The History of Point of Sale
In order to understand the basis of POS logic, we must go back to 1879, when the cash register was invented. Stores would manually keep track of the number of sales and the amount of each sale that was made. In the 1900s, the traditional cash register evolved into computerized point of sale systems, complete with credit card terminals and touchscreen displays.
In June 1974, the first product, a pack of Juicy Fruit chewing gum, was scanned at a POS in a supermarket, but it would take until the mid 80’s before the barcode technology was widely adopted. Some retailers, like German Aldi Nord would not use barcode scanners until 2003 because their cashier were trained to be faster than a scanner. In 2014, just a few years ago, mobile point of sale (mPOS) made a huge impact by replacing clunky registers and bulky computers with sleek tablets and phones.
As you can see, we’ve come a long way since 1879. Today, we are getting ready for the future of POS. According to Grand View, Research, Inc., the global POS terminals market size is expected to reach $116.06 billion by 2025. The future of payment has a lot in store, including AI, image recognition, smart cards, shelf-label readers, PIN On Glass and more. The possibilities are endless as we explore new ways to create a frictionless POS experience.
Understanding POS Logic
Now, if you really look at all the new technology behind, for example, Amazon Go’s cameras and shelf sensors, you’ll see that the “Business Logic” behind new-age Frictionless Stores is actually the same as the logic behind the barcode scanner. Really, these new innovations are just another way, although really cool way, to identify a product, just with different clients, peripherals and frontends. The core of the POS will always be the same and the underpinning logic can’t be eliminated.
So, what does this mean for retailers? Today, integration with new technologies and systems requires a new perspective on the same logic. When deciding to implement a new system, retailers are making a platformdecision, not a POS systemdecision. In omnichannel retail, there should be consistent Data and Business Logic throughout all channels, from Brick and Motar stores to Webshops to Mobile Retail.
Conceptualizing the Store of the Future
While the logic will be the same, the store of the future will be built on the “Invisible POS” – many retail verticals will soon switch to this system to make checkout as frictionless as possible. In many ways, invisible POS is like when you drive on a toll road. Instead of having to pay in cash at the booth, you can zip on by with the tag on your dashboard. The experience is the same when you go into the shop and you don’t have to pay at the cash register. Customers don’t want to go back to fiddling with cash. The store of the future must be frictionless, enhancing customer experience while benefitting retailers with a more convenient payment experience.
Enable the Store of the Future with GK Software
GK Software is giving retailers the ability to deploy retail concepts on any hardware device to meet the demands of modern shopping preferences - all with the same quality and service of a stationary POS. With GK’s point of sale solutions, retailers can be confident about enhancing the customer experience with frictionless POS.
To learn more, reach out here.
Below, I’ll explore three reasons why retailers should consider integrating a powerful, branded mobile application, and how they can leverage it to create a more engaging in-store experience that capitalizes on the deep shopper-phone connection.
Marketing and Personalized Offers
In its simplest form, personalization requires anticipating what users may want or need based on what retailers already know about them. And when directly targeted to an individual shopper, most are open to receiving personalized offers, as it’s viewed as a retailer providing a service rather than an unwanted, generalized message.
While we all know personalization is important, a retailers’ ability to leverage consumer data and personal shopping history quickly and easily is essential in order to offer unique promotions to consumers – anywhere, at any time. For example, as a shopper enters the grocery store, location-based geofences or instore beacons can remind them that Halloween is approaching, and send a coupon for candy directly to their in-store app. Tests have shown that the redemption rate of coupons presented to customers while shopping is magnitudes higher then with traditional check-out couponing. With multiple in-store beacons throughout the store, customers can be encouraged to visit several locations in the store receive special offers, just like a scavenger hunt.
Loyalty
The main functions of loyalty programs, digital or physical, have remained the same for retailers: they serve as a way to identify repeat customers and their shopping habits. However, consumers now expect more targeted, relevant offers and rewards in exchange for their personal information.
