Q&A

RetailNOW 2015 Panel Details How To "Compete In Changing Times"

jim roddy

By Jim Roddy, VP of Marketing, RSPA

Sterling At RetailNOW

Change was not only in the air at RetailNOW 2015, it was on the agenda, the stage, the literature, the signage, and it boomed across the sound system in the general session and in seemingly every breakout room. One education session that laser-focused on this topic was “Creating The Right Business Model to Compete in Changing Times,” held Tuesday, Aug. 4.

The session featured a panel discussion among three retail IT channel veterans: Rich Peterson, president at RCP Enterprises and former owner of VAR Abacus Business Solutions; Chuck Prince, VP of operations at NCC; and Paul Hunter, president at Sterling Payment. The panel was moderated by Mike Seymour, COO at solutions provider Postec and RSPA Chairman of the Board.

The 50-minute discussion centered on the as-a-Service business model, the ongoing impact of payments on the retail IT channel, payment security including EMV and PCI, and the increasing need for consultative solutions providers.

I scribbled several pages of notes during the discussion and wanted to share those highlights with you:

  • Hunter: You have to change your business model. Moving to SaaS (Solutions-as-a-Service) and recurring revenue is critical. If you try to save your business but you’re giving away your core, you’ll drive it into the dirt. You have to provide additional value, not give everything away.
  • Peterson: This is a messy, noisy business. People (clients) ask you a lot of questions which take up a lot of your time. If you can put that information on your website, you can reduce that bad noise. Put the bad noise you can’t charge for on the web and spend time where you’ll make money.
  • Prince: What separates the successful POS reseller is being consultative. We know restaurants. If we’re just hawking POS, we don’t have value to add. We can sell our industry expertise to the merchants.
  • Hunter: The POS industry is following the same path as the payments industry. Margins have been declining for years. While processing margins decline, fees have gone up. You have no choice — to survive you need to find new revenue for your business and new revenue for your customers. I was a merchant for 14 years. We will gladly pay for things that make us more money.
  • Peterson: In the end, you’re a consultant and you’re trying to help your customer make money. Less than 30 percent of the hospitality industry utilizes gift cards. This will make your company and your merchant more money.
  • Prince: If we are to become experts, we have to take the training that’s available to us.
  • Peterson: (talking about EMV) The customer’s going to get whacked whether you’re there or not. You need to offer them the service of guidance.
  • Peterson: POS isn’t for the faint of heart. Those big guys (who are acquiring VARs) will need to fight us on our turf.
  • Hunter: This industry can thrive if they move up to larger merchants because they will pay for those services. The number one thing those merchants look for in a partner is honesty.
  • Hunter: What has kept this industry profitable is the payments industry. Datacap helped fight attrition and got resellers into recurring revenue.
  • Prince: It’s amazing the number of choices out there. Before you decide, you have to ask what the priority is at your business. Does it align with the priority of that vendor’s business? If you want to move to SaaS, you need a vendor that has a SaaS offering.
  • Prince: We’ve been “doomsdaying” about recurring revenue at some level. There’s a lot of recurring revenue models related to services, but what about the hardware? SaaS is somewhere to get to, but it’s not just a finance program. It’s a relationship. They pay for the value you bring them — your advice. You need to be invested in making the long-term relationship successful.
  • Peterson: We don’t sell POS. We sell stronger P&Ls (profit and loss statements). You need to push that through your culture so everyone understands.
  • Hunter: PCI is a never-ending and ever-increasing-in-importance issue. A very small POS reseller can get into a very large problem if they don’t follow the protocols.
  • Hunter: There’s more noise in this industry today than in the 10 years I’ve been coming to this show — especially with EMV. It’s just a liability shift and it will mostly affect merchants who sell things people want to buy and resell.
  • Peterson: I’d be excited about EMV. How can I get out and teach people about EMV? I have to help that restaurant understand what they need to do this year and next year.

For more articles on RetailNOW 2015, held August 2-5 at the Gaylord Palms Resort and Convention Center in Orlando, and the Retail Solutions Providers Association (RSPA), go to www.BSMinfo.com/go/InsideRSPA.