IDC Opinion

The already rapid evolution of the grocery store reached full tilt during the COVID-19 pandemic as essential retailers were even more pressured to deliver a robust slate of omni-channel options. As adoption of self-checkout (SCO), mobile and online ordering, delivery and BOPIS reach a fever pitch, grocery and food retailers need a point-of-sale (POS) solution to help them keep pace with customer demands, navigate inventory complexities, and manage workforce issues. While addressing these challenges and more, grocers maintain the same set of several key priorities including growing store-sourced revenue, increasing merchandise/assortment accuracy, and executing omni-channel fulfillment efficiently. To achieve these objectives, grocery and food stores must leverage technology that is designed to address the complexities of the grocery segment. POS providers that emerged as leaders have addressed the unique challenges grocery/food stores face. Point-of-sale software (SW) providers must adapt to be innovative in a rapidly evolving space. The need for self-service is not unique to grocery, but the scope of inventory, perishability monitoring/verification and the need to weigh certain items, creates more intricacies than simply enabling self-service kiosks and scanners. In addition, grocery has a more acute need for real-time data integration across channels as the pandemic drove bigger uptick in areas such as online grocery shopping and curbside pickup. With this, 64% of food and grocery retailers say that the top consideration when selecting technology solutions is the provider’s depth of industry expertise to dovetail technology acumen.

Retail organizations of all sizes have realized the importance of digital strategy and capabilities. As such the point of sale must be both enabler and partner to provide the scope of rapid innovation and flexibility that the grocery space needs. The pace of change is a concern for all organizations as many admit to feeling the pressure to invest in innovation to remain competitive. This is echoed in the need for technology partners to both offer out-of-the-box solutions in tandem with the ability to integrate to other solutions. It’s important for retailers that vendor partners participate in ecosystems of services that collaborate and compete. Taking all these factors into consideration, this IDC MarketScape identifies the following as key trends and differentiators for point-of-sale providers: 

• Omni-channel capabilities of POS software suppliers from self-service, self-scanning, kiosk, curbside pickup, and endless aisle to delivery are in high demand and essential for both customer experience and efficiency. POS providers must address not only the omni-channel needs of today but have a strong strategy for powering the omni-channel needs of tomorrow while democratizing the data that comes from each customer touch point, eliminating silos. A key differentiator among top players in this IDC MarketScape is the ability to provide real-time, actionable data to help retailers make impactful changes at the store level. 
• POS software vendors are moving to a unified commerce platform approach with data integration across operations to ensure consistent customer experience across all channels and offering retailers greater scalability and flexibility to add new features. While vendors are moving toward this platform approach, IDC notes divergent approaches in a few areas including payments acceptance, ease of updates for POS SW, and data integration strategies. 
• There is significant movement to cloud-first, API-first POS platforms enabling microservices to help retailers to mix and match modules needed, allowing for ease of scaling and updates, and the ability for retailers to distinguish their brands better. 
• POS software vendors are emphasizing innovation to keep up with rapidly evolving needs/demands of shoppers and infusing solutions with advanced technology including predictive artificial intelligence (AI)/machine learning (ML), store virtualization, endless aisles, cashierless technologies, smart scales, and produce recognition. 
• As the POS landscape is changing rapidly in grocery, legacy providers are faced with nimble challengers that are addressing many areas that had been persistent obstacles, leading some formerly large players to back off the grocery market. With the maturation of cloud technology and moving data to the edge, retailers should seek out technology partners that understand the nuances of grocery and are addressing those specific challenges. 

The intent of this research is to present an evaluation of enterprise-level vendors offering omni-channel POS software solutions globally. The inclusion criteria allows for the assessment to include providers that are all-in-one systems or a module within a unified commerce or omni-channel retail suite. In doing so, we present a view of the POS software landscape with a lens focusing on the rapidly evolving omni-channel capabilities that are increasingly vital to the grocery industry.

Tech Buyer Advice

• Build a strong foundation: Seek a technology partner that understands key objectives and will help align technology goals with appropriate key performance indicators. The capabilities of a vendor’s offered solutions should not only address issues of today but offer flexibility to adapt to changing market conditions or demands.
• Prioritize scalability: In these rapidly evolving times, ensure that a POS software vendor’s solution demonstrates the ability to easily scale and add/change features seamlessly. Ask your vendor to discuss the update process and frequency and how they are using technologies such as edge virtualization or digital twins to make software updates easier and more seamless. 
• Strategize innovation: Select a vendor with an innovation-rich road map (particularly in areas of AI, computer vision, and machine learning capabilities) and a consistent track record of successful future-ready pilots. Ensure that future-ready innovations will be applied to next-generation grocery-specific capabilities, such as advanced produce recognition, smart scales, endless aisle, just walk out technologies, advanced loss prevention, inventory management and food safety, perishable identification, and intelligent promotions/marketing, and either are currently available for rollout or will be available soon. 
• Ensure manageable and effective upgrades: Communicate clearly with vendor partners to understand the number and frequency of upgrades to expect. Make sure that all locations operating the software are all on the most current version of technology and are making appropriate use of features and capabilities, rather than running an outdated and less efficient or effective version of the solution. 
• Put customer data at the forefront: In omni-channel POS platforms, data integration is paramount. Ask your vendor to demonstrate how its POS software solution offers a real-time single point of truth of the customer across all channels including customer data, shopping cart, promotions/loyalty, and inventory. 
• Evaluate POS through the lens of ancillary and new revenue streams: Consider the vendor’s ability to easily integrate modules such as deli, catering, fuel forecourt, and pharmacy giving customers a common experience across operations and the retailer integrated customer data across modules. 
• Future proof payments: Review the vendor’s payments module to consider how it is integrated within the POS platform and if it can use the vendor’s payment gateway and offers an option to use third-party payment gateways. In addition, ensure the POS vendor can use the wide range of payment options that are important to specific demographic groups including QR codes, crypto, and mobile wallets. 

Methodology