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Live From CES: Cisco, Clover and Bank of America Rethink the Connected Store


Cisco wants to tell you where the nearest parking space is, and it wants to inform store managers when you've entered their parking lot. And Clover's point-of-sale system can help.

The Internet of Things is coming, and I'm not quite sure what that means. "There are a lot of moving parts," a Cisco (NASDAQ:CSCO) representative told me. That's putting it mildly; the rep quickly lost me as he delineated all of the services that Cisco now offers, or plans to offer, in its attempt to shake hands with the future.

There are services to track customers, and services to track products. There are services to process information, services to analyze it, and services to predict the future. In order to provide these services, there have been acquisitions: ThinkSmart, SolveDirect, Truviso and countless others. Building an empire requires alliances, too, and Cisco's website lists dozens of levels of certifications, specializations and partnerships, and countless sub-levels and sub-sub-levels.

The goal is for everyone to know everything, all the time. Or maybe it's to sell everyone your data. I'm not sure. In any event, Cisco wants to tell you where the nearest parking space is, and it wants to inform store managers when you've entered their parking lot. It wants to show you where the cooking supplies are, and it wants sales associates to know that you're looking for a spatula. It wants to track inventory, compare store performance, and predict customer behavior based upon weather patterns and football game schedules.

The rep told me that some of these services are currently being piloted in a retail chain, though he wouldn't say which. And with so many moving parts, what could possibly go wrong?

On the other hand, the Clover point-of-sale system – let's just call it a cash register – has only three components. There's a tablet with a card reader and scanner, a receipt printer, and a cash drawer (plus a few optional accessories).

You've probably seen Apple's (NASDAQ:AAPL) iPads used in stores. Square and PayPal both offer point-of-sale services for Apple's ubiquitous tablet, but there are two problems with this: Apple doesn't sell cash drawers and receipt printers, and it won't let you rebuild the operating system, either. Clover integrates everything, and runs a customized version of Android (NASDAQ:GOOG) with its own app store. The downside is that it's less mobile; the major components are all wired, which seems like an unfortunate and potentially serious compromise.

What's really interesting are the economics. Clover was acquired late last year by payment-processing giant First Data Corp., and is now part of a merchant-acquiring alliance with Bank of America (NYSE:BAC). I was told that a Clover Station costs about half of what you would expect to pay for non-integrated system – a compelling, if somewhat vague assertion. It can also be purchased as a service through Bank of America, rather than bought outright. A unique product, with strong distribution and a good price point…now that I understand.

See also:

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