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Will Apple Tear Down the Retail Point of Sale?

By: 18 January 2013

I recently contributed a column to Business Insider that has lots of overlap with this blog. So in the spirit of cross-pollination, an excerpt is below and you can read the whole thing here.

The gist is Apple’s directions in mobile commerce: It won’t be NFC or other streamlined POS integrations that everyone loves to speculate about. Apple is rather moving towards a world where the mobile device you carry with you to the store is the POS.

This relates to showrooming but is totally different. Essentially it will enable roving transactions throughout a given store, rather than the decades-old bottleneck that is the check-out aisle. Apple’s own retail stores and little-known payment app are a glimpse into that future, extended to the greater retail universe.

There are lots of hurdles to get there, but the evidence points in that direction so far. We’ll continue to follow this closely.

The iPhone 5′s lack of NFC integration, though it was overshadowed by Mapgate, surprised many in the wake of its launch last year. But the omission starts to make sense when you consider Apple’s trajectory in mobile commerce.

Apple’s tendency to hold off on standards that aren’t fully built out (previously 3G and 4G), come into play with the classic chicken and egg scenario that hampers NFCs penetration. But more so, there’s something about NFC that is very un-Apple.

One of NFC’s many promises is to streamline point of sale (POS) transactions. Besides the fact that this vision itself is arguable, easing POS payments is almost underwhelming. Put another way, speeding up Walmart’s checkout lines isn’t Apple’s M.O., nor in its interest.

Though it would be true disruption to a decades-old system of retail transactions (checkout aisles, cash registers, gum snapping shopgirls, etc.), Apple is thinking bigger. It wants to tear down those aisles altogether.

It’s already done this under its own roof. Among Apple’s retail innovations, it has removed the counter that traditionally sits between customer and merchant. If you’ve bought anything at an Apple Store, you’ve likely experienced one of these roving transactions.

This optimizes physical space and employee accessibility. It probably also influences yield management and revenue optimization in the way that less people walk out of the store, leaving the proverbial “abandoned cart” behind.

But the kicker came last fall when Apple took the additional step to remove the sales person altogether. The Apple Store app was launched to scan physical store items via iPhone, and pay via iTunes. This seldom-discussed app could be a glimpse into the future of retail.

Read the rest.



7 Comments

7 Comments »

  • Stephen said:

    WOW, Mike. Thanks for the insight into this issue. It is one that I haven’t previously considered. I’m interested to see how this app (that allows the customer to scan via the phone and pay via iTunes) plays out.

  • Electrician said:

    Love it!

    So do shops then effectively become open warehouses? I could totally see this working at IKEA where you already go to the shelves and grab your new furniture.

    That said, how will this enable retailers to differentiate themselves from online eCommerce players? This doesnt add service, instead it takes service away.

  • John said:

    Awesome article, hope i can pay w my itunes account very soon.

  • Mike Boland (author) said:

    Thanks John, Hope all is well at Erply.

  • Mike Boland (author) said:

    @Electrician, good question. The differentiation would probably come from combining a fast checkout with the benefits of physically seeing items in a real store. The IKEA example is a good one. But you’re also right that it strips out some of the benefits of human touch/ customer service. I picture the job description and customer expectation of in-store associates to change into something different. They can be there to facilitate transactions around the store and provide “directional” help (kind of like they’ve always done but different).

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