Shoppers will always have their phone on them but might not want to carry around a physical card or even their clunky wallet. In tandem with personalized offers on mobile devices, integrated loyalty programs help provide a new level of excitement and value for shoppers on the go. One example of a well-performing mobile loyalty program is the Starbucks app. According to eMarketer, 23.4 million people will use the Starbucks app to make a purchase at least once every six months, and its usage is ahead of both Apple Pay and Google Pay. So, why is it so successful? Not only does the Starbucks loyalty program allow shoppers to pay with their phones, each purchase accumulates points-based rewards – striking the perfect balance between convenience and consumer benefits.
It’s important for retailers to remember that simplicity is key. Shoppers are constantly bombarded with information and new offers coming their way, so putting coupons and a rewards program alongside a payment method can bring a new level of integration and seamlessness into retail stores. By focusing on convenience, consumers will only be looking at you, and not the competition.
Self-scanning
Consumers have noticed how frictionless the checkout process is on an e-commerce site and expect the same in person. But it seems inevitable that whenever they’re in the biggest rush, they’re stuck behind someone who’s trying to make a return, or has sent for someone to retrieve a critical item they forgot. Thankfully, according to IHL, Mobile POS Software is one of the fastest growing areas in retail technology, so waiting in a checkout line will soon be a thing of the past.
When smartphones are used as a self-scanning device, the pain points involved in a traditional checkout process are eliminated. By turning mobile phones into tools and not distractions, the customer experience is instantly improved as shoppers check in with a QR code to connect with a store’s POS system. Then, consumers can freely scan items as they shop, and pay for them without interruption.
GK’s Mobile Customer Assistant at your service
What retailers once thought was enemy number one – mobile phones and pervasive web access - has become an essential tool for traditional retailers, as it’s the gateway to an omnichannel experience. Customers are actively looking for tools and apps that provide them a frictionless trip to the store, which explains why GK Software’s Mobile Customer Assistant app has been launched over 168 million times. This year alone, Mobile Customer Assistant has completed nearly 10 million loyalty transactions and redeemed more than 1.4 million coupons in just one month. Used in over 13,600 stores, our platform seamlessly integrates with existing enterprise systems, so there’s less work on the retailer’s end.
To discuss the landscape of mobile customer solutions, or to find out how GK’s Mobile Customer Assistant can impact your business, feel free to reach out.
However, as these growth-minded online brands venture into physical retail, they will be competing with retailers that have already existed in the brick and mortar space for decades. They can’t afford to make costly mistake, but simultaneously require a higher level of expertise than startup-oriented systems often provide. These systems limit features or control, but the retailer doesn’t yet have the need yet for on-premise solutions. But what else is there?
Rent the Expertise
When it comes to most applications, point of sale included, retailers looking at new formats and markets are best served by investing in fully managed cloud services that deliver enterprise functionality without needing to build out their own expertise or infrastructure. Features such as buy online, pick up in store connectivity and unlimited scalability can be guaranteed with ease. By investing in a service that is fully managed, retailers are essentially “renting” the expertise that is essential for their success.
For example, as retailers start expanding to physical stores, they do not have staff readily available to understand or operate on-premise solutions. With GK’s fully-managed cloud software, retailers can obtain the same level of expertise as established retailers with large IT teams. Regardless of team or store size, retailers can be confident about expanding to brick and mortar stores without a massive upfront IT investment.
While cloud services come with a standardized configuration, there is still a freedom for retailers to develop their own parameters and functionalities with ease. This allows for retailers to maintain a friendly user interface, but still be able to create distinguishing factors that help them stand out against competitors.
If you’re an online retailer considering opening stores, or rapidly expanding your store count, I highly recommend that you consider a fully managed cloud service as opposed to an on-premise solution. It requires a fraction of the internal resources to deploy and manage, leaving you to do what you do best: sell products.
Please feel free to reach out to learn more about GK’s managed POS services and how we can work together to achieve your expansion goals.
