From The Editor | August 21, 2012

Executives Discuss iPad Impact On Retail Channel

Approximately 450 retail IT executives attended the Industry Vision Panel discussion at RetailNOW 2012, which covered a wide range of channel topics. This year the panel was divided into two segments, a hardware-focused group and a software focused group.

This excerpt includes the hardware-focused panel’s discussion of the emergence of iPads in retail.

Jim Roddy, BSM: An article published on the Business Solutions magazine website was titled, “Are You Tired Of Your Customers Asking About iPads?” It received close to the most reader comments we've received on any article posted on our website this year.

How much will iPads impact our channel? Is it going to damage it? Is it going to enhance it? Should resellers – some of them are fighting iPads – should they stop fighting and just join them by selling software that runs on iPads?

Ted Clark, IBM (Toshiba): I'm going to quote the great retail industry pundit next to me, Steve Cuntz, from last night: "Keep your eyes on the road, and your hands upon the wheel because I hear the train a comin’, and it's comin’ round the bend." This is going to happen. There is just way too much momentum to have tablets – and let's not go use the word “iPad” to describe every tablet like we use the word Kleenex to describe every tissue.  You have tablets into the retail industry. Lots of vendors, we’ve seen them here. There are lots of things to be worked out from this technology from the point of sale because it is portable. You can walk away with it. You need to recharge it. It needs integration – a lot of things.

As the industry comes together and we see what the market brings, tablets are definitely going to be a part of the point of sale equation. Is it going to totally replace the register? Absolutely not. There are just things you cannot do with a tablet that you really are be able to do better with a register.

My angle on this is leading back to the consumer. We do a lot of primary research in our business, and 98% – almost all – 98% of retail executives have said, "The battle in retail is now won at the consumer." That's where the battle is.

Once the consumer gets to the point of sale, that's when it's too late to win them over. You have to win them over earlier in the customer experience. Taking tablets and enabling retail associates to have a more meaningful or valuable interaction with the consumer, and having the ability for the retail associate to know something about the consumer when they walk in the store versus at the point of sale when they walk out is hugely valuable.

I will also say that the companies, both large and small, who can really figure out how to do the system management around these devices, because these are not cash registers bolted to the top of a cash rack. These things walk around wirelessly and need some work and maintenance. Companies that can do systems management around it are going to do very, very well.

So, it's coming. I would not fear it. You guys know the value of a traditional point of sale versus mobile equipment. Learn both; don’t be afraid of it. Have the conversation with your customers on it. “If you do mobile here's what you get. Here are the blessings; here are the curses. And for the point of sale, here are the blessings. Here are the curses.” I bet you in most cases, it's going to be a nice, healthy combination of both.

Paul Constantine, ScanSource: Ultimately, our job as an entire community from manufacturers to distributors and resellers and integrators, is to give the end user what they want to be able to manage their businesses more effectively, to grow their businesses, through loyalty programs and such. Obviously, they want tablets, and since the iPad has the majority of share of the tablet market, the conversation does sometimes get myopically focused on iPads. What I would say is let’s spend our energy figuring how we can give the end users what they want.

Your job as a retail IT consultant is to make sure that they make an educated decision. So we as a community need to provide you resellers with the education on the different options that are available. If your customer still wants an iPad, then my challenge is to help you deliver that profitably and efficiently, so that your customer gets what they need to run their business, and you make money doing that. And manufacturers make money doing that. That's a challenge.

Another challenge is to be able to present you as a community with other options. Tablet-based POS is where it's going, and we need to be able to give you solutions around the tablet that take into account all the other peripherals, all the other options.

Those are the things that a manufacturer or distributor community is focused on right now, helping to give the integrators and dealers more efficient ways to deliver those solutions to give end users what they want to manage their business, and still be able to make a decent profit doing it.

So, to build on Ted’s comments, we can't avoid it. It's coming. We need to deal with it. We need to figure out how to deal with it and still make money and stay in business. That's all of our challenges.

Justin Scopaz, Ingram Micro: We’re saying it's coming, and I think we would all agree it's here. And Ted's comment around managed services, that is a very important, critical aspect to deployment. I think there is a need for an opportunity for both of them to exist. I don't think they're going to be displacing all of the traditional point of sale systems, but I agree with Paul that it's our job as a distribution network and manufacturing partners to help you understand what the opportunities are.

And it seems like there's a lot of negative energy being put into tablets, and I think taking some of the energy and putting it into how to solve this thing, how can we create incremental partnerships is probably the way to go.

Ray Carlin, HP: I think it's important to think about this at the subsegment level also. I think the adoption of tablets is going to be different (for each segment), so while we are thinking about serving our customers, we need to also think about what environments they're in and just a lot of business process changes in addition to the technology and management, such as the security issues which are real.

There are some business process challenges that folks that have already experimented with or piloted tablet devices have come across. But make no mistake about it, it's going to be a significant part of the overall point of sale mix. I agree we need to embrace it.

Steve Cuntz, BlueStar: I was thinking about something like this last night in the Minus5 Ice Bar (where everything is made of ice). I hadn’t been in there before and I was thinking, “I wonder what it's like to freeze to death?” Because at first it doesn't feel too bad. I'm an outdoorsman; I can handle this. It's not too bad.

You know there's a lot of people who die that way. Complacency or not accepting of the change in the environment is not a good survival strategy, and it would do this industry good to sit down and disseminate the opportunities that are there. For example, if you offered in a bundled package these types of mobile devices, dealers may not know that the carriers will offer you a monthly contribution for every month that that activation occurs.

If you're operating in a cloud environment, not only do you have an opportunity to get recurring revenues with the cloud services, you have an opportunity to get revenues off of activation of broadband. Something to think about.

The hardware-focused panelists included:

  • Steve Cuntz, Chairman/CEO, BlueStar
  • Ted Clark, Global Business Partner Channel Leader, IBM Retail Store Solutions division (now part of Toshiba Global Commerce Solutions)
  • Paul Constantine, President, ScanSource POS/Barcoding
  • Ray Carlin, VP and General Manager, HP Retail Store Solutions Global Business Unit
  • Justin Scopaz, General Manager and VP, Ingram Micro Data Capture/POS division
  • Moderator: Jim Roddy, President, Jameson Publishing and Business Solutions magazine

RetailNOW was held July 29-Aug. 1 at Mandalay Bay in Las Vegas. For more information on RetailNOW 2012, including more excerpts from the Industry Vision Panel, go to www.BSMinfo.com/InsideRetailNOW.

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