working well Implemented but needs improvement Implement within 12 months Implement in 1-3 years No plans to implement
Product information (price, location, availability, research) 21% 39% 9% 12% 18%
Mobile coupons, specials, promotions 18% 36% 24% 3% 18%
Mobile loyalty 18% 21% 15% 24% 21%
Prior purchase visibility 15% 42% 12% 15% 15%
Shopping list/wish list 15% 21% 6% 27% 30%
Mobile wallet 12% 15% 21% 15% 36%
Personalized recommendations 9% 33% 21% 18% 18%
Geolocating 3% 30% 15% 12% 39%
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 14
However, 89% of those implementations still need improvement
Seamless (Exhibit 10). Demonstrating the importance of a seamless customer
Customer expectations for a personalized and experience, an additional 53% of respondents plan to implement unified
seamless experience require retailers to follow commerce within the next three years.
customers’ journeys across channels as they research,
shop and purchase. As retailers and solution providers continue down the path to unified
commerce, more and more capabilities are being centralized or offered
Customers want access to a single cart to shop across channels and be as cloud-based services. Retailers are embracing this move to the cloud
able to reach their cart via phone, computer, or even in the store – they as it is key to enabling unified commerce real-time capabilities and
want to “start anywhere and finish anywhere.” Real-time retail, through integration that are scalable and agile enough to support evolving
unified commerce, enables retailers to identify the customer and business needs.
gather, analyze and disseminate customer, product, pricing, and
inventory data across all channels – instantly. Since consumers expect a Leveraging cloud computing and IT outsourcing makes a lot of sense for
seamless experience in the store, on the Web and via their mobile many retailers. IT is not a core competency or differentiator for most
device, real-time retail is an imperative. retailers — it is just a necessity. A cloud approach enables retailers to
significantly reduce infrastructure, improve security and increase
Retailers are increasingly turning to a common unified platform to operational effectiveness by centralizing management of data and
deliver consistent, relevant shopping experiences across all channels. processes. Retailers are embracing this move as they realize cloud-
This centralizes data storage and application integration and allows based unified commerce is key to accelerating their path to a single
easier real-time access to information across the ecosystem (stores, version of the truth.
distribution centers, suppliers, etc.).
Given the move to the cloud and a growing preference by retailers for
Retailers’ implementations of unified commerce have increased utility-based, as-a-service solutions, we see the next step in this
significantly in the past year, 28% this year compared to 9% last year. evolution as “IT-as-a-Service” or the adoption of a utility model. This is
a real opportunity for retailers with a one-stop-service for all their IT
Exhibit 10 needs — hardware, infrastructure, applications, implementation and
Unified Commerce Implementation Status maintenance services. This bundled, all-inclusive approach can simplify
retailers’ operations and give them the agility and flexibility needed for
Implemented and working well Implemented but needs improvement current and future transformation.
Implement within 12 months Implement in 1-3 years
Further bolstering the move to the cloud is the availability of much
more sophisticated network technology, such as SD-WAN and 5G. With
A single commerce platform today’s network technology, retailers can truly achieve 100% uptime –
for store, mobile, and web (i.e, 3% 25% 22% 31% removing the last perceived hurdle in moving towards cloud-based
Unified Commerce) commerce solutions and moving away from the decentralized store
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 15
environment that has been the foundation of the traditional retail few shopping days knowing that pure-play online retailers generally
model for decades. couldn’t fulfill customer purchases in time.
Cloud computing, either public or private, offers the quickest and surest Amazon and Walmart continue to raise the bar on quick delivery times
path to seamlessly connect all e-commerce, mobile commerce and in- as Amazon unveiled Amazon Key to allow deliveries inside Prime
store POS transactions to order management, inventory, marketing, members’ homes, and Walmart acquired Parcel, a technology based,
financials, supply chain and customer service. One of the best models to same-day delivery company within the large New York City market to
adopt is a hybrid cloud where private and public clouds are bound accelerate the development and optimize processes for same-day
together by standardized technology to enable data and application delivery. Target recently jumped into the game with its acquisition of
portability.
Exhibit 11
Many retailers have made the shift to the cloud over the past few years Centralization of Store Systems
as a means of centralizing their store systems, although we are still
seeing some retailers hesitate which may prove to be their downfall as Business intelligence/ enterprise reporting 86%
the shift to the cloud enables an agility necessary in today’s
environment (Exhibit 11).
