Omni-channel

1. Question: Should POS be the transaction
software of record or should it be the e-
commerce platform, or should retailers
have both?
Kris Torgerson, Vice President: The line
between the two has, and should, blur with the
concepts and realities of Omni-Channel and data
convergence. POS and e-commerce should be
two lenses into the same dataset – business
requirements and customer experience needs
dictate which software lens should be provided,
but each avenue to engage with the customer
should come back to a common system of
record which wouldn't necessarily be either POS
or E-Commerce.
Perry Kramer, Vice President: I think it
depends on the retailers' maturity. The desired
end state is a middleware layer or Enterprise
Service Bus that connects all of the customer
and POS touch points to a common view of
inventory, fulfillment options, and back-end
accounting, BI and CRM functions. That said,
some retailers are slowly migrating their systems
one step at a time from multi-channel to the
single customer view of Omni-Channel. The
more advanced retailers are taking the “leap
frog” approach of going straight from multi-
channel, (or in some cases a single channel), to
the desired single view Omni-Channel
solution. For the less ambitious retailers it is a
slow journey from multiple independent
customer systems, to a hybrid, to a single
services-based approach.
Ken Morris, Principal: The middleware/SOA
layer is really a middle step for retailers - in the
future there should be only one platform across
all channels – “one version of the truth” – this
one platform will handle POS, mobile, website,
any and all channel transactions - it will be an
Omni-Channel platform. This will not be a legacy
point of sale or legacy e-commerce system – it
will be an Omni-Channel platform for the future
that connects all of the customer and POS touch
points to a common view of inventory, fulfillment
options, back-end accounting, BI and CRM
functions.
THE FUTURE OF OMNI-CHANNEL RETAILING
2
A CONVERSATION WITH BRP
1
During a recent
interview for an RIS
News article, a few of
the consultants at
Boston Retail Partners
participated in an
interesting discussion
about the future of
Omni-Channel – the
conversation is
excerpted below.

2. A CONVERSATION WITH BRP: The Future of Omni-Channel Retailing Page 2 of 4
Q: Or should retailers have a software
layer that resides above all transaction
applications in the organization that
integrates them through SOA
architecture?
Kris: Again, this is a business capability
question. In larger retailers, effectively
addressing the growing complexity of an
integrated retail experience often requires SOA
or at minimum, an ESB type integration
layer. Less complex business models may not
choose this approach and leverage point-to-
point integrations instead. However, the thrift
orientation of retail IT often leaves a patchwork
of legacy systems required to support core
business functionality. It is rare that an effective
SOA type approach to integration doesn't ease
the progression of IT delivery as well as lower the
long-term TCO of an organizations system
portfolio.
Ken: I think the reality is that retailers aren’t
going to throw away legacy systems all at once -
moving to the Omni-Channel platform will take
years. The bridge to get to the Omni-Channel
platform is the middleware/SOA layer that works
in a “publish and subscribe” environment –
applications “publish” their interface to the
middleware layer at either real-time or near real-
time frequency and the other applications
“subscribe” to the middleware to access the data.
With the future being the Omni-Channel
platform – the middleware layer works as a
stopgap for now so that retailers can still utilize
legacy systems.
Q: Should mobile POS be a separate
application or an extension of the
existing POS application?
Kris: Mobile is most effective if answering
specific strategic business needs. When defined
and measurable, a mobile oriented
implementation can enhance service to the
customer, increase efficiencies of store
personnel, provide enhanced customer-facing
electronic shopping experiences in store –
alternatively, it can be a line-busting solution on
a tablet. Both models have utility to a given
subset of business scenarios and are each
potential strategy for a retail customer. Either,
depending on your business model, can be
something to increase customer stickiness,
enhance propensity to buy, increases margin,
etc. - again, business strategy will drive the type
of mobile experience needed. Providing the
infrastructure and appropriate application
experience is the challenge for your partner or IT
team.
Integrated solutions are good because they
provide a more seamless experience for store
personnel. This is generally easily deployed with
a POS or as an accent to the existing POS quickly
and reasonably easily. The drawback is that you
remain constrained by the POS system’s
capability.
Effective mobile requires a mobile-oriented
mindset and customer focus with a different set
of success factors – speed of checkout isn't
paramount, the customer experience, cross-
selling, up-selling, rich media-enabled retail
experiences all can greatly enhance the
shopping experience. A custom approach with
integration is far more effective at addressing
the unique capabilities and demands of a mobile
POS experience.
“Retailers need one
version of the truth”
– Ken Morris

