Perhaps the most insightful conversation I had at RetailNOW 2018 in Nashville – and I talked with hundreds of attendees there, believe me – was my chat with 80-year-old Jim Hart. A retired reseller and RSPA Life Member, Hart stopped by the show to check out the industry’s progress. Hart shared with me that in the early 1990s he was caught in the crossfire of a generational shift when mechanical cash register dealers gave way (not necessarily willingly) to younger resellers of electronic equipment. Hart said that back then when he offered his opinion that the association should bet the farm on the next generation, many veteran members called him four-letter names ... and none of them were “Hart.” Looking back, it seems both obvious and quaint that mechanical dealers were fighting for a past that had no future.
My conversation with Mr. Hart got me thinking: Are we caught in the crossfire of another contentious transformation in 2018? We’ve already seen tablets and mobile devices expand the standard point of sale technology stack and, in many situations, replace it altogether. Also, the traditional hardware/software reseller is giving way (not necessarily willingly) to the managed services provider; the MSP acronym was referenced a record number of times on the RetailNOW main stage and was the focus of several breakouts.
I can totally wrap my brain around both of those trends and I’m guessing you can too. But we have to understand this is only the beginning of a major transformation in our channel. What’s still confounding my cranium are these questions:
- The big hairy scary question is: what’s next? That question can be applied to technologies, business models, mergers, acquisitions, and the fate of individual organizations in the POS ecosystem.
- Why are some resellers just now moving down the as-a-Service business model path?
- Is there enough time for them to catch up and build a profitable, valuable business model? Or will the Goddess of Commerce slam the door shut before they’re ready?
- With larger resellers adding software capabilities and direct ISVs becoming more prominent, will there be any room in the retail/hospitality IT market for more than a few dozen regional and local SMB resellers?
- What will barely profitable resellers do when their payment processor (who also provides them with hardware and software) rolls back their currently generous spiff program?
- Will the new POS MSP business model be lucrative enough to attract and retain hundreds of talented millennial owners?
- Who are the retail and hospitality solution providers of the future? Who will walk the show floor at RetailNOW 2023?
- Will the millennial generation join our community or won’t they see the need for collaborating with us and with each other?
Don’t let my hand-wringing questions lead you to believe RetailNOW 2018 was a bust or the POS channel is in shambles. Far from it. This year’s event was a huge hit, attracting nearly 2,000 IT professionals from North America. Every VAR I talked with in Nashville was experiencing a year that ranged from “good” to “fantastic.” The most common reasons for a strong 2018 were riding the coattails of a continued growing economy and MSP-like offerings. One reseller told me, “I’m doing great overall, but it sure as heck isn’t from selling POS, I can tell you that.”
I’ll wrap up this stream of consciousness by sharing with you a quote that was part of my RetailNOW presentation “How Leading POS Resellers Implement Recurring Revenue Products & Services.” It’s from the Technology-as-a-Service Playbook and shows the path to future relevance for high-initiative VARs and ISVs: “Channel partner models will get re-thought and reconstructed. Many resellers will perish in the transition. New kinds of partners will be added.”
Are you taking steps today to ensure you become a “new kind of partner” in 2019?
Other thoughts and observations from RetailNOW 2018:
- In March, a longtime reseller told me of his plans to morph his business away from leading with POS hardware/software to talking services first and even accepting small services-only contracts. Yes, the up-front cash is far less, but the thought is to prove your worth to the merchant and then sell them a complete system when they need it. This reseller gave me an update at RetailNOW that his plan is going well, but it’s not for the faint of heart. “You have to enjoy the struggle. You have to enjoy the fight,” he said. “And there’s no finish line with this either. It’s like a college coach who has to replace his current team and get new talent every year. I always have to be adding new services and going after new customers.”
- A growing reseller asked me during the Sunday night reception at RetailNOW for book recommendations for employees who he wants to increase their leadership skills but not necessarily shift into management. I looked up my list of 120 recommended reads on my phone and shared with him these six titles: (1) The 7 Habits of Highly Effective People, (2) Decisive, (3) Execution, (4) The Obstacle Is The Way, (5) Ownership Thinking, and (6) Talent Is Overrated.
- Well-known channel editor Mike Monocello announced his new XaaS Journal website at RetailNOW and shared several helpful points during his “Make Managed Services A Reality” breakout. When discussing selling managed services to merchants he said, “Pitch to merchants the concept of a perfect world. Tell them ‘you’re paying me so you don’t have to worry about these issues anymore.’” But Monocello cautioned VARs to be selective with who they pitch managed services to: “There is such a thing as a customer who isn’t a good fit for managed services. You have to assess their entire network so you know what you’re getting into. Managing a Mad Max environment won’t be profitable for you.”
- David Shaw, the Chairman of highly respected reseller Postec in Atlanta, shared behind-the-scenes details of his company’s growth during his breakout “Business Valuation: Working on My Business.” Shaw frequently noted that fortune favors the prepared. “When we were ready to sell — physically and mentally — we got a formal valuation of our business from an advisor. There’s value doing this on an annual basis,” Shaw said.
- A high-performing reseller owner shared with me the core reason his 2018 has been strong: hiring a sales assistant. The owner is historically his company’s top sales person, but his facetime with prospects and customers was limited by administrative duties. So he hired an admin who has high attention to detail to complete paperwork plus high initiative to email clients to help generate new sales. This has been such a boon to the business that the owner is in the process of hiring an admin for his highest performing full-time sales rep as well. Related side note: I’m planning to develop a pre-employment aid – it will include a hiring process, assessment tools, and suggested questions – to help VARs who want to hire admins to boost their sales. I already have pre-employment job aids for sales and techs; reach out to me if you’d like to see those.
- I’ll post additional RetailNOW highlights in a future blog post but feel I need to end this one with two giant THANK YOUs. First, the panelists for my recurring revenue breakouts were incredibly insightful and highly entertaining. I can’t tell you how many attendees stopped me in the hallways to share positive feedback about our sessions. Jeremy Julian of CBS NorthStar, Scott McClannahan of Simple POS Solutions, Mike Maudlin of C&M Business Machines, Chris Rumpf of Flyght, and Jim Stewart of NCC deserve major kudos for their candor and willingness to raise the collective IQ of our industry.
- I also want to thank the many attendees who offered me compliments on Worldpay’s new “On The Edge with Jim Roddy” podcast. I started the pod two months ago to appeal to a younger generation of channel executives, and it looks like it’s working. All but one attendee who shared podcast praise was under 40 years old. Take a minute and subscribe to the podcast today – even if you’re an old geezer like me.