CRM 77%
Many retailers have recognized the value of cloud-based applications:
speed of deployment, faster software updates, lower software costs and Pricing 77%
a real-time, single version of the truth.
Inventory 66%
Many retailers have started down the unified commerce path by
offering services that emulate the expected seamless holistic shopping Workforce management (Time & Attendance/
66%
Labor scheduling)
experience, but in many cases the methods were manual and involved
complex integration across multiple systems and processes, and then
they didn't often work very well in real-time. Loss prevention 60%
As time-constrained consumers demand more convenient and Point of sale 49%
expedient shopping and delivery options, it is critical for retailers to
offer omni-channel fulfillment options such as buy online, pick-up in Returns processing 49%
store, same day delivery and other flexible delivery choices. The table
stakes continue to increase as consumers are now beginning to expect
Special orders 46%
same-day delivery as the normal lead-time for most products and free
two-day delivery for other products. Although this past holiday season,
many brick-and-mortar retailers were able to take advantage of their Task management 46%
ability to offer buy online, pick up in the store (BOPIS) during the last
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 16
Shipt, a leading online same-day delivery platform, and expects to offer internally and externally is out-of-date and, therefore, risks being
same-day delivery to customers at approximately half of its stores inaccurate and out of context. It’s like crossing an extremely busy New
within the next few months. York City street with yesterday’s traffic information!
Retailers are still working on their offerings of cross-channel and It is still very challenging for retailers to effectively execute real-time
fulfillment services such as inventory visibility across channels and the retail. More than two-thirds of retailers say they can access inventory,
ability for customers to buy online and pick up in the store (Exhibit 12 pricing/promotions and analytics in real-time but most of the processes
and 13). There is still room for improvement as retailers struggle to still need improvement (Exhibit 14). In our experience, many retailers
meet enhanced consumer expectations. can check inventory in real-time but the inventory data they are
accessing is from yesterday as it is not really available in real-time. As
The importance of real-time visibility and access to product and customer retailers move to unified commerce, full access to enterprise-wide data
information has grown exponentially over the past few years as in real-time will become more common.
consumers have become more demanding.
Unfortunately, these processes are likely pieced together from disparate
In today’s disruptive and competitive retail environment, real-time retail systems and retailers will need new cloud-based unified commerce as
is quickly becoming table stakes and retailers that don’t have the right the foundation to be able to effectively monitor, access and analyze
capabilities will struggle. Without real-time data, information provided real-time information seamlessly.
Exhibit 12 Exhibit 13
Cross-Channel Services Fulfillment Services
Available and working well Available but needs improvement Implemented and working well Implemented but needs improvement
Available within 12 months Available in 1-3 years Implement within 12 months Implement in 1-3 years
Returns accepted across Buy online, pick up in-store 30% 18% 21% 9%
channels
34% 19% 19% 9%
Inventory visibility across Buy anywhere, ship anywhere 21% 21% 15% 15%
channels
28% 38% 13% 9%
Order visibility across Buy online, ship from store 21% 9% 12% 27%
channels
25% 28% 25% 13%
Reserve inventory in another Buy in-store, ship from DC, other
22% 28% 22% 9% store, or vendor
18% 27% 12% 18%
store
Special order from any Reserve online, pick up in store 12% 6% 24% 21%
channel
9% 31% 16% 16%
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 17
Retailers are realizing that the process of offering customers the ability
to shop anywhere, ship anywhere is complex and the goal line seems to
keep moving as new technology and consumer behaviors constantly
change. The key to winning is to map out a comprehensive customer-
centric strategy, understanding that a new model is necessary to
succeed, and the new model requires an agility that has not traditionally
been a part of this environment. The road will not be smooth and will
likely require partners to help create the required seamless experience.
Exhibit 14
Enterprise-wide Real-time Features
Implemented and working well Implemented but needs improvement Implement within 12 months Implement in 1-3 years No plans to implement
Pricing/promotions 30% 40% 13% 7% 10%
Inventory 30% 37% 13% 10% 10%
Analytics/reporting 27% 47% 3% 17% 7%
Returns management 23% 37% 13% 17% 10%
Loyalty program enrollment/ change/ status 20% 30% 10% 27% 13%
Loss prevention 13% 43% 17% 13% 13%
Cross-channel transaction history 10% 37% 13% 17% 23%
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 18
and staff to keep customer wait times manageable.
