Even if shoppers of Amazon.com's Prime Day event advertised as better than Black Friday found more to mock than to buy, the promotion last week marked the acceleration of an "on-demand economy" that other retailers can no longer ignore.
This economy, which enables consumers to purchase items at any time and get them delivered as fast as their appetite for shipping fees will allow, is fueled by the prolific use of mobile devices and other communication technology. We now live in an age where customers expect instant gratification from any retailers with a website or an app.
"As a predominant direction, consumers absolutely are becoming more driven by the immediacy of that mobile device," said Tim Sloane, director of emerging technologies advisory services for Boston-based Mercator Advisory Group. Even though these changes occur gradually, the trend is clear, he said.
As such, merchants are going to need to adopt point of sale systems that can help them accept mobile and online payments, monitor inventory to better deliver immediate service and communicate with customers in or near their brick-and-mortar locations. The product developers, acquirers and independent sales organizations that can deliver all of these services will have a footing in the "on demand" economy.
"All consumer-facing and consumer-touching technology infrastructure is going to move to the mobile cloud," Sloane said. "It's going to use one of the mobile operating systems and it is going to use the mobile hardware as security becomes baked into those devices."
Square has also steered its micro-merchant client base into e-commerce, fueled in part by a partnership with Bigcommerce and Weebly. In a similar move, earlier this year Bindo offered its merchants entry into e-commerce through Bindo Storefront.
"This sort of economy is focused around one thing that humans value greatly, and that is instant gratification," said David Bozin, vice president of growth development at Bindo, which provides its merchants with an iPad-based point of sale system that includes various business tools, including inventory management.
But it is the brick-and-mortar merchants, such as grocery stores, restaurants, department stores or gift shops, that are driving the "on-demand" economy by letting consumers buy items online and then pick them up in-store the same day.
Many merchants are in need of real-time inventory capabilities to manage these mobile purchases, Bozin said. "It's changing the way consumers shop and it forces older business models [in payments] to dramatically shift their approach."
The signals have been mounting for some time. Payments technology provider Vantiv acknowledged the trend toward cloud-based integrated POS systems when acquiring Mercury Payment Systems in May of 2014. That purchase gave Vantiv access to a network of more than 3,000 point of sale software developers serving small and mid-size businesses.
Any technology that brings the merchant and the consumer closer together ultimately requires the merchant to manage additional platforms, and the merchant acquirer to be knowledgeable of them.
As independent sales organizations start to see more services, such as Apple Pay, take over part of their role, they will find it increasingly difficult to scale without altering their approach to market, Bozin added.
"They have to partner with software and hardware creators and invest in new paradigms and technology in which merchants and consumers better connect," Bozin said.
Because of better comfort levels with all of the information available online or through a mobile device, consumers buy more things through remote devices without needing to see the product in the store first, Sloane said.
"You have to believe that the mobile cloud is going to do the same thing for small merchants," Sloane added. "They will see solutions that provide the basic POS functions and expand it to different payment types and business services, and they will take that leap."
As such, merchants will be less concerned about an ISO walking into the shop to pitch a certain type of POS system, Sloane said. "That raises a lot of questions for the small ISOs."