But why do we need AI for this? It’s not like retailers have been starved for data analysis or don’t know how to run their businesses based on decades of experience and customer relationship building. And yes, technology has been improving nearly every aspect of retail for years. But even when retailers adapted advanced rules-based algorithms to ease the burden, their improvements were capped by the limited power of historical data to tell the full story – which it really never does.
In the last blog, we explored how replenishment can be automated to optimize sales with AI. Now, let’s take a look at two ways that AI can impact marketing processes in ways no other technology quite can.
Digital Signage
For well over a decade, retailers have relied on digital signage in stores to promote dynamic messages, ranging from store alerts to promotions. In some cases, it’s not only a driver for sales, but also a space that can be sold to CPG manufacturers as a branded display at the point of decision.
Yet, many retailers have failed to succeed in using these signs because they weren’t ready to hire people to keep the program effective – it takes a lot of work to create and update the content. It’s also really challenging to dictate behavior with a message or change mass buying behavior this way unless there’s a great discount available.
But now with AI, retailers can predict product sales far into the future and automatically push a related message to the digital sign. For example, ice cream is generally expected to sell less well in winter, but a sudden heat wave might have shoppers clamoring for the freezer aisle. The system would automatically identify sales as higher than the AI expected given all factors at play, triggering an alert to the digital sign, which in turn loads a graphic that tells shoppers that ice cream is selling particularly well today. Shoppers, recognizing the merit of their peers’ decision, follow suit. There is no need to spend time setting up or managing a certain promotion. The automated system instead succeeds just by reinforcing subconscious whims.
The important thing is that with a digital screen supported by AI, you don’t need to know why a trend exists. You just need to know it does exist.
Newsletters
One other unique content-adaptive feature of AI is the ability to deliver far more impactful, dynamic and personalized newsletters. First, AI allows customers to receive newsletters with content that meets their expectations and contains content they’d prefer to engage with. But the really interesting effect comes once customers start opening the content.
When people start clicking, the content hits the AI engine, which can analyze and update their responses to the content in real-time based on what they click on and spend time reading. Then, for future readers, the AI can instantly remove or reduce the prevalence of underperforming content, raise the profile of high-performing messages and improve both customer experience and ROI.
Automated, Real-Time Relevance
While those who ignore history are doomed to repeat its failures, only those who can make intelligent predictions about the future can adjust optimally to real-time environments on the fly. And that’s the promise of the GK Software AI-enabled platform. With our AI engine, real-time learning based on behavior looks like a chess game with a decision tree. The platform learns the moves ahead and uses predictive analytics to anticipate future product and consumer behavior.
To act based on historical data is a stable business approach. But to use our AI to predict outcomes and adjust to discrepancies in real time is the true power of AI in the store.
But why do we need AI for this? It’s not like retailers have been starved for data analysis or don’t know how to run their businesses based on decades of experience and customer relationship building. And yes, technology has been improving nearly every aspect of retail for years. But even when retailers adapted advanced rules-based algorithms to ease the burden, their improvements were capped by the limited power of historical data to tell the full story – which it really never does.
In this two-part series, we will explore three ways that AI can impact store processes in ways no other technology quite can. Let’s take a deeper dive into the first benefit we’ll explore - replenishment.
Replenishment
Today’s retail workforce is heavily manual. Retailers rely on their staff to manually perform time-consuming tasks that allow them to make decisions based on the best available information they can gather, instead of the right information.
One great example of this is the process of analyzing buy cycles of certain products in order to manage replenishment – both for restocking shelves and the store as a whole.
At a foundational level, a retailer’s ERP system will track how many items are left in the store based on POS and supply data. But the ERP can’t distinguish between the shelf and the back room – it just knows how many items have come in and how many have been sold. This makes it challenging to know if stock levels are too low or high in one area, or if poor sales are due to true out of stocks, or just a lack of product on the shelf.
