When Smoothie King decided to change its point of sale system, the company didn't just make alterations to what was currently in more than 600 stores. It scrapped the whole thing.
"As far as our guests are concerned, it's really about what's happening when they visit a story and what's happening on their tablet or their phone," says John Lapeyrouse, Smoothie King CIO. "The opportunity to replace point of sale systems doesn't come along very often."
Smoothie King switched to Revel, an iPad point-of-sale based system. This is more franchisee-friendly, he says, gives the company "flexibility for the future," with "mobile wallet being one of those things that is changing."
The Revel system integrates Apple Pay, but Lapeyrouse says "the reality is, our guests will decide" which payment systems they prefer.
Apple Pay Introducing New Mobile Wallet Marketplace
Apple pushes Pay as one way to stop security breaches. That's because a retailer doesn't store credit card information. Instead, Apple stores that data, and gives retailers a "token" that stands in for payment.
"The credit card isn't transmitted during the transaction, and the retailer will not have the credit card number in [its] systems," says Jim Maholic, author of Business Cases that Mean Businessand vice president in Hitachi Consulting. That way, even if the retailer is hacked, the customer's information isn't put at risk. "As a CIO, I [would] feel better if I have more customers using Apple Pay, because I haven't exposed their numbers to risk."
That said, there will be limits to who can use the technology -- namely, that Apple Pay is available only on iPhone 6 and iPhone 6 Plus. This could be a good thing or a bad thing for retailers.
"There's a certain number of affluent customers who use the iPhone 6," says Maholic. If one store offers Apple Pay and the other doesn't, those well-heeled customers are more likely to walk in the Apple Pay door. "Now that I've got that customer, it's harder for somebody to steal that customer."
Jerry Sheldon, analyst at IHL, says the Apple Pay rollout is too fresh to judge yet. "Major retailers are the first adopters, and what will happen is you'll continue to see adoption primarily in the Tier 1 space," he says. Tier 1 refers to retail or hospitality chains with more than $1 billion in annual revenue.
The rollout also presents a "which came first, the chicken or the egg" sort of problem, Sheldon adds. "Retailers need to get a certain level of mindshare of people who want to adopt, but how do you get mindshare on the front end" if Apple Pay isn't in place?
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