Secure
Today’s retail environment requires security beyond There are also online repercussions as the enhanced security of
retailers’ current focus on payments and networks. transactions in the store has forced fraudsters to look at exploiting e-
commerce transactions to capture credit card numbers and other
As retailers seek new ways to gather relevant personal data. Most retailers are seeing significant increases in “card
information to provide customized experiences, like product not present” transaction fraud and are spending time and energy trying
recommendations via digital screens in the dressing rooms, MAC to increase the sophistication of their online fraud protection and
address identification or facial recognition, alerting an associate to a analytics. Due to EMV there has been a significant reduction with in-
shopper’s arrival, they must address how to protect their customer’s store fraud while online fraud, including mobile applications, has risen
data. While more information offers a more personalized experience, it dramatically. These changes in the retail landscape make it more
also provides a greater opportunity for data theft and fraud. Retailers important than ever to protect customer data and effectively monitor
need to establish security policies that ensure the data privacy of their in-store and online transactions.
customers’ information.
Exhibit 15
Purchase and payment touch point options continue to expand Payment Security Technology Plans
with voice-assisted and virtual reality payment-enablement
Implemented and working well Implemented but needs improvement
possibilities in the works. With technological capabilities rapidly
expanding, keeping up with advancements and ensuring a Planning to implement within 12 months Planning to implement in 1-3 years
frictionless experience, while also guaranteeing the security of data No plans to implement
will remain a challenging feat for retailers. It is imperative that
retailers have a strong information security team to maintain a End-to-end encryption (E2EE) 47% 21% 17% 6% 9%
multi-layered security approach that includes the use of tools and
proactive log monitoring analytics.
EMV-enabled transactions 38% 21% 18% 23%
While the liability shift associated with EMV (Europay, MasterCard
and Visa) occurred more than two years ago, many retailers are still Mobile payment acceptance (NFC, MST,
15% 20% 29% 12% 24%
etc.)
working towards providing EMV-enabled transactions. While we
are seeing further acceptance of EMV-enabled transactions (59%
this year up from 52% last year), there are still a number of Tokenization for single sales channel 15% 15% 20% 12% 38%
retailers who are falling behind (Exhibit 15).
Single token solution across enterprise 14% 9% 26% 12% 38%
In the store environment, many retailers (and customers) have
realized that the average EMV-enabled transaction takes longer
than a non-EMV transaction due to processing times. In many Mobile EMV payment acceptance 9% 15% 32% 18% 26%
stores this is a costly issue because it requires more checkout lanes
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 19
Unfortunately, EMV doesn’t really offer data security functionality even Mobile payments in stores use tokenization so that the retailer never
though it is usually included in the same security upgrade projects actually has the customer’s payment card number, which significantly
because it involves the same partners, programs and hardware as the reduces the security risk and speeds up the transaction.
first line of defense, which is end-to-end encryption (E2EE). E2EE has
increased significantly over the past few years with a reported 68% of There are a multitude of mobile wallets and payment apps in the market
retailers utilizing it. E2EE prevents third parties from accessing data today. In addition, many retailers are offering their own mobile payment
throughout the system because only the authorizing parties have access options. For example, Target recently incorporated a mobile wallet
to the encryption keys. option within their mobile application.
The next protective layer involves tokenization, which enables retailers PayPal and Apple Pay continue to be the most widely accepted payment
to remove sensitive information from the network by substituting types in this survey (Exhibit 16). This year fewer retailers are adopting a
payment card data with a token which is used as an identifier but has no wait and see approach across the board – likely because of the growing
exploitable value or meaning. 23% of the respondents have support from the payment software ecosystem and the acceptance for
implemented a single token solution across the enterprise,
with an additional 38% planning to implement within the Exhibit 16
next three years. This technology is critical to offering Alternative Payment Types
customers a single unified commerce experience for returns,
Accept Accept within 12 months Accept within 1-3 years Wait and see approach
customer profiles and saved shopping carts retrieved across
channels.