Figuring this all out usually requires hourly associate walks through the aisles, check stock levels and note which products need a boost. Then, they head to the stock room to resupply, relying on a generic, consistent standard of how many of an item need to be available to handle coming demand. This isn’t exactly an exact science…
With AI, retailers can automate and optimize sales and replenishment recommendations based not only on exactly what’s on the shelf and in reserve – as separate units of measurement – but also adjust these needs dynamically in combination with POS and supply data analysis. The AI engine predicts future product sales based on historical data and prevailing trends and provides automatic real-time adjustments in replenishment commands in the instance of some unexpected macro event such as a storm or holiday.
AI also helps retailers recognize micro-moments, like a staple product experiencing a sudden drop, which the system could immediately recognize as a stock level issue, alerting employees to check for an in-aisle problem.
Now that you know how AI can streamline the replenishment process and make efficient use of merchandising tasks, be sure to stay tuned for part two of this blog series as we explore how two marketing processes can also be improved with this powerful technology. To find out how GK Software’s AI-enabled platform can help your business, please feel free to reach out.
Deutsche Fiskal GmbH is developing an open cloud solution to meet German tax fraud prevention requirements at the point of sale. The company is working with Bundesdruckerei GmbH and GK Software SE as its cooperation partners and is therefore combining the market-leading expertise that is available in the fields of security and store systems.
GK Software will connect all its solutions for points of sale to the cloud platform provided by Deutsche Fiskal GmbH. The crucial factor here was that the cloud solution does not depend on operators having any special kind of hardware. As a result, it is possible to connect all modern till clients, like tablets or smartphones, to the system too. GK Software believes that using other possible fiscalisation processes like fiscal printers or USB sticks normally entails higher costs for fairly large retailers and always goes hand in hand with operating special types of hardware.
Deutsche Fiskal GmbH is ensuring that the transactions, which are relevant to the tax authorities, are signed in the cloud according to the law and are returned for archiving via the digital interface. Bundesdruckerei is making available the Technical Security Equipment (TSE) that is required.
Explanations of the Ad-hoc-Announcement:
- GK/Retail core segment grows by more than 20 percent
- Breakthrough achieved in the USA with three new customers
- Expansion of strategic position through investments in products
According to the assessment by the Management Board, the 2018 financial year was the most successful in the company’s history. This evaluation is based on the fact that it was not only possible to increase turnover in our core business by far more than 20 percent from a figure of EUR 74.78 million to EUR 94 – 97 million, but also achieve a breakthrough in the largest retail market in the world by gaining three US customers. The global competitiveness of our solutions was also demonstrated by the fact that we were able to attract six more customers from around the world.
The Company used this strength to continue expanding its strategic position by making significant investments in its portfolio of products and its sales reach. This is taking place against a backdrop where the current upheavals in the retail sector are triggering huge and sudden shifts in the market place – and GK Software is planning to benefit from them and responded too in order to make use of specific sales opportunities.
Overall, EUR 14 million was invested in the ongoing and new development of mobile applications and the deployment of artificial intelligence within the retail sector (Artificial Intelligence for Retail or “AIR”), for example, and this figure was entered under expenditure. Both of these areas were only recently strengthened through acquisitions. Another major emphasis in the measures adopted included expanding the functions available in “cloud4retail”. A further EUR 2 million was spent on improving market penetration and gaining access to new markets. The Company is expecting an enhancement of its sales base through the ongoing global go-to-market and therefore a reduction in its reliance on individual sales regions.
In the light of the developments that are described here, the Management Board is expecting the EBITDA in the “GK/Retail” core segment to amount to EUR 4 – 7 million, which is the equivalent of a margin of 4 – 7 percent; this therefore falls short of the goal that we set (2017=8.8 Mio. Euro). However, if we modify the EBITDA by the expenditure on products, which had not yet reached commercial viability during the current year, the Company would have achieved an adjusted EBITDA margin of between 8 and 11 percent.
