Nordstrom Projects Rollout of Register-Like POS Handsets by Early 2013

High-end department-store chain Nordstrom Inc., which has been testing some 6,000 mobile devices for customer service and checkout, expects to roll out a significantly larger number of the devices in the first quarter of next year and to add as much capability to them as it has on its cash registers.

A spokesman for the Seattle-based company will not say how many of the devices, which are iPod touches modified for card acceptance, will be deployed. “We can view our entire company inventory in real time on these devices to find the size/color for an item the customer is looking for, as well as offer mobile checkout to customers–rather than them having to walk to the register,” he tells Digital Transactions News in an e-mail message. “We are continuing to add functionality, so more to come.” Including both its Nordstrom Rack and full-line stores, Nordstrom boasts some 225 U.S. locations.

Executives spoke briefly about the rollout May 10 during a conference call with stock analysts, but were not specific about the capability they expect to add to the devices. “We\'re at about 75% of the functionality of a register…on our mobile devices right now,” said Erik Nordstrom, executive vice president and president of stores for Nordstrom, speaking during the conference call. “By the end of year, we will be at 100%. And next year, we\'ll actually have additional functionality that we don\'t even have on the registers.”

The timetable for the rollout, he said, is keyed to the register-like enhancements the company is making to the devices. “Once we hit full functionality, we will plan on having a big rollout at that time,” he told analysts, referring to the first quarter of 2013.

Nordstrom began deploying the devices with sales associates last summer and continued deploying them through February. The chain is among a group of retailers that in recent months have been testing or rolling out mobile devices to floor personnel to improve service, show merchandise that may not be in stock, and process payment. Besides Nordstrom, major chains such as The Home Depot, Lowe’s, Urban Outfitters, Guess Jeans, and The Gap’s Old Navy stores have adopted mobile POS systems. The pioneer is Apple Inc., maker of the iPod touch, which began using handsets for customer checkout in its own Apple stores.

While observers don’t expect conventional cash registers to disappear any time soon, Nordstrom clearly expects to remove the older machines as more of its store personnel begin wielding iPod touches. Asked if the devices will replace registers over time, the spokesman says, “Yes, over time we think we will have a more mobile-enabled store environment than exists today.”

Replacing registers not only improves service by cutting down on wait times, it also frees up space for merchandise, says George Peabody, director of the emerging technologies advisory service at Mercator Advisory Group, Maynard, Mass. “There’s a fair amount of real estate that can be freed up if you can start pulling cash registers out of stores,” he notes. “You can put out more merchandise, or create more space for customers’ enjoyment.” Making the devices even more attractive is their cost. Peabody estimates an iPod touch modified to swipe cards comes to about $500, compared to thousands for a full-fledged register.

Handsets also allow store personnel to show off and order items that may be out of stock, allowing for the items to be shipped to customers and avoiding a lost sale.

Ultimately, Peabody says the point of sale could evolve to include handsets, fixed, customer-facing tablets situated around the store, and the conventional checkout line. “We don’t know where this is going to end,” he says.