Forget The Register: Stores Use Mobile To Make Sales On The Spot

Dec 10, 2012
Originally published on December 10, 2012 5:44 pm

The women's shoe department at Nordstrom's flagship store in Seattle is bustling. Shoppers are trying on everything from stilettos to rain boots — and when they're ready to buy, they can pay up right where they are.

The sales associate simply whips out a modified iPod Touch and scans the shoe box's bar code. The handheld device contains a credit card reader, too, so the customer can just hand over the plastic and sign with a fingertip. There's no trek to the cash register and no line to wait in.

At department stores like Nordstrom and at other traditional retailers, mobile devices are slowly beginning to supplement, and even replace, other methods of payment. In many cases, buying something is becoming more efficient and more personal.

No More 'Clunky' Cash Registers

"We think the days of the big clunky cash register ... anchoring down a department are really going away," says Colin Johnson, public relations director for Nordstrom.

"We are always going to have a place for the cash and we'll certainly take care of however the customer wants to pay," Johnson says. "But we do see the future as essentially completely mobile."

Mobile payments certainly make shopping easier. And while customers like it, retailers benefit, too. When shoppers pay on the spot, they don't have time to change their mind and decide they don't really need what they are about to buy.

In addition to boosting sales, mobile technology is often less expensive than the old-fashioned kind. And removing cash registers also frees up valuable real estate inside the store, say industry experts like Brian Brunk of Boston Retail Partners.

"There isn't a retailer we talk to that isn't embracing at least a blended, if not an 'all-in,' approach to mobile point-of-sale," Brunk says.

But the changes taking place in retail go well beyond checking out via handheld device, he adds.

"You have to embrace the online — the digital world," Brunk says. "It's really now, how are you going to blend those two together? Because that's what the customer is really expecting."

Getting Goods To Customers Who Want Them

Take inventory, for example. It wasn't all that long ago, says Nordstrom's Colin Johnson, that customers found it charming when a clerk called around to different stores in search of an out-of-stock item.

But "those days are long gone," Johnson says. "You've got to be rapid, you've got to be on the spot. You have to have that information at your fingertips."

Or, more precisely, on an iPod — which is how shopper Amidy Doolittle purchased some glittery flats and a pair of suede shoes. "I just had [the clerk] order some shoes that weren't available in the store," Doolittle explains. "He looked them up on his mobile device, and I paid sitting right here in my chair."

What's most remarkable about Doolittle's purchase is that the sales clerk had access to Nordstrom's entire companywide inventory on his device.

While that might sound pretty basic to many shoppers, Kasey Lobaugh, a retail expert at Deloitte Consulting, says some retailers have struggled to integrate inventories of in-store and online products.

All too often, Lobaugh says, shoppers would be told their desired item was out of stock, when the retailer did, in fact, have the goods.

And in another plus for retailers, he says, "If you are able to fulfill the item from the place where the items are turning the slowest, you're able to decrease the markdowns that you have to take" if you were to sell that item at its original location.

In other words, winter jackets languishing in a Florida store can be quickly shipped to a Seattle shopper — and sold at full price.

Embracing 'Showrooming'

Yet another change under way relates to something you see all the time: the practice known as "showrooming." Increasingly, customers with smartphones are checking out products and competitors' prices online as they roam the aisles of brick-and-mortar stores.

Early on, Lobaugh says, some retailers were unhappy about the trend and weren't keen to embrace it.

But "our data would say don't resist it," Lobaugh notes. "Give them the capability. Enable Wi-Fi in your store so that the consumer can access more information, because the conversion rate goes up," he says — meaning, smartphone-toting customers who do research on the sales floor are actually much more likely to make a purchase.

And by 2016, Deloitte projects, roughly one in five consumers will be using their smartphones in precisely that way.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

Transcript

AUDIE CORNISH, HOST:

This holiday season, you may have noticed something while doing your shopping: Mobile devices are beginning to replace other methods of payment at traditional retailers. As NPR's Wendy Kaufman reports from Seattle, mobile payments are just one of many technology-driven changes remaking brick-and-mortar stores.

