POINT OF SALE: THE HEART OF RETAILING Analysis and insights on the latest trends in retail: artificial intelligence, Quick Service Restaurants, and more Capgemini has deep expertise in retail and digital transformation. This is a proficiency developed over countless projects, including those centered on a critical element of retail technology: the Point of Sale. Whether it is called Point of Sale, Point of Service, Point of Contact, or some similar name that encompasses both online and offline purchases, the goal is a financial transaction and, regardless of the name, the interaction with the customer is what ultimately matters most.

The market for Point of Sale (POS) evaluation of their POS solution Intel has positioned solutions has changed dramatically only once every 10 to 15 years, over the last couple of years. there is limited knowledge and the following Acquisitions, omnichannel strategy, experience available to complete market trends as demand for a lower Total Cost of the evaluation internally. Ownership (TCO), introduction of influencing the need cloud-based POS solutions, and To help retailers accelerate the for innovative POS the need for real-time analytics POS vendor selection process, capabilities have transformed the Capgemini has developed a proven solutions: industry. As a result, retailers are methodology. The Capgemini POS increasingly confused about the tool, supported by Intel, is a crucial • New store experience-focused route to take when selecting a part of this process. Using this tool capabilities in an era of new POS solution. Just taking the and Capgemini’s methodology, omnichannel commerce most recent Forrester Wave: Point retailers are able to reduce the of Service report or Gartner Magic time taken from identifying a long • Customer demand for Quadrant can provide a starting list of potential vendors to making frictionless experiences, point with some insight on leading their final selection. More than including self-service and POS vendors, but do these lists 10 years ago, Capgemini started contact-free payments. identify the solution that fully collecting data about POS solutions. meets the retailer’s requirements? Initially a local initiative with just a The refreshed version of the tool Because of the lack of both time few global POS vendors, over the incorporates artificial intelligence and resources, retailers tend to years Capgemini has expanded (AI) as well as Quick Service select POS vendors recommended this process and incorporated all Restaurant (QSR) considerations by Forrester and/or Gartner. global and select regional vendors. and insights. Even then, comparing solutions An extensive questionnaire is sent against retailer requirements every two years to the market, remains a time-consuming task. and the acquired data is added to Since most retailers perform an Capgemini’s POS tool.

2 Point of Sale: the heart of retailing Retail industry consolidations, omnichannel strategies, demand for lower Total Cost of Ownership (TCO), cloud-based Point of Sale (POS) solutions, and the request for real-time analytics capabilities have transformed the industry.

POS: generating targeted data

For decades, the role of the cash of registers. Customers now can register didn’t change much. It be served in any part of both the was only in the last 25 years, with physical and the online store using the arrival of the Internet, that mobile technology. POS became capable of doing much more than just registering Looking back in history, we can still transactions and keeping revenue see that the essence of POS hasn’t secure. POS is now at the heart changed. However, the Internet of retailing and connects to all of Things and other technologies downstream and side-stream like AI deliver capabilities that systems. address the growing need for real- time data across POS. This creates Fast forward to today’s retail actionable insights on the spot as environment, new technology conditions change. The targeted has massively changed the look data that is generated will then and feel, as well as the usability, result in happier customers.

3 There are many different vendors with different solutions that target customer and market needs. But what are the diferentiators and which vendor will suit the client’s requirements best? For example, are there unique elements in offering an omnichannel solution and what are the common threads between vendors? This section provides a unique insight into the Capgemini POS tool, its wealth of information, and an analysis of key aspects from 20 different POS vendors.

Globalization

Given the mature state and slow Global presence demands a growth of domestic retailer markets, worldwide organizational structure global expansion has become one and associated connecting processes of the hottest growth strategies. and IT solutions. If the target market Gaining access to new customers doesn’t differ much from existing and growing markets will boost markets, it can be a good choice sales that strengthen a company’s to deploy a single, multilingual- purchasing power via programmatic ready, POS vendor solution that promotions and access to larger consistently meets varying country- volume discounts. specific requirements across international deployments.

We notice that international retailers are struggling with the questions: “Should I deploy one single solution across the globe?” and “Can I use a single template for my global business?” It’s clear that international retailers looking to the future prefer to have a single solution to support their business but are also reserved More than 50% of the vendors because of local differences. included in the Capgemini Point of Sale (POS) tool currently have a clear global presence.

4 Point of Sale: the heart of retailing Leading innovation

In response to the changing where store automation is an retail market, being able to important element. The POS quickly adapt to new trends and solution is considered the heart opportunities is increasingly critical of operations and is seen as for retailers. Creating a smart a single point of information retail environment that offers a by both store employees and seamless customer experience customers and should provide a is also becoming key for most consistent picture across all sales businesses. A POS solution must channels. Some of the trends not only adapt to the new trends identified by the Capgemini POS in retail but can also be a real tool are related to actionable change driver. Offering a mobile real-time data insights, customer POS and self-service checkout is loyalty integration, omnichannel 40% of the analyzed vendors no longer a unique differentiator. solutions, and innovations based already offer a solution based To be the leader in the sector, on cloud technology. See the continuous innovation is required cloud section below. on cloud technology.

Implementation

A new POS implementation can The roll-out period Furthermore, POS vendor upgrade have significant impact on the can vary from four lead time and frequency can business. Business processes to 12 months. hinder solution development and should be evaluated to determine can cause inflexibility. Capgemini, whether they need to adapt to a Capabilities and vendor maturity therefore, strongly believes in a new business model, whether the should also be taken into model with a limited number of POS solution should be tailored to consideration when kicking off a versions throughout a roll-out the existing one, or a combination POS evaluation. Today for example, program while maintaining optimal of both. This contradicts the trend of the number of vendors that can flexibility and striving towards staying with minimal changes using provide a POS cloud solution is standardization. out-of-the-box systems. Regardless, very limited. On the other hand, the implementation may be complex are retailers ready to run their POS It’s key to modern and should not be underestimated. from the cloud? The answer will retail that vendors Most of the reviewed vendors offer differ per type of retailer, location, can respond quickly end-to-end support services during connectivity, and solution design. the roll-out phase. Others rely on to new requirements. the customer’s capabilities, with or Version control without external resources from an experienced system integrator. Upgrades to a POS solution are The lead time is another important essential to keep up with business consideration. Adapting to the and consumer needs. Retailers business needs and the chosen vendor, should ask whether their company the roll-out period can vary from four can take advantage of innovations to 12 months. Capgemini offers over made for other customers by 20 years of implementation experience bringing these into the commonly and often serves as the integration used core version, or whether they partner on behalf of retailers or are better off developing their own vendors, using its standardized solution totally separate from the multi-phased approach. others.

5

Support

Support for store automation Furthermore, it’s essential (such as POS) can be organized to manage the support on in different ways. As automation peripherals, e.g. Electronic begins to impact second- and Funds Transfer (EFT) terminals third-line support, it’s crucial to and scanners, in-house. From have access to the right system a store employee point of view, knowledge either in-house or it’s recommended to have a using third-party specialized single point of contact for all service companies. 90% of POS POS-related questions or issues. vendors included in the POS Retailers look increasingly tool offer first, second, and third to reduce support costs by 90% of the vendors do include lines of support. Very few POS enabling remote management. in-house first-line support. vendors outsource their first-line support to third parties.

Artificial intelligence

While the trend towards self-service used to automatically categorize retailers to look into upgrading their is enabling retailers to deliver better the items in the customer’s basket, POS systems. Unified commerce customer experiences, it also has cutting queues and saving time. allows retailers to provide a its drawbacks. In some instances, consistent and personalized retailers have experienced When combined with facial customer experience at every substantial revenue losses from self- recognition software, computer touchpoint, improving the customer service checkouts as customers look vision also has the potential to experience, lowering costs, and to cheat the system – for example, further improve the customer driving revenues. scanning cheaper items while experience through personalization, putting more expensive items in their the tailoring of specific offers, and Unified commerce bag. Now retailers are looking to automatic payments. In Europe, allows retailers to implement artificial intelligence (AI) these features will be strictly opt-in provide a consistent to protect their revenues against self- and systems will ensure that retailers and personalized service checkout fraud. are able to respond quickly to customer requests for detail on what customer experience Using computer vision at the POS, type of personal data is being stored at every touchpoint. retailers can detect fraudulent by the retailer in line with General barcode use by customers and Data Protection Regulations (GDPR). employees. A camera at the POS records anomalies and raises Retailers are looking to an alert to the store operators. implement AI to protect By applying machine-learning their revenues. techniques, retailers are able to improve the accuracy of algorithms over time – for example, so that Unified commerce computer vision systems can spot subtle differences in the variety The trend towards unified commerce of apples rather than just the type – retail software systems which of fruit. But it’s not just revenue connect all inventory and customer protection that can be improved. data to all online, in-store and mobile These same techniques can also be sales channels – is driving many

6 Point of Sale: the heart of retailing

Cloud Quick Service Restaurants

Like many other industries, retail is Quick Service Restaurants (QSRs) In response, Capgemini has in the midst of the trend to move – food outlets offering minimal developed a POS tool specifically functionality out of the store and table service – are taking POS to tailored to the unique requirements into the cloud. Cloud systems the next level. While there are of the QSR industry. The tool promise lower TCO and greater similarities with regular retail incorporates all of the core flexibility in terms of deploying POS, QSR systems are much more elements and learnings from the applications across hundreds complex. Firstly, there are multiple regular retail POS tool with a host of stores. However, the reality orders coming in from different of new QSR-specific considerations for the vast majority of retailers touchpoints – web apps, mobile – for example kitchen management, is a mixed implementation with apps, digital kiosks, drive throughs, order tracking, and visibility. Using mission-critical functions like POS and walk-ins. Each of these contains the tool, QSRs are able to pinpoint deployed locally and others like multiple elements that must be which POS features are most customer loyalty schemes and sent to different locations within relevant to their business, enabling promotions offloaded to the cloud. the restaurant to be fulfilled – the them to quickly arrive at a shortlist Many retailers are conservative by fryer, the grill, the drinks station, of suitable vendors, speeding up the nature and with many stores still etc. – before they are brought tender process. experiencing unreliable network back together for completion and bandwidth, keeping POS systems delivered to the customer in a While there are on-premise seems like the safest timely manner. QSRs are looking for similarities with regular option. If a POS doesn’t work, the expert guidance in how to manage retail POS, QSR systems store must close. Also, for larger these multiple integrations and roll retailers, not all stores will be out new technologies such as voice are much more complex. running the latest software and ordering, so that they can offer a operating systems, meaning that a unified customer experience across move to the cloud also necessitates all order points. expensive upgrades in order to set a new, consistent baseline for IT.

Cloud deployments promise lower TCO and greater flexibility.

7 Future of Point of Sale

Although the world is changing In addition to its basic function, and The viability of frictionless quickly, the advances in retail and as a consequence of omnichannel, shopping really depends on the more specifically around POS a modern POS should support full type of business, costs, security, systems are less volatile. The main integration with all downstream and market acceptance. Currently, purpose of the checkout has hardly and side-stream systems in the technology is best at keeping changed over the last century. At order to meet current and future track of no more than about 20 the start of the 20th century, prices customer demands, such as “never people at a time and struggles of goods were captured, and the disappoint,” “no more waiting in to handle an item that has been total amount was calculated and lines,” and “easy shopping and moved from its place on the shelf. paid. The purpose is virtually the simple checkout.” Generally, a “Go” store only runs same today. In the end, it’s all smoothly when there are just a about what has been sold, when Today’s example of a presumably few customers or if they’re moving it was sold, to whom it was sold, futuristic store is Amazon Go. The slowly. Current implementations and against what price it was sold. so-called frictionless shopping tend to work best in smaller stores However, the technology used for experience allows customers to purpose-built for the frictionless capturing transactions and making collect all their products and just shopping experience, although payments has changed over time walk out of the store when they are many leading retailers are currently and will continue to change in done. The Amazon Go app keeps testing if this is viable in larger and coming years. track of all the products in the existing stores. Later, expect to see shopping basket and automatically new innovations like blockchain charges the customer’s Amazon technology become more prevalent account after he or she leaves the in transaction tracking. store. It’s an interesting test case to take away one of the biggest Many leading retailers frustrations of the consumer. The are currently testing technology is available, either using whether it’s viable to RFID or a combination of computer roll out frictionless vision, sensor fusion, and deep learning, as with Amazon Go. shopping to larger and existing stores.

8 Point of Sale: the heart of retailing

Intel technology for POS

While the benefits of advanced POS systems are undeniable, integrating new systems can pose headaches for IT.

Adding more and different Intel technology for POS can In addition, Intel also offers devices often leads to four help retailers meet these four the following technologies challenges: challenges head on: for POS:

1. Greater hardware cost and 1. Intel provides a common 1. Intel Solid-State Drives (Intel complexity resulting in an architecture from the smallest of SSDs) for improved reliability elevated Total Cost of Ownership devices through to the largest of compared to traditional hard disk (TCO) servers supported by a flexible, drives global ecosystem

2. Operating system cost and 2. Devices that are ready to complexity that requires a 2. Intel supports most operating support Software-as-a-Service complex model for sustainable systems and multi-device (SaaS) models support and additional training application software

3. Advanced processors that 3. Remote device management 3. Intel Active Management support rich media nightmares caused by a lack of Technology (Intel AMT) – a centralized in-band access to feature of Intel vPro Technology retail platforms – provides multi-device remote 4. The Intel Distribution for management even when the OpenVINO Toolkit to accelerate power is off, the OS is inoperable, the time to market for AI-driven 4. Greater security risk as management agents are missing, POS applications. connected POS systems are or hardware has failed. The Intel more open to ransomware and vPro Platform TCO Estimator security breaches. allows retailers to discover the potential savings they could Capgemini sees POS as the heart make by deploying Intel vPro of retailing, both online and offline. Technology Therefore, POS plays a crucial part in the Capgemini/Intel Smart Digital Store initiative and set of 4. Intel offers end-to-end data offerings. The Smart Digital Store security for POS, including Intel enhances the physical store with Software Guard Extensions digital capabilities to empower (Intel SSG), allowing original associates, engage customers, equipment manufacturers increase operational efficiency, (OEMs) to build security into their and generate more revenue. devices at the hardware level, while Capgemini builds rigorous See also: security assessment into its POS https://www.capgemini.com/ evaluation tool. service/the-smart-digital-store/

9 The biggest benefit of the Capgemini process and approach is the availability of detailed information about the world’s leading POS solutions. The combination of this information with Capgemini’s extensive Capgemini POS experience in POS evaluation processes and key requirements evaluation process documentation makes it possible to provide a ranked shortlist of To support retailers in their vendors to the retailer in just five POS evaluation, Capgemini has weeks. In this timeframe, there’s developed an industrialized process. even time to add additional POS A crucial part of this process is the solutions from the local market if Capgemini POS tool. requested by the retailer.

Figure 1: Capgemini POS evaluation process – shortlist definition

Week Week Week Week Week Activities/project week 1 2 3 4 5

1. POS trend analysis and identify knock-out criteria Identify knock-out criteria and agree on a preliminary long list of systems based on retailer and Capgemini input

2. Capgemini RFI questionnaire Walk through Capgemini RFI questionnaire, prioritize each question (1-5)

3. Identify additional key requirements that are not included in the Capgemini RFI (max 10)

4. Analyze Capgemini vendor database, create scoring per system

5. Conduct additional market analysis to find more information on additional requirements

6. Combine results

7. Select top 5 based on scoring (short list)

8. Create summary slides for each of the top 5 solutions based on a vendor database

Workshops

Workshop 1: Workshop 2: Workshop 3: Trend analysis Finalizing requirements Selection of top 5 Agenda Agenda Agenda 1. Project induction (kick-off) 1. Presentation of recognized 1. Presentation of analysis of 2. POS trend review presentation requirements identified systems 3. Supplement requirements based 2. Supplement requirements 2. POS trend review presentation on trends

10 Point of Sale: the heart of retailing Approach and deliverables

The first part of the evaluation Based on requirements from this process focuses on functionality. retailer, Capgemini customized and Using a combination of more than added “tender reconciliation” – the 600 questions and priorities set by process of reconciling disparate the retailer, Capgemini provides transactions – as a separate area to a weighted list showing the score evaluate. per vendor. Since Capgemini has received detailed information In addition to ranking functionality from targeted vendors based on solutions, the tool provides questionnaire responses, it can information for comparing compare the solutions from these architecture, references, and vendors against functional areas omnichannel capabilities. like tender, discounts, promotions, Capgemini offers a transparent security, and financial management process that helps determine a in its POS tool. See figure 2 for an desired shortlist and gives retailers example of an evaluation process added confidence in their decisions. for a major retailer. This graph not This shortlist then becomes the only shows the results, but also the basis for a Request for Proposal flexibility, of Capgemini’s POS tool. (RFP) process.

Figure 2: Results for four different functional areas and the overall scoring

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11 About the authors

Martin van Vugt Ron Peek Principal Consultant Senior Consultant Consumer Products & Retail Capgemini Consumer Products & Retail Capgemini [email protected] [email protected]

Martin is the global POS lead of Capgemini’s Consumer Ron is a senior consultant in the Retail Operations capability Products, Retail, Distribution segment. He has a long and of Capgemini Netherlands. He has extensive experience in deep experience in retail consulting with food and non-food retail operations, store innovation, and POS development. retailers in the Netherlands and internationally.

Jen Dolan Managing Consultant, Business Transformation Services Retail Store Operations [email protected]

Jen is a managing consultant in the Retail Operations capability of Capgemini USA. She has over 30 years of experience in Retail and Consulting with a primary focus on POS selection and implementation for all retail formats in both the US and Canada.

About Capgemini

A global leader in consulting, technology services and digital transformation, Capgemini is at the forefront of innovation to address the entire breadth of clients’ opportunities in the evolving world of cloud, digital and platforms. Building on its strong 50-year heritage and deep industry- specific expertise, Capgemini enables organizations to realize their business ambitions through an array of services from strategy to operations. Capgemini is driven by the conviction that the business value of technology comes from and through people. It is a multicultural company of over 200,000 team members in more than 40 countries. The Group reported 2018 global revenues of EUR 13.2 billion.

Learn more about us at www.capgemini.com

About Intel

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