Blog | August 15, 2013

Retail Channel Wake-Up Call

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By Mike Monocello, editor-in-chief, Business Solutions magazine
Follow Me On Twitter @monocello

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By the time you read this, RSPA (Retail Solutions Providers Association) RetailNOW 2013 will be a couple months past, but odds are that the challenges talked about at the event and facing the retail IT channel will still be present. Indeed, a few things either became apparent or were confirmed during RetailNOW.

Mobile POS Is Hot, And At The Same Time, Not
There’s still a ton of hype and interest in mobile POS. Studies show that retailers are interested in mobile POS and plan to deploy it. Stories from retail IT VARs confirm that the interest is real. However, that’s where mobile POS seems to end — at the interest stage. Purchases and actual deployments are difficult to find.

The reality thus far seems to be that when it comes time to evaluate mobile solutions and pull the trigger, it either doesn’t happen or the merchants quickly discover that the tablet solution isn’t quite what they’d hoped for.

All of this isn’t to say that mobile POS will never happen. In fact, I’m a firm believer that mobile POS is a trend that’s sure to happen. However, before the technology reaches maturity and widespread adoption, we need to see some settling on hardware (Is an iPad really the best piece of hardware? If not, what’s the best alternative?) and software (Too many new companies and products have clouded the market). Beyond that, wireless infrastructures need to be improved for many retailers before a reliable mobile solution can be put in place.

While all this is being sorted out, the best thing retail IT VARs can do is continue to stay informed on the trends, not only for themselves but also to speak intelligently to customers who have questions. The second you can’t address questions from customers on this topic, or look like you’re dodging the topic, your trusted adviser status takes some damage and customers begin looking for answers elsewhere (i.e. your competition).

The As A Service Model Is A Journey, Not A Destination
I moderated a panel at RetailNOW on the topic of transitioning to the “as a service” model. During the almost two-hour-long discussion, a lot of information was covered — remote monitoring and management, sales and marketing, cash flow, etc.

In retrospect, I think some of the stuff we covered came across clearly and some things were maybe a little less clear.

For instance, in speaking with attendees at the event, I found many are still hung up on the definitition of “as a service.” Some came up to me and said that they are on this model because they sell maintenance and service contracts. Great! But that’s a small sliver. The way I want the retail channel — actually, any IT VAR — to think about this model is to bundle all of the hardware, software, and services they sell and charge customers a monthly fee for them.

What’s important to note here is that I don’t expect you to get every customer on this model. In fact, successful VARs on this model say how difficult it is to convert existing customers. So, maybe you begin by getting only new customers on this model. Maybe just one a month to manage cash-flow issues. No matter what, the goal is to get as much of your business switched over to a recurring revenue model. The more business you have on this model, the better off you’ll be.

A point that was made during the panel, but not driven home, was that you cannot expect to be successful with the as a service model by just selling your bundles like the same hardware/software/service but on a monthly payment plan. Put more simply, your value proposition can’t just be a monthly payment. Smart, financially sound customers will look at the numbers and know that they’re paying more on the as a service model in the long term.

Rather, you must identify, create, and employ valueadded services and know how to convincingly convey such value-adds to customers so they understand that the monthly payments are not just convenient, they’re beneficial.

The retail IT channel faces a lot of challenges and has a lot of questions to be answered. The good news is that there’s more opportunity than ever, and this group of IT professionals has proven that it’s able to adjust with the times.

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