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Digitizing legacy POS for omni-channel integration

Say the word ‘POS’ and nine times out of ten, it will bring to mind the image of a clunky payment processing system mounted on a dedicated checkout counter. True, since its advent in 1974, the humble electronic cash register has managed almost 100% of retail transactions- processing transactions with utmost efficiency and speeding up checkout. But, in the new omni-channel world this is merely table stakes!

A new normal…

The POS is now a complete, unified commerce engine- one that must support a seamless customer experience across physical and digital channels, while integrating the ever expanding options for ordering and fulfilment. It is an important piece in the new ‘customer engagement’ network of applications: POS, OMS, CRM, loyalty, gift cards, etc., and a key facilitator in the pre- and post-sale processes. Together, they offer retailers unique opportunities to cross-sell/upsell, conduct clienteling, and engage customers in deeply personalized ways at the store-level to combat the ‘siren song of showrooming.’

The modern POS empowers the store’s front-line employee with a wide variety of customer data including product preferences, purchase history and loyalty information in real-time. Additionally, he is able to save that lost sale by offering customers access to the retailer’s entire inventory array, irrespective of where the product actually resides.

In other words, the POS user is empowered to monitor all ordering processes, regardless of which channel customers choose to place their order and how they decide to procure it- an absolute prerequisite for any ‘Buy Online, Pickup in Store’ and ‘Buy Online, Return in Store’ options.

The modern POS can thus deliver the reimagined customer experience, while still adhering to the POS ‘fundamentals’ of high transaction speed, flexible payment options and robust security.

…needs new capabilities

To make POS systems more connected and powerful than ever before, deeper data integration between POS and back-office systems assumes paramount importance.

It becomes necessary to knock down existing data silos and introduce a single, comprehensive data management system that extends seamlessly to thousands of stores, and to the web to support multiple operations in the omni-channel retailing model.

At the core of such a system, there must be a single, synchronized database that culls data from various systems to create a robust, 360 –degree view of each customer. The retailer can thus monitor every aspect of store transactions. And front-end transactions can be brought seamlessly to the back-end throughout the shopping journey. For instance, based on a customer’s activity on any channel or device, e-coupons can be immediately created and price changes flashed to every terminal, with utmost speed and accuracy. Similarly, order status, purchase history and order details can be accessed by POS users from anywhere.

But, here comes the real challenge

Most retailers still have standalone POS systems, i.e, systems that are not fully integrated with other customer process management applications. This makes data collection from various sources much more difficult and impacts the retailer’s ability to make the most out of their POS transactions.

According to RIS News’ “13th Annual Store Systems Study” and EKN Research’s “Retail Point-of-Sale Blueprint”, a mere 28% of retailers are up to date with POS technology, while the average age of POS system is teetering at 6.7 years.

These aging systems hinder the adoption of unified commerce, because the legacy architecture is generally rigid, requires heavy customization, and is designed for a single location. And they lack the scalability and flexibility needed to handle enterprise-wide management of customer transactions, inventory levels and logistics operations.

Technology

Capabilities and technology go hand-in-hand in digitizing the existing, legacy POS.

The use of a standards-based integration approach for legacy POS allows smooth and effortless migration towards future-proof POS upgrades. It assists retailers in creating a simplified architecture, which helps to integrate the payment system with various back-end applications such as multi-channel order management, loyalty, pricing, inventory, and payments, among others.

A more synchronized data flow ultimately guarantees reduced transaction time and quicker response towards promotions that are executed at POS. Plus, it significantly reduces IT costs due to the use of open standards, designed to support future enhancements including new IoT, mPOS and order management capabilities.

AURAS-Omni is one such comprehensive solution that helps to meet integration challenges in the world of omni-channel retail. In addition to solving legacy integration challenges, its flexible architecture also enables easy upgrades in the future to support Mobility, Kiosk, mPOS, IoT, Smart-Store and ecommerce specific advancements.

 So, what are the next steps?

Whether you are looking to select a POS system or make sound improvements to an existing legacy POS system, the following key imperatives must be addressed:

  1. IMPROVE FRONT-END PROCESSES: The first step lies in establishing key performance metrics such as average checkout time, customer satisfaction, growth in basket size etc. to evaluate existing infrastructure. If your stores are consistently underperforming, a set of key front-end processes (for instance, clienteling, payment execution etc.) must first be improved before setting out to restructure the POS architecture at your stores.
  1. FORMULATE RESTRUCTURING PLAN: Next, keeping a specified ROI roadmap in mind, a cost-benefit analysis of hardware, software & peripheral upgrade requirements needs to be carried out to support a growth plan. Open standards for scalability and future upgrades should remain a crucial parameter in evaluating any software and/or hardware upgrade.
  1. INTEGRATE POS WITH OTHER BACK-END APPLICATIONS: Finally, a centralized data management strategy that includes SOA elements needs to be put in place. From an operations standpoint, POS integration lays the foundation for workforce management, sales analysis, promotion planning, and overall revenue management.

Being innovators in omni-channel retailing, retail leaders like Macy’s and Nordstrom have already invested in digitizing their POS system to facilitate smooth tracking and fulfilment of customer needs, both online and online. That the future of POS and the future of retail are inextricably intertwined goes without saying.  And with unified commerce being the direction that retail will travel, POS is poised to undergo profound transformation in the next few years. Now is thus the best time for laggards to make the leap or risk being left behind.

Connect with our Enterprise Integration experts to digitize your legacy POS & orchestrate seamless omni-channel journeys for your customers.

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