The Appleization of Nordstrom and Home Depot
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I don't wear cologne. I can never apply it properly, and I think no matter how little I use I end up smelling like the guy who leaves his shirt unbuttoned a bit too much (you know). I also don't like the smell of most deodorants at the grocery store… they're all a bit too fratty to me. Fortunately I have found the perfect compromise: designer deodorant. It's a unique smell, more subtle than cologne, and far cheaper. Just the other day, I found myself at Nordstrom (NYSE: JWN) buying a new stick of Boucheron (smell best described as lemons ripening in the top drawer of an old wood cabinet). Something interesting happened after I made my selection, though. Instead of going to the counter to pay, a salesman whipped out an iPhone (actually a wi-fi connected iPod Touch) and took my card right where I stood. Similar to the experience at the Apple Store, the salesman then emailed me my receipt. It was seamless.
Apparently, we can expect more of this in the future. Since rolling out mobile point of sale last year, Nordstrom has seen significant sales increases; Q1 2012 sales rose 15.3% over Q1 2011. Also, as Forbes points out, "the average number of items sold and the average selling price both increased" in 2011. With more points of sale, Nordstrom can of course make more sales. Furthermore, Nordstrom anticipates that by Q4 2012, the 6000 mobile devices currently in use will have the same level of functionality as their fixed terminals. In other words, there soon will be no need for a fixed terminal except for the 90 year-old paying with cash.
Home Depot (NYSE: HD) has also implemented the mobile point of sale system to great results. This is an especially interesting study because Home Depot is designed in the grocery store format of funneling customers to a row of registers. Home Depot calls their system the "F.I.R.S.T phone" (Find, Inquire, Respect, Solve and Thank) and has two tiers of functionality: full and junior. The junior devices are not point of sale systems but do allow the sales associate to more efficiently check inventory and assist customers in locating items. Less than a year after their debut, Home Depot reported more than 100,000 transactions per week on the devices.
Apple (NASDAQ: AAPL) re-imagined the retail experience and achieved incredible results. As Nordstrom and Home Depot further build out their mobile device usage and understand it is not just a neat gimmick, but a tool that has a real impact on sales, other retailers will follow. A recent RIS survey conducted among the attendees at the Retail Technology Conference found that 93% of respondents have at least some plan for mobile POS in the future. 64% of which plan full mobile capability with checkout. The survey, entitled, "What Will it Take for JCPenney (NYSE: JCP) to Succeed?" also found that 9% of respondents believed that IT upgrades were the most important issue in JCP's transformation. Other IT upgrades and mobile device innovations that have been proposed include everything from delivering ads directly to the customer's own phone based on which aisle of the store they are in to full app integration with the physical shopping experience. The first movers adopting this technology early will be the long term winners in retail.
TheLaowai has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple and The Home Depot. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
