March 22, 2013

Cash registers: Going out of business?

Increasingly, stores are turning to smartphones and tablets as a more convenient checkout tool.

By ANNE D'INNOCENZIO The Associated Press

NEW YORK - Ka-ching! The cash register may be on its final sale. Stores across the country are ditching the old-fashioned, clunky machines and having salespeople -- and even shoppers themselves -- ring up sales on smartphones and tablet computers.

click image to enlarge

A salesperson at Barneys New York uses an iPod Touch to record a customer’s purchase. Led by the Apple example at all of its stores, more retailers are ditching clunky registers while freeing up space and salespeople.

The Associated Press

click image to enlarge

A sales staff member at Barneys New York uses an iPod Touch to help a customer make a purchase. Stores across the country are ditching cash registers and instead having salespeople – and shoppers themselves – check out on smartphones and tablet computers.

The Associated Press

HERE'S A LOOK at how some major chains are responding to the changing shopping landscape:

Barneys New York, luxury retailer, plans to use iPads or iPod Touch devices for credit and debit card purchases in seven of its nearly two dozen stores this year.

Coach Inc., the upscale handbag maker, is using mobile checkout at half of its 189 factory outlet stores. The company is also testing them in a handful of its 350 regular stores.

David's Bridal, which operates 300 stores across the country, says that starting with 2015 all new stores it will build will not have any cash registers. It's in the midst of figuring out which mobile checkout technology to use and plans to start rolling out a mobile plan later this year.

J.C. Penney Co., a mid-priced department store chain, started rolling out iPod Touch devices late last year in its 1,100 stores. The goal is to have one in the hands of every salesperson by May. Penney says a quarter of purchases at its stores nationwide now come from an iPod Touch.

Nordstrom Inc., an upscale department store chain considered the gold standard within the retail industry, plans to phase out cash registers in favor of mobile checkout by next year. The company has handed out iPod Touch devices at all of its full-service department stores and Nordstrom Rack stores.

Sears Holdings Corp.'s Sears stores are using mobile checkout devices like iPads and iPod Touches in 360 of its 800 stores. It has no current plans to phase out cash registers as the retailer says it wants to fine-tune its strategy.

Urban Outfitters, a teen clothing company, ordered its last traditional register last fall and aims to go completely mobile one day.

Walmart Stores Inc., the world's largest retailer, is testing a "Scan & Go" app on an Apple device that lets customers scan their items as they shop, and then go to a self-service check terminal to pay. The pilot program started in 70 stores and is now in more than 200 stores in such markets as Denver and Houston.

Barneys New York, a luxury retailer, this year plans to use iPads or iPod Touch devices for credit and debit card purchases in seven of its nearly two dozen regular-price stores. Urban Outfitters, a teen clothing chain, ordered its last traditional register last fall and plans to go completely mobile one day. And Walmart, the world's largest retailer, is testing a "Scan & Go" app that lets customers scan their items as they shop.

"The traditional cash register is heading toward obsolescence," said Danielle Vitale, chief operating officer of Barneys New York.

That the cash register is getting the boot is no surprise. The writing has been on the wall for a long time for the iconic machine, which was created in the late 1800s. The register was essential in nearly every retail location by the early 1900s, but it now seems outdated in a world in which smartphones and tablets increasingly are replacing everything from books to ATMs to cameras.

Stores like smartphones and tablets because they take up less floor space than registers and free up cashiers to help customers instead of being tethered to one spot. They also are cheaper: For instance, Apple Inc.'s iPads with accessories like credit card readers can cost a store $1,500, compared with $4,000 for a register. And Americans increasingly want the same speedy service in physical stores that they get from shopping online.

"Consumers want the retailer to bring the register to them," said Lori Schafer, executive adviser at SAS Institute Inc., which creates software for major retailers.

J.C. Penney, a mid-price department-store chain, said the response by customers has been great since it started rolling out iPod Touch devices late last year in its 1,100 stores. The goal is to have one in the hands of every salesperson by May. The company said that about a quarter of the purchases at its stores nationwide now come from an iPod Touch.

On a recent Thursday afternoon at a Penney store in the Manhattan borough of New York City, Debbie Guastella, 55, marveled after a saleswoman rang up three shirts she was buying on an iPod Touch.

