My initial images of the Dominican Republic, which I visited for BlueStar’s VARTECH 2018 Conference, reminded me of the point of sale channel. Most of the vehicles I saw on the road to the Hard Rock Resort in Punta Cana were mid-sized cars, SUVs, and trucks flowing with the traffic. But I also spotted several motorcycles driving in the wrong direction, none of those riders wearing helmets, and some bikes spewing thick clouds of exhaust. I also witnessed a couple pickups hauling debris along with a half dozen or so teetering passengers in the bed.
So how exactly does this tie into the POS channel? Many solution providers are heading in the right direction, focusing on a niche market and offering merchants a total solution, the foundation which is tailored software and services offered on a recurring revenue basis which grow the merchant’s sales and profits while also enhancing the customer experience. But there’s also a shockingly high number of resellers who are sputtering, heading the wrong way when the correct path is so obvious to everyone else.
The focus of attention at VARTECH was software developers, and that was no accident. About two dozen ISVs showcased their software in the ISV Pavilion which was prominently displayed on a stage overlooking the trade show floor. Also, VARTECH day two kicked off with “ISV Connect Live” in which every exhibiting software developer took center stage – literally and figuratively. I also saw data and heard anecdotal evidence that direct ISVs (those with no reseller channel) continue to gain in popularity while traditional POS resellers fight to remain relevant and scratch out a living.
My advice to the channel mirrors that of a traffic cop in the DR:
- If you’re going the wrong way, stop now and turn around as fast as you can. It’s not hard to figure out the right direction; follow the people who are moving quickly.
- If you’re going the right way but you’re steering a jalopy, watching others pass you by, it’s time to retool what you’re doing so you can move as quickly as the speed of change.
- If your vehicle rides smoothly, keep doing what you’re doing while also determining what you can do better. Your improvements won’t likely be hardware-related; focus on the software and surrounding services. And don’t fall asleep at the wheel, or you’ll wreck your nice ride.
Other observations, thoughts, and comments from VARTECH, held Sept. 16-18:
- The last time I saw a musician headline an IT event, he was more-or-less drummed off stage by show management, so my expectations for VARTECH keynote Randy Bachman weren’t too high. I mean what could business executives glean from the writer and performer of “American Woman” and “You Ain’t Seen Nothin’ Yet?” outside of how to tune a guitar? But I will remember Bachman’s mention of his “song-writing kit” for a long time (if not forever), and I encourage VARs and ISVs to do the same. Bachman said his kit was “a McDonald’s napkin and a smashed crayon” which he used to capture lyrics when he encountered song-inspiring situations. The two lessons here are (1) always be on the lookout for ideas that you can creatively apply to your profession so you can stand out and (2) have the discipline to write down those ideas so you can actually implement them. Or, as Bachman would sing, you should be “Takin’ Care of Business” every day, every way.
- If there’s a universally shared struggled in our channel, its difficulty hiring – and keeping – quality salespeople. “To be a good salesperson in our industry, you have to be both a geek and cool,” a reseller told me at the Worldpay booth. “That’s a rare combination. And when you get someone like that and he or she does a good job with your customers, they want to hire him (or her).” The reseller added that small VARs have the most difficulty because they can’t match the pay and benefits of larger organizations that want to lure that rep away.
- When I asked that VAR how he was doing with recurring revenue (he and I have discussed the issue before, which probably doesn’t surprise you), he responded, “If it wasn’t for recurring revenue, I wouldn’t be in this business anymore. The peaks and troughs you have with break/fix sales – I couldn’t do that anymore. I’m spending 10 days here (in Punta Cana) and I can do that because of recurring revenue. I have money coming in so I don’t have to be selling every day.”
- Another reseller who visited our booth shared with me that one of his learnings is that “parents will fund their kids’ activities no matter what the economy does.” Based on that principle, he’s focused on tailored solutions for dance stores and sporting goods retailers. I’m the father of a serious ballet dancer, and I can attest that this reseller is correct. I’d sooner sell my worldly possessions before I see my daughter go without proper point shoes.
- When I asked that same reseller about merchant retention (a common problem VARs discuss with me), he said it’s never been better for him. The reason for that is because he moved his friendliest tech into the role of Customer Advocate. This employee’s new role is to call current customers to ask them what they need, what they’re struggling with, and what could be better. Because she has technician skills, she can resolve most issues quickly and without needing to involve her colleagues. Her job is essentially to proactively “poke the bear” and solve smaller issues before they escalate into a customer retention situation.
- Most topics at trade shows today don’t surprise me – recurring revenue, ISV acquisitions, consolidation, and managed services – but the amount of chatter about kiosks at VARTECH caught me somewhat off guard. I knew they were increasing in popularity to help merchants replace manual labor with automation, but I heard discussions about several other applications as well. Perhaps the most interesting was the reseller who stopped by the Worldpay booth to say that he’s selling kiosks with wayfinding functionality in many healthcare facilities which is not his primary vertical. When visitors don’t know where they’re going, whose time do they take up? The staff, costing the facility more money. And what kind of customer experience is roaming corridors before the janitor hopefully points visitors in the right direction? Lousy. This reseller said, “There’s a growing demand for this, and solutions involving creative ISVs and hardware are out there.”
- The breakout session “Future Trends of POS/mPOS” featured a few memorable quotes including:
- “The population is graying and they’re still doing lots of shopping. How is my 88-year-old dad going to interact with kiosk technology? It's up to us to help make the technology simple and accessible.” Dan Lehotsky, Epson
- “We’re inundated with self-service requests today. And with younger shoppers more familiar with iPads, the interface for kiosks has become very simple.” Dave Murphy, Elo
- “Self-checkout isn’t becoming popular just because of labor cost savings. It’s because the millennial generation likes that kind of interaction. I see it as a must-have in your offering.” Matthew Inan, e-Nabler
- “You have to study these self-serve checkout kiosks. Of course they’re saving on labor, but we have to understand if they’re increasing shrink. As you move into general merchandise, the value of what’s being sold at self-checkout is increasing.” Karen Bomber, Honeywell
- “Free POS tries to make a one-size-fits-all solution. Nobody knows your segment of the market like you do. Chances are free POS is low cost hardware and generic software and doesn’t meet the needs of your market.” Jon Levin, Star Micronics
- Finally, here’s a trade show social media pro tip to vendors: I know you have to talk about yourself, but don’t only talk about yourself in your social media feed. Don’t just say, “Stop by booth #123”, “Check out our [product you want to sell]”, and “Did we mention our [insert self-congratulating attribute here]?” Share your observations about the event and highlight industry-germane information you gathered at the show. #ThankYou