How the iPad is boosting small-business sales

Retailers that use cloud-based, mobile checkout services saw a year-over-year jump in same-store sales, according to a new survey.

By Staff Oct 21, 2013 2:04PM

Apple iPad © Lee Jae-Won/ logo
By Laurie Kulikowski

NEW YORK (TheStreet) -- More and more small retailers are turning their Apple (AAPL) iPads into cash registers through cloud-based software, which in turn is feeding into higher store sales.

According to the latest data from ShopKeep's Small Business Insights Center, bricks-and-mortar businesses that use the company's point-of-sale (POS) software experienced 20% growth in same-store sales in the third quarter over the same quarter in 2012. Transaction numbers were up 13.6% year over year. 

ShopKeep POS provides cloud-based point-of-sale software for retail shops and restaurants. The software allows retailers to set up registers in just a few minutes with the ability to accept cash or credit cards with their choice of processor, view real-time sales from their phone or PC and track inventory and staff.

The results are based on data from 556 customers that were using the ShopKeep software during both time periods.

As owners become more comfortable with cloud-based business management software, sales are benefiting. Mobile software allows for quicker and easier transactions for both customers and salespeople. Shop owners, by analyzing traffic data, can better predict sales trends and make adjustments to inventory, for example.

Mobile payment companies, including Square and Intuit's (INTU) GoPayment, are also helping businesses accept credit card transactions quicker through card readers that attach to a mobile device. Last year, Square partnered with Starbucks (SBUX) to bring its services to 7,000 of the coffee chain's locations. 

ShopKeep says its customers are also typically younger, tech-savvy business owners.

"Our customers are typically new stores; a younger demographic and early adopters of technology," says ShopKeep Founder and CEO Jason Richelson. "They are not afraid to try new things and embrace change, and you can see that reflected in their business performance. Retail technology is evolving incredibly quickly and those stores that are evolving with it are clearly seeing great results."

The data also indicates a more positive outlook for fall retail sales and into the all-important holiday season, Richelson notes.

However, Richelson states small retailers "need to be smart about the promotions and products they push in order to make the most of the shorter retail holiday season this year."

Large retailers for the most part have been slow to adapt mobile technology as part of their operations, but a few forward-thinking companies like Starbucks, Apple, Urban Outfitters (URBN) and Home Depot (HD) were early adopters of mobile payments technology.

More and more retailers are getting on board with technology. Traditional department stores such as J.C. Penney (JCP) and Nordstrom (JWN) have joined the ranks to equip sales employees with devices to shorten the checkout time. Retailers are also realizing further benefits such as "increased savings, sales and customer satisfaction," according to an August 2013 article by Mobile Payments Today, citing a report by Yankee Group Technology Roadmap.

The survey data also highlighted markets including Portland, Chicago and Seattle emerging as rapid adopters of cloud-based POS. The three cities had the top sales growth percentages by city over 2012, while more established markets like Los Angeles and New York City experienced the highest overall sales by city, but lower growth rates, according to ShopKeep.

Brooklyn, N.Y., in particular, a city that had large early adoption rates of mobile POS systems, saw higher total revenues than Manhattan and Los Angeles, the data found.

By industry, quick-service restaurants had the highest overall sales via mobile technology, with mobile food trucks having the highest revenue increase during the third quarter.

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