Ted Clark, global business partner channel leader, IBM Retail Store Solutions division (now part of Toshiba Global Commerce Solutions), was one of the members of the Industry Vision Panel at RetailNOW 2012, which took place July 29-Aug. 1 at Mandalay Bay in Las Vegas. The panel was divided into two segments, a hardware-focused group and software-focused group, and was moderated by Jim Roddy, president of Jameson Publishing and Business Solutions magazine. As part of the hardware-focused group, Clark shares his thoughts below on many of the different topics impacting the POS industry today that were discussed at the panel.
“State Of The Industry”
Jim Roddy, BSM: Talk about the landscape you’re seeing today in the retail IT industry. Give us the state of the industry from your perspective.
Ted Clark, IBM (Toshiba): Steve nailed it. That's exactly what we see. And if I could sum it up in one sound bite, the nightmare that keeps retailers up at night is that they do not want to be the showroom for Amazon. They really want to go focus on the consumer, make that consumer experience very enjoyable and have value.
The consumer wants to interact with the retailer either in the store or through the web or through social media or through a call center, and they want the retailer to recognize the relationship they have regardless of the channel that they're operating in. Most of them, I think it's about 70%-75% of people, will operate with a retailer in multiple channels. They don't want the consumer coming in, shopping around, and then all of a sudden going out and trying to see where the cheapest price is.
The iPad Impact On The Retail Channel
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.
The Debate Surrounding Free POS
Jim Roddy, BSM: I’ve been told by some folks in our industry not to ask this next question. They said, “Don't touch this point. It's just too much of a hot-button in our industry.” But since it hits a nerve, I think we need to talk about it. The topic is free hardware. From your perspective, are vendors who are offering free hardware, are they wrecking the POS channel or are they leading the charge of what's coming?
And then, are resellers who participate in free hardware programs gaining a competitive advantage or are they shooting themselves in the foot. Or, as some folks think, are they shooting themselves in the head?
Ted Clark, IBM (Toshiba): Anything that's unknown or different always causes a certain fright, and to raise a point, this business model has been around for centuries. When Apple made the iPhone 4S available and with it making Verizon a carrier in addition to AT&T, Verizon sold a ton of Apple iPhones for $200 which Verizon bought at $600.
But in the end, some number of months later, that financial equation will balance out in favor of the provider. You get a free razor, you buy the blades. You get a free printer, you buy the ink. You get a free chariot, you have to buy the horses, right? It's been around forever. Think about basing your own business model on how you could combine things.
The key point is about value. What is the whole value that brings to the table regardless of how it's packaged. And can you find something that you can add to the value or provide better value? That's where your energy really should be.
Jim Roddy, BSM: Almost everyone in this industry I've talked with has seen a trend towards selling beyond point of sale and providing a total solution for the customer. I just heard in the RSPA (Retail Solutions Providers Association) board meeting Saturday that this organization is focused mostly on about 20 feet away from the entry door to a retail customer, and we need to expand beyond that.
Two technologies beyond POS are security, such as video surveillance, and also digital signage. What one piece of advice or what one pitfall to avoid would you give to the resellers in the audience in regards to these technologies?
Ted Clark, IBM (Toshiba): We have a lot of experience in implementing loss prevention solutions. A decent sized grocer did not have Kleenex in their SKU. The cashier would scan it and nothing happened. The cashier said, "Well, a box of Kleenex is like this little bottle of antibacterial hand sanitizer” which is right by the cash register. So she scanned that. And then they just kept on doing it. All of a sudden, tons and tons of hand sanitizer were showing up and no Kleenex was showing up.
They used video surveillance and caught what the cashier was doing. There’s lots of opportunity there. If you don't have that capability, you can partner with us or with other companies that are in this business, and you can either buy video equipment or subcontract to get into video surveillance.
Jim Roddy, BSM: Everyone is concerned about channel sustainability. (Retail Solutions Providers Association CEO) Joe Finizio was talking about it this morning. You can wring your hands about it and fret, or you can do something about it. What actions would you say a reseller needs to take today to make sure that their business is relevant and thriving five years from now?
Ted Clark, IBM (Toshiba): I'm going to give a little different version of this. It's the value that the RSPA brings. The RSPA is so unique and so wonderful – it's really inspiring. Look at this room now versus when I first came here seven years ago for my first RSPA Convention. It was like the Knights of Columbus Convention. For those of you who don’t know the Knights of Columbus, just ask your grandparents.
Look at this room – the diversity in the room, the age diversity in the room. We all have a responsibility to keep this industry going. Us veterans have a responsibility to mentor the younger, newer people. And the newer people, you have a responsibility for teaching the veterans new things that we don't know.
Jim, you had put me in contact with an ISV from Europe (COMBASE) who wants to expand into the United States, and I had breakfast with them this morning. And these two young people, they were born after I started at IBM, and it was great to see their enthusiasm.
I travel around the world, and no place outside of North America has the benefit of this kind of organization. From an industry point of view, our ability to network together and for competitors to put our boxing gloves away is really, really important to the growth of the industry. We share, we treat each other well, and we learn from each other for the future generations.
To read other panel member's thoughts, visit the pages below: