Paul Constantine, president, ScanSource POS/Barcoding, 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, Constantine 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.
Paul Constantine, ScanSource: One of the things that I've noticed after coming back into this industry after spending three years in the security and surveillance business – and I think Jim's question really summarized it. He said “retail IT”; he didn’t say “POS.” We talk about where there's mystery there's margin, and it seems like the mystery in retail stores is moving away from the point of sale. There’s still some, but it's moving away from the point of sale and is transitioning into other areas of the retail IT experience. And the demand that places on the reseller channel is great. It's tough when you have to make that transition from being a point of sale reseller to a retail IT consultant and expert.
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?
Paul Constantine, ScanSource: Ultimately, our job as an entire community from manufacturers to distributors and resellers and integrators, is to give the end user what they want to be able to manage their businesses more effectively, to grow their businesses, through loyalty programs and such. Obviously, they want tablets, and since the iPad has the majority of share of the tablet market, the conversation does sometimes get myopically focused on iPads. What I would say is let’s spend our energy figuring how we can give the end users what they want.
Your job as a retail IT consultant is to make sure that they make an educated decision. So we as a community need to provide you resellers with the education on the different options that are available. If your customer still wants an iPad, then my challenge is to help you deliver that profitably and efficiently, so that your customer gets what they need to run their business, and you make money doing that. And manufacturers make money doing that. That's a challenge.
Another challenge is to be able to present you as a community with other options. Tablet-based POS is where it's going, and we need to be able to give you solutions around the tablet that take into account all the other peripherals, all the other options.
Those are the things that a manufacturer or distributor community is focused on right now, helping to give the integrators and dealers more efficient ways to deliver those solutions to give end users what they want to manage their business, and still be able to make a decent profit doing it.
So, to build on Ted’s comments, we can't avoid it. It's coming. We need to deal with it. We need to figure out how to deal with it and still make money and stay in business. That's all of our challenges.
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?
Paul Constantine, ScanSource: What really strikes me is that it's the merging of payment processing and the point of sale that's allowing this phenomenon to happen. Ten years ago, when you had ISOs selling payment processing and you had POS dealers selling point of sale, you didn't have the opportunity for this to become a challenge.
Now that ISOs are selling point of sale and point of sale resellers are selling payment processing, you can take that string of income or revenue from payment processing and use it to subsidize the point of sale system up front. What it really tells me – now maybe I’m just oversimplifying it – if you are a reseller and you want to try to compete with free point of sale, you've got to get involved in payment processing. The good news is it's a lot easier to have a reseller get involved in the payment processing revenue stream to deliver a fully integrated solution to their end user that’s not just the point of sale. It’s also the payment device and the processing. It's being able to take advantage of that revenue stream that's enabling the system to be subsidized. That’s the challenge for most of the resellers in this room.
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?
Paul Constantine, ScanSource: I would just add on to what Justin said, speaking for distribution. It amazes me the amount of resources that we all have in place to help you guys learn new technologies, to learn new solutions. And then we all sure feel those resources are underutilized.
Applying that to physical security, if you are in the audience today and are interested in adding video surveillance or physical security to become more of a retail IT consultant, lean on your distributors. Distributors have a lot of resources.
The vendors in that space also have a lot of resources. Some of the best industry training and education I've seen in my history of distribution is with some of the physical security video surveillance manufacturers. They’ve got some great programs. There are definitely resources out there to help you learn the technology, help you figure out exactly how to start selling it and what to sell.
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?
Paul Constantine, ScanSource: I think the biggest challenge that all of us have is our businesses keep us very, very busy on the day-to-day. What's happening today, what problems are your customers having today, and what internal things am I going to manage? The key to managing through a technology transition is forcing yourself into a discipline and spending time on expanding the view of either what technologies you can sell or what your customers really want.
Whether it's yourself or you delegate it to somebody in your organization, create time – force yourself to spend time – and hold yourself and people in your organization accountable for spending time on how to innovate, how to stay relevant, and how to sustain your business. It doesn't happen by osmosis. It's got to be a conscious decision and a discipline you force on yourself, or else it's hard to get it done.
To read other panel member's thoughts, visit the pages below: