Business

As a brick-and-mortar retailer, would you let Amazon handle your checkout system?

Above: Isn't Amazon the enemy of brick-and-mortar?

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Having raised existential questions about why we need brick-and-mortar stores, Amazon is now looking to help out its physical competitors. The e-tailing giant is reportedly planning to offer its popular Kindle tablet as the centerpiece of a new checkout system.

On Thursday, the Wall Street Journal reported that the plan will provide credit card readers as well as Kindles. Citing “people briefed on the company’s plans,” the Journal noted that the rollout is not yet set in stone and could be “delayed, altered, or canceled.” On the other hand, it could be ready as soon as the summer.

In December, Amazon bought the technology and engineering team of the San Francisco-based startup GoPago, a mobile payments company that developed point-of-sale systems designed around smartphones and tablets. The GoPago system included an app, a tablet, a credit card reader, a locked cash box, a printer, and even insurance. The GoPago business and customer relationships were purchased separately by mobile payments service provider DoubleBeam.

Smaller retailers first

Given that the world’s largest virtual store has no significant brick-and-mortar retailing experience, Amazon would likely have to leverage its online presence with retailer coupons or discounts to compete with the likes of NCR, VeriFone Systems, Square, and others. Smaller retailers are expected to be the initial targets and, to entice the pitch, Amazon might also offer website development, data analysis, and other services.

Steven Kirn, the executive director of the Miller Center for Retailing Education and Research at the University of Florida, told VentureBeat that checkout systems based on mobile devices “are definitely where this is going.” He noted that other countries, such as China, are further along in this area, in large part because they didn’t have to convert fromystems.

Kirn pointed out that “untethered” checkout systems based on mobile devices, such as ones that J.C. Penney and Nordstrom have tried, can also work for in-store marketing, inventory, and point-of-sale presentations in addition to checkouts. He also cautioned about the many additional security headaches that this could pose, in this post-Target era, by all those mobile checkout devices.

‘I’d be wary’

But this potential checkout vendor is not just any company; it’s physical store-killer Amazon. “The elephant in the room here is the competition that Amazon represents,” said Anita Bhappu, an associate professor and the program chair of the retailing and consumer sciences program at the University of Arizona. A retailer, she noted, would ask “if partnering with them, with Amazon getting all that data about customers, behavior and store performance” is a good idea.

“I’d be wary,” she said.

Dax DaSilva, the CEO of point-of-sale solution provider Lightspeed, agreed that data ownership is a big question.

“If Amazon has access to all of your SKUs, customer profiles, and sales,” he asked, “what happens to your business?”


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