This and the market position that has been achieved, which is reflected in the well-filled sales pipeline and the very high degree of interest shown in GK Software solutions at the North American Retail Federation’s conference, which has just ended in New York, encourages the Management Board to stand by its medium-term forecast for the year 2020: this envisages an EBIT margin of about 15 percent for the core business.
The strong development of the “GK/Retail” segment was also able to compensate for a decline in turnover of about EUR 4 million in the “IT Services” segment. As part of our concentration on our core business, a decision has been made to halt those parts of this segment, which do not relate to developing and supporting software in line with the obligations arising from customer agreements. The phase-out period is expected to last between three and four years.
This decision does not make it necessary to revise the medium-term forecast, which was issued in the 2017 annual accounts for the year 2020. Overall, the Management Board is expecting an increase in profitability during 2019.
GK Software, the provider of omni-channel retail solutions for 10 of the Top 50 retailers worldwide, today announced significant U.S. growth in 2018. Named the strongest current offering in the Q3 2018 Forrester Wave for point of service solutions, GK Software boasts a dominant market position in Europe and has quickly become a key player in the U.S. GK Software was also recognized by IHL Group as a leader in innovation, market strength and market share for POS Software and SaaS in the Total Retail, General Retail and Food, Drug and Convenience segments.
Throughout 2018, existing customers representing grocery, specialty retail, apparel, electronics/appliance, discount and restaurants continued to expand their investments in GK technologies, and the company also acquired 12 new direct U.S. customers, including:
- Hy-Vee, an employee-owned chain of more than 245 supermarkets located throughout the Midwestern United States, which selected GK OmniPOS, TransAction+ and Mobile Consumer Assistant to improve customer service across all channels;
- One of the largest thrift shop chains in the U.S., operating more than 300 stores nationwide, and one of the nation’s largest consumer electronics and appliance retailers;
- A nationwide restaurant group operating more than 200 full-service restaurants.
GK Software now serves a total of 41 U.S. customers – 30 retailers and 11 restaurant chains – representing more than 34,000 locations across the region, in addition to the tens of thousands of additional locations managed by partners.
Impressive Product Benefits
One of GK’s most powerful solutions, its Mobile Consumer Assistant (MCA) platform provides personalized offers, campaigns, mobile payment and scanning via consumers’ smartphones. The complete mobile solution seamlessly integrates into retailers’ mobile applications and store technology to manage loyalty, promotions, self-scanning and self-pay. In 2018, MCA boasted significant global success, including:
- 13,600 stores and 47,700 POS units now using MCA
- 1.9 million total registered users and 144,000 active users
- 168.5 million total retailer app launches
- 8.3 million total coupons redeemed
- 1.65 million total payment transactions and 10 million total loyalty transactions
GK also expanded its capabilities across multiple emerging technologies – including its cloud4retail service, the first fully managed service to provide enterprise-class omni-channel POS through the cloud, and the integration of AI capabilities after the Dec. 2017 majority stake acquisition of respected AI firm, prudsys AG.
Deployed in 34 countries, the prudsys platform enables advanced omni-channel personalization capabilities, provides more than a billion personalized recommendations each day (11,000 per second) and generates $24 million per day in revenue based on recommended items. It is also able to generate significant lift in other key areas of customer businesses, including:
- 3-5% lift in sales revenue and profit through personalized recommendations
- 20-25% increase in conversion rate through improved marketing automation
- 10% increase in sales revenue and 5% increase in profit through dynamic pricing
Personalized offers, dynamic pricing and price optimization also help deliver instances of significant value to individual customers, including examples in which:
- Total basket value increased 8%, with just 42.9% of all baskets receiving at least one coupon with a personalized discount
- Click rate improved 10%, conversion rate increased 18% and revenue grew by 26%
Financial Growth
The GK Software Retail core business has demonstrated strong growth throughout 2018, with Q3 revenue increasing by 22.7%. GK has invested strongly in this area in order to further increase the financial growth of the overall company, which saw revenue gains of 13.6%.
Additional information on GK Software’s Q3 2019 results and continued growth can be found here.
