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The Green SheetGreen Sheet

Wednesday, November 14, 2007

Mobile checkout moving up

Consumers flock to stores where they get what they want. And besides quality merchandise sold at decent prices, they crave quick service. With that in mind, a growing number of retailers are reducing long lines by using mobile, wireless hand-held devices that do it all – scan products, accept bankcard payments and print receipts – from anywhere in the store.

Apple Inc. stores first employed mobile checkout in 2005 as a solution to the holiday rush. By fall 2006, the stores eliminated checkout lanes and traditional POS terminals. Customers now roam the aisles and browse products, and cashiers bring checkout services to them.

Since Apple's mobile checkout rollout, sales have steadily climbed. The company reported its third quarter gross margin was 29.7% higher in 2006 than 2005. This year, third quarter sales were 30.3% higher, setting a company record. Other businesses have taken note.

"Mobile checkout continues to evolve along many fronts – hand-held scanners, mobile phone as a payment device, tap-n-go at vending machines and the list continues to grow," said Biff Matthews, President of Thirteen Inc., the parent company of CardWare International.

Make it easy

The continued growth, according to Matthews, is to keep up with customer satisfaction. "First and foremost every customer wants increased convenience," he said. "If hand-held scanners at the point of decision make the purchase transaction more convenient, faster, easier, they're for it."

Matthews believes the trend in adding convenience across all payment methods will continue in selected venues and for select transaction types such as low-dollar purchases that do not require receipts.

Hand-held scanners are also being used in trial periods at grocery stores such as Supervalu Inc.'s Albertsons. But these scanners let customers walk through the aisles and scan items as they put them into their carts. Once at the register, they just hand the scanner over and go through the payment process.

Proceed with caution

Certain aspects of mobile checkout have some retailers holding their applause. "The security of how the card data in the scanner is handled and communicated will be a concern, which raises a host of questions regarding communication methodology and its security," Matthews said.

Although mobile checkout is convenient for customers, logistics and possible security breaches cause some consternation. To prevent theft, the POS is typically located in the front of the store. But hand-held scanners change that.

"I am not of the opinion that a hand-held scanner is the solution for every [POS] environment," Matthews said. "Data security will be a concern but not a stopper until the data is compromised, and I can think of several methods by which that may be accomplished." Matthews also noted that payment for merchandise is only one part of the POS transaction. Depending on the business type and product, other matters must be addressed, for example, packaging and security tags. "These are operational issues that must be considered in conjunction with a change in payment method," he said.

Hand-held scanners give consumers the power to shop at their own pace. Retailers adopting this technology hope it will boost customer loyalty and sales. If Apple's experience is an indication of what's possible, they just might be right. end of article

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