UA Research Aims To Assist Retailers With New Technology

Researchers at marketing research firm Infogroup Targeting Solutions say 26 percent of retailers are already using mobile point-of-sale (POS) technology, a number they expect to triple by 2018.

Researchers at the University of Arkansas in Fayetteville are hoping to make that implementation as smooth as possible.

John Aloysius, associate professor of supply chain management, and Viswanath Venkatesh, professor of information systems, led the research to develop a risk-assessment tool to assist retailers in their mobile POS technology implementation.

Mobile POS is the ability for a customer transaction to be documented by a smartphone or tablet instead of by a traditional checkout register or other point-of-sale terminal.

Current technologies allow shoppers to register their bank or credit card accounts with a particular store, scan items at the store with their smartphone, and have those items charged to their account when leaving the store.

The appeal for customers is convenience. For retailers, it’s an opportunity for marketing and saving money.

How much money? Consider this staggering statistic: An additional second added to the process of ringing up a customer in one of Wal-Mart Stores Inc.’s 4,000-plus U.S. stores equates to an additional $12 million in cashier wages.

The number was published by MIT’s Technology Review in March 2012 for a profile of Walmart executive Mike Cook, titled “The Most Powerful Man in Payments.”

Cook is a senior vice president and assistant treasurer for Walmart, responsible for deciding what technology gets used in Walmart checkout lines.

Numbers like that show why Walmart and other large retailers are being so thorough in their research of mobile POS technology.

Aloysius said the emerging mobile POS technology, once thought unrealistic, has become very real.

“Eighty percent of all retail is considering using one form of it or another, and 30 percent have already deployed at least pilot projects,” he said.

 

Unique Solutions

The Reuters news organization reported in September 2012 that Walmart conducted mobile POS testing at a Supercenter in Rogers, looking for ways to speed checkout times by integrating mobile devices into self-checkout.

Reuters said smartphone-toting employees and their friends were asked to participate in the testing of a new “Scan & Go” shopping application, which reportedly lets shoppers scan items with their iPhones and then transfer the information to a self-service checkout station, thus eliminating both wait times and the need to scan items at the register.

Like Walmart, most retailers are continually testing new ways to serve their customers, but there is no one-size-fits-all when it comes to mobile POS technology.

At the UA, researchers developed a template designed to help retailers find unique solutions best suited for each of them.

The research, according to a news release, helped identify challenges presented by mobile POS systems at each stage of a purchase — scanning, payment and validation — from five perspectives: technology, employee, retailers/store, product and customer.

Several challenges were identified in the research, with main concerns being wireless failure and limited battery life within a technology area, fear of layoffs among employees, adapting the technology and resisting the change among employees and increased technology and equipment cost for the retailer.

Representatives of the Retail Industry Leaders Association, who commissioned the study, say the UA research is the most comprehensive of any on a retail innovation, and that the template is a useful tool available to retailers to help them determine which mobile POS technology is best for their company, and how to design the processes for it.

 

Privacy Concerns

Perhaps the most important challenge identified by the UA research was in the area of customer risk.

They found most customers dislike the collection of personal and credit card information through mobile devices, and are worried that a retailer’s database could include errors and inaccuracies.

Customers are also concerned with the possibility of hackers or unauthorized personnel accessing their personal and credit card information.

Identifying and addressing these concerns indicate it may take time to fully adopt mobile POS technology.

It is also not clear what security measures are in place for mobile POS technologies — i.e., deceitful shoppers who “mistakenly” fail to scan an item before slipping it into a bag in their cart.

However, if and when those concerns are addressed, Aloysius said there are significant advantages to be gained.

“There are tremendous benefits to be gained from mobile shopping, including the ability to engage with customers while shopping and influence buying decisions,” he said. “But the associated privacy issues need to be carefully examined because they could cause strong customer rejection.”