OmniPOS, the award-winning platform for the handling of all store processes on the basis of state-of-the-art technologies, is at the heart of the GK Software solution suite. GK Software also makes OmniPOS completely available from the cloud as part of cloud4retail. The cloud-based platform is ready for the future and offers full functionality, adaptability, and opportunities to significantly reduce operating costs. Recently recognized by Forrester Research as the strongest current platform, its integrated processes have compelled roughly 50 major retailers worldwide, across all sales channels, to deploy it. Among these processes are support for all stationary and mobile POS variants, integrated solutions for scales, label & poster print, omnichannel pricing & promotions, clienteling and a comprehensive offer for mobile customer loyalty.
GK Software will also present the Frictionless Store solution, based on the Mobile Consumer Assistant (MCA), for the first time at EuroCIS. It enables the entire range of shopping processes on the customer's smartphone, including self-scanning, AI-based recommendations and mobile payment. The cloud-based solution offers retailers the fast implementation of a more modern customer approach in the store based on the mobile platform from GK Software, which has already been successfully used hundreds of thousands of times.
With AIR (Artificial Intelligence for Retail) GK Software has developed the first dedicated retail-oriented platform based on artificial intelligence for the optimization of retail processes. AIR enables retailers to realize many processes automatically - from dynamic pricing and personalization to fraud detection - based on machine learning.
The leading mobile merchandise management solution brings all merchandise management processes directly to the store using the latest technology - end-to-end, online and offline, on a wide variety of mobile devices and with direct connection to core systems.
GK Software will also present several new solutions based on the OmniPOS platform for the first time in Düsseldorf. This includes the hardware-independent OmniScale weighing software, which supports all types of scales - from operator scales to customer-operated scales to scales with integrated cash registers. Another first is OmniPOS Petrol. The modern forecourt solution ensures the seamless integration of the petrol station and convenience business into a unified Omnichannel-capable solution. With OmniPOS Hospitality, GK Software now empowers the integration of restaurants into an overall cross-channel strategy. The solution is designed to cover all restaurant types from fine dining to fast food, enabling modern customer loyalty integrations and omnichannel processes at the same time.
In addition to the enhancements to its OmniPOS solution, GK Software will present new and innovative solutions that address emerging opportunities such as blockchain-based payment technologies and virtual reality stores at EuroCIS.
December 19, 2018
IHL determines company positions on each axis by identifying and evaluating not only market strength and market share, but also growth, direction and resilience, including factors like revenue trends, customer satisfaction, commitment to research and development, and unified commerce capabilities. For both General Retail and Food, Drug and Convenience segments, GK Software earned the highest placement on the growth, direction and resilience axis. IHL Group also ranked the company fourth in worldwide retail POS revenue with $114 million POS revenue in 2017.
“The POS software market is rapidly growing as retailers expand to account for unified commerce,” said Jerry Sheldon, zVice President, IHL Group. “Although many of the world’s best-known vendors are competing for POS market share in the U.S. and globally, GK Software differentiates itself with a robust solution suite designed for the future demands of high-profile retail accounts and an exclusive vendor agreement with SAP. Its market share, focus on innovation and continued revenue growth should position GK Software as a notable market force for years to come.”
GK Software’s point of sale solutions, including Omnichannel POS and Mobile POS, allow retailers to more effectively blend together brick-and-mortar sales with digital commerce. What’s more, GK Software offers a highly flexible deployment, whether offline, on-premises or in the cloud.
“As retail channels become less distinct and consumer demands continue to evolve, retailers need vendor partners that provide robust, scalable and flexible solutions that help them adapt,” said Michael Jaszczyk, CEO, GK Software USA. “At GK Software, we’re dedicated to creating solutions that go beyond the baseline of omnichannel commerce, and our ranking in IHL’s report validates our efforts.”
GK Software’s omnichannel solutions will be on display at NRF’s Big Show, on Jan. 13-15 in booth #3267.