UNIDENTIFIED MAN: Ladies' shoes, next available please.

WENDY KAUFMAN, BYLINE: The women's shoe department at Nordstrom's flagship store is bustling. Shoppers are trying on everything from stilettos to rain boots. And when they're ready to buy, they can pay up right where they are. The sales associate simply whips out a modified iPod Touch and scans the bar code on the shoe box.

UNIDENTIFIED WOMAN: So you can see there's your total right there.

KAUFMAN: The handheld device contains a credit card reader too. And the customer just hands over the plastic.

UNIDENTIFIED WOMAN: I'm all set to swipe on the back of the device.

(SOUNDBITE OF BEEPING)

UNIDENTIFIED WOMAN: Now, I just need you to sign with your finger, not your nail. Very good. And would you prefer an emailed or printed receipt?

KAUFMAN: There's no trek to the cash register and no line to wait in.

COLIN JOHNSON: We think the days of the big, clunky cash register that is really anchoring down a department are really going away.

KAUFMAN: That's Nordstrom's Colin Johnson.

JOHNSON: We're always going to have a place for the cash and we'll certainly take care of however the customer wants to pay. But we do see the future as essentially completely mobile.

KAUFMAN: Mobile payments certainly make shopping easier and customers like it, but retailers benefit too. When customers pay on the spot, they don't have time to change their mind and decide they don't really need what it is they're about to buy.

In addition to boosting sales, mobile technology is often less expensive than the old-fashioned kind. And industry experts, like Brian Brunk of Boston Retail Partners, note that removing cash registers frees up valuable real estate inside the store.

BRIAN BRUNK: There's not a retailer we talk to that isn't embracing at least a blended, if not an all-in approach to mobile point-of-sale.

KAUFMAN: But the changes taking place in retail, Brunk continues, go well beyond the simple, handheld device checkout.

BRUNK: You have to embrace the online - the digital world. And it's really now, how are you going to blend those two together? Because that's what the customer is really expecting.

KAUFMAN: Take inventory, for example. Here's Nordstrom's Colin Johnson.

JOHNSON: It wasn't all that long ago that it was viewed as almost charming that we would call around to different stores to try to find that item for you that happened to be out of stock. Those days are long gone. You've got to be rapid. You've got to be on the spot. You've got to have that information at your fingertips.

KAUFMAN: Or more precisely on the sales clerk's iPod.

AMIDY DOOLITTLE: I just had him order some shoes that weren't available in the store. He looked them up on his mobile device, and I paid sitting right here in my chair.

KAUFMAN: That's Amidy Doolittle. What's most remarkable about her purchase of glitter flats and grey suede shoes is this: The sales clerk had access to Nordstrom's entire company-wide inventory.

While that might sound pretty basic, Kasey Lobaugh, a retail expert at Deloitte Consulting, says some retailers have struggled to integrate inventories of in-store and online products. And Lobaugh says all too often, shoppers would be told we're out of stock, when, in fact, the retailer had the goods.

KASEY LOBAUGH: But then in addition to that, if you're able to fulfill the item from the place where the items are turning the slowest, you're able to decrease the markdowns that you have to take.

KAUFMAN: So, for example, winter jackets languishing in a Florida store could be quickly shipped to someone in Seattle and sold for full price. Still, another change under way is one you see all the time: shoppers with smartphones. Increasingly, they're checking out products and prices as they roam the aisles. Lobaugh says early on, some retailers weren't happy about the trend and weren't keen to embrace it.

LOBAUGH: Our data would say don't resist it. Give them the capability. Enable Wi-Fi in your store so that the consumer can access more information because the conversion rate goes up.

KAUFMAN: Translation: Smartphone-toting customers who do product research on the sales floor are much more likely to make a purchase. And Deloitte projects that by 2016, roughly one in five shoppers will be using their smartphone in just that way. Wendy Kaufman, NPR News, Seattle. Transcript provided by NPR, Copyright National Public Radio.