Not Your Parent’s Lemonade Stand

Posted by George Mulhern on December 16, 2011

As a former Partner at a Venture Capital firm, I am always on the look out for entrepreneurial talent. Recently, I had the pleasure of discovering a 7-year old entrepreneur who lives in my neighborhood. His name is Lucas and he’s a cookie salesman. A week ago, on a cold and dreary December day, Lucas set up a cookie stand outside his house. Given the weather and his location, I wouldn’t have bet on Lucas making more than a few bucks. Later that day I was surprised to learn from my wife that he made $90 in about 90 minutes. The recipe for Lucas’ cookie success? His mom’s iPad. With about five minutes of communications work, Lucas’ VP of Marketing (aka Mom) posted a notice on the neighborhood Facebook page and sent out text messages letting everyone know hot cookies were ready to buy (Mom is also VP of R&D).

While I haven’t had a chance to talk to Lucas about his market cap, stories like this remind me of how easy it is to succumb to preconceived notions about old business models. When I was a kid my lemonade stand yielded enough pocket change to cover the cost of the operation and may be I had enough left over to buy a gumball.

Ten years ago, Lucas’ success would have been unheard of.

Today, the mainstream deployment of mobile devices and mobile payment systems is reinvigorating retail enterprises and creating a whole new brand of customer engagement. Verizon’s ever-popular “Susie’s Lemonade” ad campaign, in which a little girl named Susie builds a lemonade stand into an empire using mobile technology isn’t a far cry from Lucas’ success.

Apple’s iPad in this case, is a device that is changing the game. It’s relatively inexpensive, easy to use, easy to deploy, and can be used in a variety of ways. In some cases, brick and mortar retailers are using the devices to create functional point-of-sale systems. An instant or “pop-up” point-of-sale system can be set up in a matter of minutes. All you need is a tablet or smartphone, a card swiper like the free Square, a 3G/4G router from CradlePoint, and a receipt printer (even the printer is optional if your customers are ok with a digital or no receipt). For many retailers, this is an attractive option when compared to traditional point-of-sale systems. The cost is significantly less and set up is easier.

Retailers are also equipping their sales forces with these mobile devices and engaging customers on the floors. Lowe’s recently announced that it’s deploying 42,000 iPhones in stores nationwide. Speculation is that Lowe’s is looking to integrate iPhone point-of-sale devices with its broader mobile marketing efforts.

PacSun, a surf apparel company, has already taken that step with 300 of its stores nationwide. Store associates are equipped with iPads to place orders for customers via e-commerce on the spot. In addition, the device provides sales agents with product information and inventory ensuring that items are never out of stock and orders can be fulfilled across any channel. As a result, sales conversions have increased. The actual point-of-sale is becoming more and more fluid (just like Susie’s Lemonade).

Unstaffed kiosks and “pop up” stores are further evidence of the evolution of the traditional point-of-sale. The Seattle Seahawks recently deployed iPad kiosks to register more than 20,000 fans for the team's 15 open practices this summer. Ebay recently launched its “pop-up” stores in London featuring physical products on the street that consumers can browse and then purchase with their mobile phones by scanning QR codes.

Whether it’s an unstaffed kiosk or a traditional point-of-sale device, the common thread in the mobile retail revolution is Internet connectivity. Consider the following devices that may require connectivity in a retail environment:

  • Traditional point-of-sale terminals
  • Consumer mobile devices (phones, laptops, tablets) on public WiFi
  • Sales force mobile devices (phones, tablets) to facilitate customer interactions and improve customer experience
  • Employee computers and laptops
  • Unstaffed retail pop up kiosks (informational and point of sale)
  • “Pop-up” point-of-sale outlets (staffed or unstaffed)
  • VoIP Phones
  • Wireless video surveillance cameras
  • HVAC systems

Managing connectivity for three or four of the above solutions begins to make the proverbial wiring closet look a little messy, not to mention the potential security risks involved when processing customers’ credit card data. You can’t risk your HVAC vendor or customers on public WiFi having visibility to your POS transactions. In retail environments success not only hinges on the speed and reliability of the connection, but also the simplicity of the deployment.

For the sake of simplicity and security, retailers need to consider a robust connectivity solution that provides a virtual local area network (VLAN) for each application. A VLAN functions like a separate network, so you can have the POS and HVAC systems connected through the same router, but on different networks. The CradlePoint MBR1400, for example, has four VLAN ports and can be partitioned so it essentially functions like four routers in one. With the advent of the mobile revolution, retail is going to need more VLAN. Just like Christopher Walken in the famous “More Cowbell” skit on SNL, I’m telling you guys, “We gotta have more VLAN.”

So whether you’re a bootstrapping Lucas or a big box chain, mobile devices are coming. As products that were originally created for the consumer market, they can be used as low overhead solutions whose value proposition is an improved customer experience. Just make sure that the customer experience isn’t undermined by a complicated deployment and questionable connectivity. Without access to the Internet, Lucas’ iPad is just a fancy calculator and his record-breaking sales are just pocket change.