Apple Pay 37% 26% 14% 23%
Payment security remains a concern for retailers for the PayPal 37% 14% 20% 29%
foreseeable future. Most of the retailers involved in our
survey reported moving towards a security plan with Android Pay 29% 20% 17% 34%
multiple layers to protect sensitive customer and Private (retailer branded) closed
organization data. Moving store applications to the cloud loop payments
24% 6% 71%
makes security easier – customer and associate information MasterCard PayPass 18% 24% 15% 44%
will reside at a data center or home office instead of at the
store-level, which means it’s easier to secure. If retailers Visa Checkout 14% 29% 9% 49%
utilize encryption and tokenization there is no critical
information residing at the store to secure. Samsung Pay NFC 14% 11% 9% 66%
Chase Pay 11% 26% 9% 54%
Mobile payments offer further opportunities for customers
and retailers, as it enables customers to make purchases Crypto currency (Bitcoin, etc.) 3% 12% 85%
without their wallet (but with their ever-ubiquitous
smartphone) and provides an additional level of security that Softcard 3% 9% 88%
isn’t available with credit cards, even EMV-enabled cards.
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 20
these mobile payments by the public.
One of the critical factors for mobile payment success in the next few
years is education and training. We have found repeatedly that not only
are most consumers unsure of how, when and if mobile payments can
be used, but even more telling, associates are unsure. For mobile
payments – or mobile wallets – to succeed, there must be further
education at the point of sale to ensure that a transaction using a
mobile device is no longer or more complicated than traditional
payment methods for either the customer or associate.
While the pros and cons of each of these payment types – and future
payment types – can be debated, what is most apparent is the adoption
across the industry as customers and associates become more
comfortable utilizing these emerging payment platforms.
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 21
Unified Commerce Reliability, bandwidth and security are the top network priorities for
A common cloud-based commerce platform provides more than 60% of retailers (Exhibit 17). Today’s always connected
a single version of the truth across all channels to customer puts additional pressure on retailers to ensure that they can
enable real-time visibility and availability of accurate provide a secure, reliable high-speed network to support the shopping
inventory and customer information. environment. Unfortunately, many existing store networks do not have
the capability to support current and future store infrastructures;
Unified commerce goes beyond omni-channel, putting the customer therefore, it is not surprising that this is a main focus.
experience first, breaking down the walls between internal channel silos
and leveraging a common commerce platform. A common, real-time Service-Oriented Architecture
platform for all customer engagement points is a key tenet of unified A robust middleware layer, or service-oriented architecture (SOA), is
commerce. A unified commerce platform is not simply the future in- essential in effectively enabling real-time capabilities and uniting various
store or Web platform, but combines in-store POS, mobile, Web, order retail systems to deliver unified commerce. Many customer interactions
management, call center and clienteling into one integrated platform. It or retail transactions require data from various retail systems to be
has become the new retail imperative. gathered, analyzed and disseminated in real-time. Therefore, every
customer or associate transaction traverses the middleware layer,
Unified commerce, with a common commerce platform, supports all which brings the commerce platform to life.
customer touch points and channels. This eliminates integration issues
and supports real-time visibility, enabling an enterprise-wide, unified Exhibit 17
view of the customer, inventory, fulfillment, etc. To architect the Top Network Priorities
optimum foundation, there are three major components of a unified
Reliability of networks 70%
commerce platform: networks, service-oriented architecture and order
management.
Network bandwidth 64%
Networks
Security of networks 63%
The network is a critical element of the technology platform – providing
availability, security and reliability. Today’s networks are robust, fast,
Network efficiency performance 43%
reliable and resilient, which is key to supporting a cloud-based common
commerce platform across channels. As retailers deploy more Ability to control and prioritize
24%
applications in the cloud, the new norm has become hybrid cloud applications using the network
environments, with a mix of private and public cloud-based services.
Network resiliency 22%
This is where the network plays a central role in the future of unified
commerce. SD-WAN technology provides the necessary availability and Visibility and understanding of
10%
flexibility for cloud-based commerce. A robust, well-architected and applications using network capacity
properly managed network solution is imperative for unified commerce
Other 3%
success in the cloud.
