Magazine Article | January 14, 2014

Is Tablet POS Ready For Prime Time?

By Brian Albright, Business Solutions magazine

Keep your tablet point of sale options open and flexible, or risk missing out on new business.

Tablet-based and other mobile point of sale solutions are quickly gaining ground in the POS market. According to a report published by the Mobey Forum late in 2013, mobile POS is projected to have a 46 percent market penetration by 2017, up from 17 percent in 2012.

Resellers are adapting to this trend by offering tablets as add-ons to existing, traditional POS systems (which can generate add-on revenue), or as stand-alone POS solutions in smaller businesses (which may have passed on POS deployment before). “While some lower-end tablet POS applications are designed as a cash register/card terminal replacement, there is a handful of tablet POS vendors that combined a tablet user interface with powerful back end management features accessed through the cloud to offer a viable replacement for traditional POS solutions for small to midsize retailers,” says Kevin Kogler, president of MicroBiz.

Retailers operating traditional storefronts may deploy these devices on the sales floor, while those operating in a variety of locations (trunk shows, trade shows, mobile carts, etc.) rely on tablet solutions as their primary POS system. “Ultimately, the choice comes down to a balance of how complex their inventory needs are, what level of data integration they need with other software such as QuickBooks, and what form factor works best for their business footprint,” says David Vieregg, emerging channels sales and marketing leader at Intuit.

However, resellers who don’t yet offer a tablet solution should evaluate their client base as they make the transition. Mobile POS isn’t for every retailer right now, and most will want a mix of options.

“Going 100 percent mobile isn’t a step that many businesses are prepared to take just yet,” says David Gosman, CEO of pcAmerica. “Logistically, there are a lot of moving parts to consider: how to make mobile associates and checkouts identifiable, where to bag items, how to control traffic in the store, and how many devices to have out on the floor at once. Done properly, a mobile checkout means more floor space for displays and merchandise, less waiting, and higher sales numbers. But if the rollout doesn’t go well, it could mean frustrated customers who leave the store without completing their purchases.”

Complexity And Features Vary
In most vertical markets, there are at least a few viable tablet POS options available, but the complexity of these solutions varies. Some can match the feature set of a more traditional POS offering; others are more limited. “Enterprise-grade business intelligence is important,” says Lisa Falzone, CEO of Revel Systems. “Many tablet apps can only give you less functionality, not more. It’s important to know that a company can provide quality backend analytics for tier-one merchants, and that your SMB can get this functionality as well. Sales, inventory, and labor reports represent the tools that really help businesses thrive.”

The interface should be clean and large enough to display all of the necessary information. In high-volume settings like grocery stores, gas stations, or big-box retail, tablets may not be a good fit because of the limitations of the form factor.

Inventory needs are also important. The more detailed the requirements for inventory detail, the more robust the solution has to be. If the retailer wants to track a lot of customer information, those requirements should be taken into consideration as well.

Resellers should consider the need for mobility at the retailer. For example, does the retailer operate temporary remote stores or benefit from taking payment from the customer anywhere in the store/restaurant? Is the business too complex to be managed through a smaller screen tablet? The retailer also has to have the necessary network connectivity for the tablets and reliable Internet access for cloud-based solutions.

Subscribe to Business Solutions magazineIf the network connection goes down, the solution should also offer an offline mode. “The system should be able to operate if the Wi-Fi goes down; otherwise a business could lose hundreds of dollars or more during the outage,” Falzone says.

The solution also has to be open enough and flexible enough to grow with the business and incorporate new functionality as requirements evolve and as new computing platforms emerge. “Not having these platforms or the flexibility to incorporate them in the future could seriously hinder a company’s growth and ability to compete with the better-equipped solutions that will inevitably come to market,” Gosman says.

That flexibility also includes support for scales and other peripherals like bar code scanners and PIN pad readers. iPads, for example, may lack the required ports, and rely on a proprietary Bluetooth interface for wireless connections. “However, Android and Windows-based tablet manufacturers have introduced rugged tablets with more available port to integrate peripherals, so there are now many viable alternatives to the iPad,” Kogler says.

Falzone adds that new tablet models may actually offer an advantage when it comes to peripherals. “It’s often easier to connect to peripherals with tablets than with PCs, and the wireless and Bluetooth options can result in a cleaner appearance at the front of the house,” she says. “In fact, tablet POS systems have the ability to connect to multiple peripherals, such as kitchen display systems and digital menu boards, creating a better customer experience and operational efficiencies.”