3. A CONVERSATION WITH BRP: The Future of Omni-Channel Retailing Page 3 of 4
Perry: Again, I believe the ideal state
is that the Mobile POS application is
an extension of the one POS
system. The system will be smart
enough to know when it is running
on a mobile device and dynamically
enable / disable features, functions,
and presentation format based on
the form factor. This helps reduce IT
and QA costs by having a single
application to manage, patch, deploy,
train on, test, etc. The drawback of a
single application is that some older POS
applications are not capable of being fully
adapted to mobile and as such must
be rewritten or replaced entirely. When this is
the case many retailers take the smaller step of
adding a mobile POS application as
a separate application. This can lead to
an incomplete and dissatisfied
customer experience and increased operating
costs.
Ken: I agree that the ideal state is that the
mobile POS application is an extension of the
existing POS system with the system smart
enough to know when it is running on a mobile
device and dynamically enable / disable features,
functions, and presentation format based on the
form factor.
Q: Should mobile POS replace all fixed
POS cash wrap stations in stores or
simply serve as an addition? And what
are the considerations for retailers?
Kris: Absolutely not – there are business models
where it makes no sense. Making the call
demands an assessment of your brand image,
the retail experience desired, sales process
workflow, and opportunities for technology
based improvement. There is less opportunity
for a mobile POS in grocery (yes, I know we see
it, but it's less common); it can make HIPAA and
PII compliance harder in pharmacy (though it has
shown great success in hospitals). Retailers need
to remember that despite the rampant growth of
mobile and honestly - a difficulty coming up with
a retail model that can't benefit from mobile -
there still remains challenges with management
and security. These devices represent a
significant investment and the mobile
nature make them a much higher risk level to
security, data loss, as well as hardware loss. This
gap is closing quickly, however, it remains
a challenge.
Perry: I see mobile POS replacing the vast
majority of fixed POS stations in the retail
environment. In the specialty store environment
it might be all but one. In the department store
it might be less, in a front line checkout
environment it will eventually be a hybrid with
some fixed stations and mobile stations that can
be used to dock mobile devices during peak
“Retailers of any size
will benefit from POS in
the cloud – the future of
point of sale is
virtualization.”
– Ken Morris

4. A CONVERSATION WITH BRP: The Future of Omni-Channel Retailing Page 4 of 4
times at the front line. The considerations for
retailers include: a much different TCO than
traditional retail-hardened POS, changing
support model, RF infrastructure, bandwidth,
monitoring tools, non-POS transactions
(accounting, BI inshore reporting scheduling
etc.), and most importantly - meeting
the increased set of customer expectations.
Q: What about POS in the cloud? Is it a
better option for smaller retailers or can
retailers of any size benefit?
Kris: I believe that POS in the cloud is not the
question - the question is public or private
cloud. Infrastructure is increasingly a
commodity. As such, we should have it in the
most cost effective location that addresses
business requirements. Public cloud is less
secure and as we've seen with both Microsoft &
Amazon, can be less reliable. Private cloud
represents many of the benefits of cloud without
the exposure. Technology is often seen as
cyclical and utility computing is again on the
rise. Historically POS implementations
represented a material investment, with cloud
services; it is far less a barrier to entry. That said,
private cloud brings more flexibility, greater
security, and at least for now, better
reliability. This is true for all retailers and will
become increasingly apparent in the coming
years.
Perry: POS in the cloud is already a reality and it
will continue to grow. The benefits include a
much lower operating cost, a much shorter
change and deployment cycle, and the ability to
quickly flex and grow at peak seasons
or during acquisitions. The drawbacks are that if
a company does not already have multi-tiered
applications and applications in the cloud there
is a development and operational learning curve
that must be accounted for. This type of POS
can fit the largest and the smallest retailers if
designed properly.
Ken: Retailers of any size will benefit from POS
in the cloud – the future of point of sale is
virtualization. Virtualization will happen once we
rethink the current decentralized environment
that has been the reality in retail for the past 40
years. Network advances have changed how we
should think about systems – the old
decentralized environment is out-of-date –
current network availability changes the way
retailers should think about centralization and
the cloud is an important piece of this. The
future of point of sale is beyond traditional point
of sale or mobile POS; it’s real-time retail – the
Amazon experience at the store.
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