Retail IT Leaders Predict Bright Future For (Some) Resellers

The Industry Vision Panel discussion at RetailNOW 2012 attracted approximately 450 retail IT executives and 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 software-focused panel’s “state of the retail IT industry” from their individual perspectives. The software-focused panelists included:

• Ed Chapel, Sr. VP of North American Distribution, MICROS Systems
• Michele Cote, President, Posera Software
• Kathleen Curry, VP of North American Channel Sales, NCR
• John Giles, Founder and President, Future POS
• Jeff Riley, CEO, Dinerware
• Moderator: Jim Roddy, President, Jameson Publishing and Business Solutions magazine

Jim Roddy, BSM: Talk about the landscape you're seeing from your perspective today in the retail IT industry – your “state of the industry” in 60 to 90 seconds. Let's start with John.

John Giles, Future POS: It's probably more challenging than ever. I've seen this industry evolve more in the last three years than it probably did in the 10 prior. I've seen the merging of the POS segment with payment processing, and I've always said that that was just inevitable when Mercury started paying residuals and encouraging POS resellers to push credit cards. It was just inevitable that eventually the payment processing side would push back. I see these two things merging.

You've got the $50 a month point of sale system – that's a challenge that a lot of people in this room are dealing with. You'll have to sharpen your game in order to figure out how you can compete with that. But like Steve (Cuntz from BlueStar) in the last panel said, the only constant is change, and I think you just have to keep evolving with it if you don’t want to become a dinosaur.

Michele Cote, Posera: I've seen a lot of changes in the past three years, especially involving mobility. We introduced our first mobility solution about 10 years ago, and since then it's been used by, I would say, probably close to 70% of our customer base in Europe. For whatever reason, multiple reasons, it wasn’t like that in North America. But now with new devices such as the iPad and everything, I can see that there’s a place for mobility, not only as a POS solution but also as a payment solution. And in the arrival of new mobility solutions that are available, the smartphone will probably change our industry for the next few months or the next few years.

Another big thing that we saw in our industry was the arrival, like John just mentioned, of credit card processors. That's changing the way we sell a system. That's changing the way we get our living from. But again, it's changes. I'm not too worried about it. But when I hear “free POS with software,” it's scary a little bit, but we will always find a way to get by against the competition.

Kathleen Curry, NCR: The economy has been tough on retail as well as other sectors of business, but certainly I think that there's a bright future in retail. Most retailers today are still looking to IT to develop their growth strategies from now until 2015, and what I think is challenging for these retailers right now is they've embraced certain types of technology to bring costs down in their business, to drive revenue growth, or something else.

But their real challenge for today is how to continue growing those revenue streams and meet the demanding needs of the consumer – understanding how the consumer wants to interact with them. How do they implement IT solutions that are going to drive their businesses in conjunction with addressing the fact that their consumers want to interact with them in multiple different types of channels?

They're going to have to address those needs, and I think that's a big opportunity for this community. I personally think it's a bright future and very exciting, but we all have to invest in it as well.

Ed Chapel, MICROS: As Kathleen said, fortunately our end users still need us. They still look to us for bringing a competitive advantage to their business. They're still spending money on that to bring customers in to their business and to bring more dollars to the bottom line.

From a channel perspective, there are certainly rapid development tools that are out there now and the merging of technologies that result from that, and the number of competitors that come from that. There's a lot of decisions to be made, and it's obviously a rapidly changing landscape.

Coming into this RSPA, our competitive matrix that we maintain – there's 36 POS competitors and 8 strictly iPad-based competitors. That's a good thing. That's good for RSPA. It's good for the industry. It's competition. There are a lot of decisions to be made in that landscape, and whatever the picture is today, I will also say, "Stay tuned. It'll be a different one next year."

Jeff Riley, Dinerware: I think with any industry, defining the landscape often comes down to looking at defining moments that reshape that industry. For the book retail industry, it was Amazon's Kindle and the availability of e-books, and for video rental business, it was Netflix coming on board and now Redbox.

You look at our industry, it's a little bit different because while there is a consumer technology play here with smartphones and tablets, which has really been an asset and benefit to all of us because it increased our customers' awareness of what's possible, and it has given them more comfort in adopting these new technologies. While there are threats because those devices can cannibalize our hardware that we make money from, the reality is it creates opportunities for innovation, and that's a good thing.

I think that we're at the beginning of this. The interest levels are high. The fear is high because the level of uncertainty is high, but the reality in terms of behavior shift and adoption is still very low. It's so truly a point in time where we have to be looking at all of these things happening and seek to understand before you draw a conclusion. Your energy is best applied towards understanding and forming a strategy rather than reacting and panicking.

I think the other thing is that if our dealer community is any indication – and I think you probably are representative of all of the vendor partner communities – it's hard to consider adding new service offerings and expanding your skills and experience based on your staff and bringing your business into a broader set of offerings for your customers. So don't try to do it all at once. Really seek to have those discussions with customers and find out what you think is going to stick and what will resonate and where you could find and build value before you make major investments and commitments.

Jim Roddy, BSM: Jeff, I like how you worded that: “the fear is high because the uncertainty is high.” I've been here since Friday and I haven’t heard anybody who’s got it figured out for the next few years. And as you said Ed, "Come back next year. It's going to be different." That's going to be in an ongoing struggle. We have to try to get more certainty and try to get some clarity in our industry.

RetailNOW 2012 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.