Gap Piloting Apple Mobile POS Units, But Broader Impact Is Minimal

Written by Evan Schuman
December 8th, 2010

The Old Navy group within The Gap has started testing Apple’s mobile POS system, technology very similar to what Apple uses in its own stores.

From The Gap’s perspective, this is a perfectly fine arrangement, with the chain getting systems that have proven to work under retail battlefield conditions, the ability to share in a little of the Apple buzz among its targeted younger demographic and likely attractive discounts given it is the first major chain to try it. (The fact that the boards of both Apple and The Gap have execs from each other doesn’t hurt with those price negotiations, either.)

The real question, though, is not whether this move makes sense for The Gap, but whether it’s something that other chains should now seriously consider. There are plenty of mobile applications—and far more developers eager for work—that can deliver similar if not identical functionality. Will the convenience of using Apple’s devices make that the way to go?

Unlikely, given Apple’s history of charging a strong premium for its brand. After a few months, consumers are not likely to care what make your mobile POS units are. How many of your regular customers could even name the POS brand you’re using today? With no ongoing customer draw, it’s unlikely Apple would be able to deliver enough value to match its pricing.

Another consideration: Historically, companies view the new technology as slightly different versions of the old technology. Don’t think of mobile payment merely as a way to make POS machines small enough to fit in an associate’s pocket. Differentiate as much as possible.

Why not use the units to interact with CRM and loyalty cards, via either a swipe or interacting with an RFID tag? These abilities would now help the associate make sales rather than only tendering them.

As an associate talks with a customer, not only could that associate glance at purchase and browsing history of that customer, but the associate could take notes from the customer conversation. Those notes could be added into the CRM file, accessible to another associate a week later—or, for that matter, to a call center representative or even software behind your Web site.

Mobile payment has the potential to be the greatest retail advance since the Web. Connecting with an established proprietary player such as Apple could prove dangerously limiting. That’s fine for small retailers, and that market could be highly profitable. But for major chains, it is likely not the optimal choice.


4 Comments | Read Gap Piloting Apple Mobile POS Units, But Broader Impact Is Minimal

  1. Lyta April Says:

    While I concede that mobile devices would be great for accessing a CRM file, etc. in-store (let’s hope someone thought far ahead enough to encrypt the transmission), I am still curious about merchandise security. When someone is swiping their iPhone in the back-corner of the store, what’s to keep folks from picking up stuff on the way out? Are we going to station our newly-mobile staff as a gauntlet at the front door? How much shrinkage are we likely to see on average?

  2. Evan Schuman Says:

    Editor’s Note: In many ways, this would be identical to smartcarts that also allow for faster checkout. Just as many chains (including Wal-Mart and Costco) do now, you do have someone at the door checking receipts against cart contents. Even highly visible periodic checks would likely reduce shrinkage enough. Shoplifters like techniques that work almost all the time. Gambling on spotchecks is not fun and is, therefore, a surprisingly effective anti-fraud measure.

  3. tb Says:

    Given the announcement a couple of weeks ago by the PCI counsel that they do not support any mobile payment apps at this time–aren’t GAP and other retailers that are passing card data through a mobile POS app on the hand held out of compliance? It is my assumption that the only “compliant” MPOS app would be one that runs on a web browser on the hand held.

  4. Evan Schuman Says:

    Not necessarily. As Walt Conway reported here last month, Gap may be perfectly in compliance if its acquirer approved the app.


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