- Brick-and-mortar retail isn’t going anywhere, but shifting trends at the point-of-sale (POS) are forcing terminal providers to adapt to a more digital environment. In 2016, e-commerce represented just 8% of the US’ $5 trillion in retail sales. And although this figure is poised to double to 15% by 2021, it still leaves in-store commerce with an overwhelming piece of the pie. However, as digital becomes a more important part of the way people shop, POS terminal providers must look beyond hardware and payment acceptance, and toward software, to maintain client relationships.
- Evolving merchant needs must be considered as players begin to revisit their strategies. In speaking with a variety of terminal manufacturers and providers, as well as examining current industry trends, BI Intelligence has identified four areas critical to merchants when selecting a terminal: payment functionality, user experience (UX), over-the-top (OTT) offerings, and distribution/customer service. The most robust platforms hit successfully on each of these categories to provide a full suite of business management offerings.
- Larger players need to double down on existing success, while smaller firms should differentiate. Market leaders Verifone and Ingenico aren't looking for growth; they're focused on keeping smaller new entrants at bay. That means expanding their already massive distribution networks and providing critical updates and upgrades. Given how entrenched these larger players are, newcomers would do well to focus on chasing new segments and winning specific niches.
- It’s all about the infrastructure and the platform. No single feature is likely to make or break a merchant’s decision to pursue a specific provider. Above all, they want a robust ecosystem that can evolve over time. Instead of focusing on specific services or partnerships, firms need to create strong, flexible, customizable platforms with wide access to different tools and services.
- Pursuing the future and taking risks is likely the way to win. What we’ve seen so far is just the beginning of disruption in the space. That means players ready to take risks and roll the dice on new technology, investments, and partnerships are the ones most likely to win out.
The downfall of US brick-and-mortar commerce is overblown. It’s undeniable that e-commerce is sharply on the rise – BI Intelligence expects the segment to grow at a 15.4% compound annual growth rate (CAGR) to hit $798 billion in 2021. But, despite the hype surrounding [...]