RetailNOW Wrap Up By Joe Finizio
Part I: Thoughts on the way to Las Vegas
RetailNOW is the annual gathering of technology providers to the Grocery, Hospitality and General Retail markets. The show features many educational programs for both technology vendors and value added resellers (VARs) and a large expo where the providers of retail technology and payments products interact and connect with channel partners. RetailNOW is unique in that it is the only trade show and conference where retail technology reseller/VARs can connect with application software developers, hardware manufacturers, payments processing providers and service providers. Many of the vendors and distributors have their own events, however at RetailNOW, the entire retail technology industry is on display.
We all know that change is a constant with technology and successful businesses evolve with the industry or fade away. This year more than the past years there are many questions about the direction of the industry and how to best successfully navigate the uncharted evolution. Here are some important questions that need to be answered to help ensure future success.
- Payments and POS – Five years ago at the RetailNOW general session presentation, I showed a slide of two cars, representing the POS and Payments industries, in a fender bender crash. I stated that the two drivers were either in conflict and exchanging insurance papers or exchanging telephone numbers to become new friends and go out for a date.
- Consumer Hardware and Margins – How much more can consumer hardware – iPad and Android based tablets impact product margins? What is the best way for VARs to integrate these products into their in-store solutions?
- Non-traditional POS Competition – How can VARs compete with companies selling their software exclusively over the internet? The barrier to purchase has been lowered dramatically by those companies using innovative online resources and marketing campaigns to sell POS Products as a Service.
- The Reseller Channel – On a larger scale, where will the next generation of resellers come from as many of today’s POS VARs cash out their Payments portfolios, retire or simply fade away with the old technology no longer wanted by the marketplace?
- Communications – The final exclamation point to the uncertainty is the fact that during the past year the two major trade publications for POS industry have ceased to exist. What will need to be implemented for the industry get the word out to the marketplace and provide a resource for vendors to communicate with Reseller/VARs, and help the find new products or business opportunities?
- What’s Next – The big question that needs to be answered is where the next “pot of gold” is for Reseller/VARs. For those of us that have been in the industry for a while, we know that as the industry evolves, it brings new opportunities to obtain profitable business – Mechanical to Electronic POS brought a continuous stream of enhancements for businesses: PLUs, scales and scanners, open platform POS, enterprise management, integrated payments, tablet based POS, SaaS, web based marketing and many more. Will the show display the next big opportunity for Reseller/VARs?
Part II: Homeward Bound
I write this cruising at 38,000 feet while returning from the show. What information, answers and vision did RetailNOW provide to both the vendor and Reseller/VAR communities? During my time at RetailNOW, I spent a lot of time on the expo floor and spoke to many vendors and reseller/VARs. First of all kudos to Team RSPA for providing the attendees with a great offering of educational information and opportunities to network and visit with world class providers of Retail Technology products. A lot of information, products and services were made available for all attendees.
- Payments and POS – I’m still not sure if the collision of Payments and POS resulted in a date or a conflict but it is clear that Payments certainly dominates the attention of the POS industry. Whether it’s being PCI compliant, EMV implementation, QIR certification, capturing part of payments’ recurring revenue stream or a trade show floor that was full of payment processing providers, payment processing has the attention of the Reseller/VAR and ISV communities. Many Reseller/VARs and ISVs now know that payments residuals provide a stream of revenue which in turn provides a valuation metric for their business as well as an exit strategy through the sales of their payments portfolio.
- Every vendor on the show floor is desperate for good VARs. The message from the general session presentations was that VARs need to be full Solution Providers (and yes, that message should sound familiar as it has been communicated by many for the last five years, and continues to be highly relevant but still not universally implemented.) But there is also another conversation taking place in some corners of the show floor from forward-thinking Reseller/VARs. They are wondering if Payments will be a long term solution for their businesses. Payments residuals continue to shrink with more competition, the EMV opportunity is coming to an end and the QIR mandate looms overhead for many VARs. How do they ensure their long term success? The industry thought leaders seem to recommend that the strategy is to aggressively acquire as many customers as possible. Then, work closely with those new customers to make them long-term users of the products and services you sell today and into the future.
- Consumer Hardware and Margins – The show provided no answers here. There were new cash drawers that held tablets, stands for tablets, new tablets from traditional POS hardware providers and more great hardware products but no answers to the minimal margins that hardware now provides.
- Non-traditional POS Competition – How can VARs compete with companies selling their software exclusively over the internet? This question was answered in many of the education sessions which can be condensed into a few two word statements. “Find Value” – Clearly identify what your company provides to the market. “Trusted Advisor” – Become the go to company for the market you serve and “Solution Provider” – bring the entire solution that meets the business needs of the customer base and finally “Aggressively Market” – Set your company apart from a competitor selling only on the internet by communicating your value-added services and industry knowledge to the market and customer base.
- The VAR/Reseller Channel – Vendors are desperately searching for good companies to market and support their products but the opportunities within the traditional POS Reseller/VAR community are limited. Some Vendors are now looking to Managed Services Providers and Payment ISOs selling POS to extend their Reseller/VAR channels. However marketing practices for channel partners and the industry association will need to evolve and extern their market reach to connect with the next generation of VARs and ensure that a vibrant VAR channel remains in place for the future.
What’s Next – Where the next “pot of gold” is for VARs. Over a third of the 175+ exhibitors were introducing new products on the expo floor! My favorite question to ask attendees is “what have you seen that is new and exciting?” 100% of the attendees I spoke with said “nothing new, same old stuff…” From my perspective that was a big red flag. There were several very interesting products being exhibited. Here a couple of products that caught my interest in addition to some new cool hardware such as the APG Cash Drawer specifically designed for Tablets. Monetary is a new company with a commerce platform that connects/integrates data across multiple transaction processing platforms (mobile, instore and web). Anyone who has be using online ordering and instore POS might be familiar with the need to potentially use two different payments providers. Monetary has the potential to solve that and many more multi-platform issues affecting customers using multiple sales channels. The Payment Logistics expo booth featured a mobile checkout platform called PayLink. If you have been to an Olive Garden or a Chili’s you may be familiar with the Ziosk terminal, at your table, that can be used for entertainment, calling for service and/or paying your guest check. PayLink eliminates the need for the Ziosk terminal and turns your smart phone into a mobile payment and services device. Just text your table number or code to a contact number provided on a table card to: retrieve and review your guest check, split the check, provide a tip, get an optional discount or offer, rate your dining experience and even request your car if you have used valet parking… very cool.
So why were the attendees I spoke with seeing the same old stuff? Are the exhibitors not creating a good buzz about the new products or successfully showing a profitable business opportunity? Are the VARs complacent, nervous about investing in new products, or not connecting the profit opportunity to their customers’ needs? About four years ago, I spoke to a gathering of Restaurant CIOs about retail technology and payments trends. Their universal response was that they needed solutions to their operations needs and problems not someone selling “stuff”. The products that caught my attention all solved problems but they also all need industry savvy Value-Added Resellers to bring those solutions to the customer base.
As the RSPA’s Chairman’s gavel was passed from Tom Richardt (Vantiv Integrated Payments) to Mark Fraker (BlueStar), Mark’s call to action for the membership was to get committed and get involved as passive involvement will no longer provide long term success. So maybe the next “pot of gold” is not a specific product but Reseller/VARs becoming fully involved as providers of technology and marketing the knowledge they bring to the customer base as trusted advisors and solutions providers.
About the Author:
Joe Finizio has an extensive background in retail technology, payment processing, and reseller channel management. Starting with ten years at POS industry pioneer Data Terminal Systems, fifteen years with Micros Systems where he served as Vice President of Dealer Sales and Vice President of North American Operations, he continued as the Corporate Vice President and General Manager at Sharp Electronics Corporation’s POS Division. Finizio had an eight year tenure as the President & CEO of the Retail Solutions Providers Association (RSPA) and more recently served as COO at POS.com and Vice President of Sales and Marketing for Action Systems Inc. During his tenure at RSPA, Finizio established a coalition of industry associations for payment card data security that included the National Restaurant Association, National Retail Federation and the National Grocers Association and also served as a member of the PCI Security Standard Council’s Board of Advisors.
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