Resellers should carefully evaluate all hardware and software to ensure that retailers have the options they need. “If your focus is on simpler, lower-revenue installs, this shouldn’t be an issue,” Gosman says. “But if you are trying to capture a wider customer base, not having the capability to integrate scales, pole displays, and other peripherals is certainly going to be a problem. That’s why it’s important to choose your system carefully. Sometimes the tablet POS systems that look the coolest or have a lot of buzz aren’t the most functional.”

The solution should also be viable for retailers who are taking a more holistic approach to POS that incorporates controlling multiple locations, managing customer loyalty programs, providing more detailed business analytics, and accepting multiple forms of payment. “Having both [a PIN pad and mobile card reader] allows the retailer to meet the customer where they are (whether in the aisle or on the road) and allows a retailer to expand their reach beyond just a brick-and-mortar location,” Vieregg says. “Another key element is having a system that has payments or accounting integrated because that saves the retailer reconciliation time on the back end.”

Keep Card Data Secure
PCI standards for mobile payment scenarios are still under development, but the PCI Council has recommended that mobile POS solutions use point-to-point encryption (P2PE), that the solutions not store card data, that the mobile devices be password protected, and that all software should be updated and current. “So, sensitive card data is never touched by the tablet POS system, and the retailer is not subject to PCI requirements,” Kogler says. “Although you must make sure to have the credit card swipe encrypted properly, well-designed tablet POS systems do not create any specific security concerns. In fact, this is more secure than traditional POS systems that store unencrypted card data in the application.”

However, because the standards are still under development, merchants have to ensure that their software is PCI-compliant and that card data is secure. Resellers should educate their client base about the security of their mobile offerings. “Many small merchants are not aware of the responsibility and will just use the system as is, which usually turns out fine, but could open up risk,” Gosman says. “It’s a big responsibility and one that should be taken very seriously, because a lapse in security could cause irreversible damage to a business.”

The devices also need to be physically secure, which means end users should be trained to keep track of them, and a remote-wipe feature is available for lost or stolen devices. “Tablets are smaller, more light-weight and oftentimes not secured to a desk in any way, which can make it easier for someone to walk off with them,” Vieregg says.

More Than Just A Smaller POS
According to the companies interviewed for this story, the most important thing for resellers to remember about tablet POS solutions is that they aren’t just slightly smaller versions of a normal POS. “To be successful, a POS developer almost needs to start from scratch to create screen designs that hide the complexity by showing less information on each screen while creating intuitive and easy ways to get to the additional information,” Kogler says. “VARs would be wise to investigate whether a shrunken version of a traditional POS software product has the same functionality as a new cloud/tablet POS specifically designed for a tablet-sized screen.”

Although some customers may want tablet solutions because they think they are less expensive, experience has shown that robust tablet-based systems wind up costing about the same, once you consider specialized hardware, planning for security, and creating plans to replace broken, damaged, or stolen devices. And don’t overlook more complex solutions just because customers may want a particular brand of tablet.

“Although we all want to make our customers happy, this isn’t always the best decision,” Gosman says. “Point of sale technology is changing so quickly that businesses that choose these simpler options may find themselves stuck with technology that will limit their operations in the future.”

Software will play as big a role as the hardware involved because users need the right functionality, connectivity (for networks and peripherals), support, and credit card processing capabilities. Some tablet POS systems also utilize third-party payment gateways that add fees, which may not be acceptable to customers.

“I think the main thing for VARs and integrators is to ensure that they really understand their customers’ needs as it relates to inventory, data integration, customer management, and how much flexibility the retailer wants to manage their business,” Vieregg says. “Knowledge of those three things will help the VAR aid the retailer in selecting the right system.”

Don’t neglect profitability. Select a system that can offer a decent margin, too. “You will be spending time learning, selling, and supporting these packages,” Gosman says. “You deserve to earn a high margin.”

Kogler adds that tablet POS solutions will be more in demand by customers, so VARs have to be prepared with robust mobile offerings that are secure and highly functional. “There are too many fundamental advantages to cloud-based architecture and mobile devices for the trends to reverse back to ‘traditional POS systems,’” Kogler says. “VARs need to stop trying to fight the trends and instead devote time and energy developing expertise with tablet and cloud POS solutions.”