Nordstrom's Mobile Checkout Difference

In what is likely the most complex mobile POS rollout yet in retail, Nordstrom by mid-July will deploy thousands of iPod Touches and other mobile mechanisms. The IT twist, though, is that the rollout is not tied to a single type of device. That means the chain's software developers have already nailed down an architecture where the heavy POS lifting is done on the back end, not on the mobile device itself. With an architecture like that, what's on the devices has to be relatively simple.

As a result, it should be easier for Nordstrom to quickly add new devices and new functions to the mobile POS system. Features that the iPod doesn't support, such as contactless payment, might be available on other devices. In theory, with a well-structured architecture, new devices could be swapped in on an as-needed basis. Unlike mobile POS pioneers Home Depot (which uses a highly customized handheld for its mobile POS) and Apple (which can only use Apple, naturally), Nordstrom can exercise its option to do small-scale experiments with devices from multiple vendors in the midst of its big rollout. That will also discourage developers from tying code too tightly to one device—giving Nordstrom the chance to do even more quick-hit experiments in the future.

The devices will go only into Nordstrom's main-line stores. However, the chain is also experimenting with tablets at its Rack stores and plans to expand its mobile POS based on what it learns from the initial rollout.

"We should have roughly 5,000 to 6,000 handhelds in our full line stores by the Anniversary Sale in July," Nordstrom President Blake Nordstrom said during an earnings call on May 12. "We will learn from these efforts and quickly add to this functionality with plans to have significantly more of these devices in our stores by year-end."

Nordstrom Spokesman Colin Johnson on Wednesday (May 18) added that the devices will mostly be the iPod Touches that the chain began testing in April at some stores in the Seattle area, which are outfitted with a "sled" to read mag-stripe payment cards. But the devices "may not all be iPod Touch," he said. Along with mobile checkout, the devices will also give associates full merchandise search capabilities using Nordstrom's recently integrated inventory system. The retailer also expects to roll out additional customer-facing functions at a fairly quick pace.

Nordstrom's might even be able to start dabbling in in-store mobile self-checkout for customers.Nordstrom's might even be able to start dabbling in in-store mobile self-checkout for customers. That sounds about as far from the retailer's classic high-touch, handwritten-thank-you-note culture as anyone could get. But Nordstrom is already tentatively heading in that direction, though certainly without abandoning its usual upscale human-touch approach. In recent months, the company has talked about how thank-yous might be delivered electronically to smartphones as a customer is leaving the store.

The chain is also still experimenting with all the other elements required to make mobile POS work. That includes department layouts, which Nordstrom's Johnson says are being reconfigured to make them more conducive to mobile POS. Nordstrom's already has electronic receipts, but no final decisions have been made about how to issue receipts to mobile POS customers who aren't carrying smartphones (or don't want to hand over their phone numbers).

Then there are even more basic logistical issues that we've talked about before: Where does an associate get shopping bags or stash hangers during the sales process? Will there be spots in each department dedicated to supporting mobile POS with those things? What happens to lost devices, and how secure are they in case of loss or theft?

The expectation has been that in-store mobile POS was daunting, because of the devices themselves—whether phones, PDAs or tablets, these are consumer devices that weren't designed for commercial use. But Nordstrom's big-bang rollout suggests that the devices aren't the big challenge. It took years for the chain to complete its unified inventory system that offered in-store, online and mobile customers all the same products. It took months to get Wi-Fi in all its main-line stores, so mobile devices would have a way of talking to the inventory and POS systems.

And it will take months or years before all the experiments with floor plans and other customer-experience elements are finished—which has to happen in tandem with Nordstrom keeping happy those customers who don't like having all that technology in their faces. Those who want instant thank-yous will have to coexist with those who still prefer a handwritten note.

Interestingly, Nordstrom is also putting iPads in its off-price Rack stores at the checkout—but not as a POS device. For now, the iPads are strictly for letting customers sign up for the Rack Insider loyalty program. Whether these devices will become transaction enabled will probably depend on how things go in the main-line stores.