"I think it's great," said Guastella, who lives in Huntington, N.Y. "The faster the better."

It's been a long fall for the cash register, which innovated retail as we know it. The first register was invented following the Civil War by a little known saloon owner. Before then, most store owners were in the dark about whether or not they were making a profit, and many suffered since it was easy for sales clerks to steal from the cash drawer unnoticed. But by 1915, cash registers were ubiquitous in stores across the country, with more than 1.5 million sold by then.

More recently, stores have been looking for ways to modernize checkout. Since 2003, self-checkout areas that enable customers to scan and bag their own merchandise have become commonplace in grocery and other stores. But recently, there's been a push to go further.

Even though sales of traditional cash registers have continued to grow in recent years, companies that make them are racing to come up with new inventions and technologies to meet growing demand.

NCR Corp., formerly known as the National Cash Register Co., was the first to manufacturer the cash register on a large scale. But last year, the company that also makes ATMs, self-service checkout machines and airport check-in kiosks, launched a program that merges its software with the iPad. This allows store clerks to detach the iPad from the keyboard at the counter and use it as a mobile checkout device

"Retailers have more flexibility and more opportunities to change the shopping experience," said Mark Self, NCR's vice president of retail solutions marketing.

Stores themselves also are taking their cues from the success of Apple. The nation's most profitable retailer moved to mobile checkout in all of its stores in 2007. In 2011, Apple began allowing shoppers to check out their purchases using their iPhones.

Take upscale handbag maker Coach, which is using iPod Touch devices at half of its 189 factory outlet stores. The company also is testing them in a handful of its 350 regular stores.

The move has enabled Coach to start slimming down its registers to the size of small podiums, freeing up space on walls to build shelves to showcase more product, said Francine Della Badia, Coach's executive vice president of merchandising.

Della Badia, who says the additional space will be used for new shoe salons and other purposes, said most importantly, the mobile devices allow store staff to build "a more intimate connection with the customer."

Some retailers have decided to go completely mobile. Urban Outfitters, which operates more than 400 stores under its namesake brand, Anthropologie and Free People, announced in late September that all sales eventually will be rung up on iPods and iPads on swivels located at counters. The company didn't give a timeframe for when it would go completely mobile.

Urban Outfitters had given iPod Touch devices to its sales staff two years ago and the move has been very well received by shoppers, said Calvin Hollinger, the company's chief information officer in his address to investors.

Nordstrom, an upscale department-store chain that's considered within the retail industry to be the gold standard in customer service, also plans to get rid of registers altogether.

The company handed out iPod Touch devices to its staff at its 117 department stores nationwide in 2011. And by late last year, it did the same for its 110 Nordstrom Rack stores that sell lower-priced merchandise. Nordstrom, which already has removed some of the registers at its Rack stores, said it aims to phase out registers by next year.

Colin Johnson, a Nordstrom spokeswoman, said it's too early to draw any conclusions on how mobile checkout has influenced buying, but the company is learning about which technologies work best.

"We see the future as essentially mobile," Johnson said. "We don't see departments in our store as being defined by a big clunky cash register."

Not every retailer is quick to ditch registers, though. After all, there are still logistics to figure out. For instance, most retailers don't accept cash payments on mobile devices. But if they start to do so, where will they put the cash that would normally go into a register?

Additionally, sales staff walking around stores armed with mobile devices could turn off shoppers who would prefer to be left alone in aisles. Richard Robins, a 67-year-old semi-retired investment fund manager from Redonda Beach, Calif., says he would like the convenience of mobile checkout but wouldn't want to be pressured from a sales clerk while he's in the aisle.

"I don't want to be hustled," he said.

To guard against making customers uncomfortable, some retailers including Penney are training their salespeople on when to approach shoppers -- and when not to.

For its part, Wal-Mart is putting checkout in the hands of the shoppers themselves.

The retailer is testing its "Scan & Go" app, which can be used on Apple devices such as iPads, in more than 200 of its more than 4,000 stores nationwide.

The app, which is aimed at reducing long checkout lines, requires that shoppers pay at self-checkout areas. So as it tests the app, Wal-Mart also is expanding the number of self-checkout areas in its stores.

"Our goal is to give choices to all of our customers however they want to shop," said Gibu Thomas, senior vice president of mobile and digital initiatives at Wal-Mart's global e-commerce division."

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