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IHL Group Dissects Mobile POS “Hype” Featured

  • Written by  Fatima D. Lora


Mobile_POSAs more consumers use mobile devices, retailers are leveraging mobile applications to offer better service and more integrated shopping experiences. In fact, tablet shipments have increased by 38% in 2013, according to a study of North American retailers, titled: “Mobile POS: Hype To Reality.” In addition, 28% of respondents plan to adopt mobile POS in some form by the end of 2013. The report, conducted by IHL Group, also noted that the mobile POS market will surpass $2 billion in hardware/software sales during this year.

Despite this growth, 33% of retailers have no plans to implement handheld mobile POS devices within the next three years. This and other mobile POS use findings indicate “sober reality setting in,” according to the report. That reality is overcoming the effects of news and publicity concerning the mobile POS market.

Though mobile POS continues to receive “a lot of hype,” said Greg Buzek, Founder and President of IHL Group, "the vast majority of retailers are taking a slow and methodical approach to the use of mobile for POS. There are key operational issues in device and merchandise security, cash handling, payments, bags, customer service levels and traffic flow that must be worked through, or the use of the devices will be disruptive.”

The IHL Group report showcases the current state of mobile POS, the adoption rates of various retail verticals, and the shipment and installed base details by type of device — rugged handheld, non-rugged handheld, and consumer-level tablets. In addition, the study provides forecasts for shipments and the impact these devices may have on the use of traditional POS hardware.

“Overall, the data we see in this study leads us to believe that retailers have slowed their aggressive deployments planned a year ago,” said Buzek, in an interview with Retail TouchPoints. “For the most part, this slow-down is caused by retailers that have deployed the technology and now are focusing on the problem-solving phase of getting the devices integrated into their operational plans.”

Though retailers continue to invest in mobile technology for brick-and-mortar stores, the use cases are moving beyond mobile POS: IHL Group estimates that approximately 45% of retailers are adopting mobile devices in stores, according to Buzek, but only half of those deployments will be leveraged for mobile POS purposes.

In his discussion with Retail TouchPoints, Buzek also shared these study conclusions:

  • Mobile is part of an overall shift in software strategy aimed at establishing a single cross-channel transaction logic and platform;
  • Mobile POS devices will cannibalize 12.4% of traditional POS shipments by 2016 across North American retail. Traditional POS shipments will not decline, but will grow less quickly; and
  • Retailers spend millions of dollars annually on security systems and cameras ― as well as on printers, cash drawers and security tags ― that are tied to POS, but much of this investment goes out the window with mobile. 

As with any new technology, there will be many successes and failures in the coming years, added Buzek. “It seems clear, however, that those who take bold, well-thought-out and decisive actions to embrace the power of mobility will reap great rewards. Those who choose to ignore mobility certainly will suffer as smartphones, tablets and other mobile devices become more and more pervasive in our connected culture.”
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