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 22
While retailers understand the importance of moving to a unified
Exhibit 18 commerce model, it can be a daunting project when considering the
Implementation Status scope of a commerce platform that enables and supports every
Implemented and working well Implemented but needs improvement customer touch point – in real-time. An additional complexity is the
Implement within 12 months Implement in 1-3 years rapidly evolving landscape of software vendors looking to best position
their solutions for unified commerce. Throughout this evolution, more
Middleware Layer/SOA 19% 22% 6% 3% capabilities are being moved out of point solutions like POS and being
centralized, or in many cases, enabled as cloud-based services. Retailers
are embracing this move to centralized data as they realize that it is key
to accelerating their path to a unified commerce platform that is
Middleware/SOA layer implementations have increased from 34% total
integrated, scalable and flexible to support evolving business needs.
implemented last year to 41% implemented this year, although there is
still much improvement needed (Exhibit 18).
Order Management
Central to unified commerce is an order management system (OMS)
designed to manage orders across all channels, including a POS user
interface, complex fulfillment options and inventory in real-time. With
significant advancements in order management systems, there is a
convergence of OMS with traditional POS. More retailers are evolving to
a single (unified) order management system to support all channels
(Exhibit 19).
Exhibit 19
POS/OMS Capabilities
Current state and works well Current state and needs improvement Plan for for next 12 months Plan for 1-3 years
Order management capabilities provided by POS software 12% 30% 6% 18%
Separate OMS 21% 27% 15% 3%
Our OMS acts as our POS 6% 15% 6% 3%
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 23
mobile POS devices are less than five years old (Exhibit 20). Mobile
Current State of POS device usage continues to grow, but at a slower rate than projected in
The right technology foundation is essential to support the customer prior surveys. It appears to be tied to the trend of retailers replacing a
experience across channels. portion of their current devices with mobile devices when they perform
a hardware refresh. It is also partially driven by retailers realizing the
With an increased focus on customer engagement and a convergence of shorter life cycle for mobile devices compared to traditional stationary
the physical and digital retail worlds, POS and its supporting technology POS terminals. Mobile payment terminals, though, seem to be slow to
play a critical role in shaping the customer shopping experience. With be accepted, with two-thirds of the retailers not even utilizing them.
continuous advances in technology, a POS system that is only a few Retailers seem to be more focused on utilizing mobile devices for line
years old may already be obsolete. busting and inventory functions.
Retailers are looking to refresh their hardware with the latest offerings According to this year’s survey, 22% of retailers are planning to keep
to take advantage of faster processor chips and larger storage needed their current mobile devices as a POS in use for more than five years,
to efficiently run more advanced software. Over the past two years, which similar to the response in last year’s survey. This seems a little
many retailers have upgraded or added mobile devices and almost all unrealistic, considering the speed of technology change and the wear
Exhibit 20
Current System Age
< 2 years 3 to 5 years 6 to 8 years 9 to 11 years > 12 years
Fixed payment terminals 31% 28% 19% 3%
Mobile devices - back-office 31% 11% 3% 3% 3%
Mobile devices - POS 28% 6% 8%
Store network 26% 37% 14% 9%
Mobile devices - customer engagement 25% 8%
Mobile payment terminals 22% 8% 3%
POS software 19% 19% 17% 19% 17%
POS hardware 14% 36% 19% 11% 8%
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.2018 POS/Customer Engagement Survey 24
and tear on mobile devices is much greater than on stationary devices
(Exhibit 21).
Retailers realize that POS software should be replaced regularly to take
advantage of better, faster and more reliable technology. However,
budgetary constraints and the complexity of a POS replacement project
drive the age up, with 53% of retailers reporting POS software that is
more than five years old. More than one-third of the retailers surveyed
are planning to replace their current POS software and hardware within
three years.
Exhibit 21
Planned Replacement Timeframe
< 12 months 1 to 3 years 4 to 5 years > 5 years
POS software 19% 17% 17% 36%
POS hardware 17% 31% 11% 28%
Store network 14% 25% 17% 31%
Fixed payment terminals 11% 19% 17% 28%
Mobile devices - back-office 8% 11% 11% 19%
Mobile devices - customer engagement 6% 9% 11% 14%
Mobile devices - POS 6% 14% 3% 22%
Mobile payment terminals 3% 11% 11% 14%
BRP provides comprehensive consulting for retail and restaurant companies including: strategy, selection and implementation services.You can also read
