Downtime: The True Cost of Retail Network Outages

What is downtime?

Downtime, in a retail context, is any period of time when the point-of-sale (POS) systems are unable to process transactions. Usually, this is caused either by an in-store Wi-Fi failure (or wired Ethernet failure in the case of older systems) or a local mobile network outage. It might seem trivial, but even a few minutes of downtime can have an immediate impact on revenue. For multinational retailers, this can swiftly snowball into lasting damage to brand perception, customer retention, and profitability.

Increasingly, customers expect their stores to offer a variety of digital payment methods, from contactless card payments to Buy Now, Pay Later (BNPL) options. While these are effective ways to improve the in-store experience, they place a greater burden on in-store mobile data requirements. Now more than ever, stores need to find a connectivity solution that eliminates the risk of downtime from their checkout experience. With the proportion of cash payments in decline globally, the need for well-connected POS terminals is now essential to developing a sustainable retail brand.

The immediate impact of POS downtime

The most direct consequence of POS downtime is missed transactions. Particularly at busy times of the year, customers will readily leave a queue rather than wait for an undetermined period for the POS systems to come back online.

Retailers have been known to switch to cash-only transactions in the event of downtime, though this is hardly an ideal solution from a customer or vendor perspective. In an increasingly cashless world, even this fallback may soon become obsolete.

While the average cost of downtime per minute can vary depending upon the size of the retailer, the figures involved can be eye-watering. A Gartner survey from a decade ago estimated that the average cost of downtime was $5,600 per minute. This average figure was skewed by the larger enterprises, but nevertheless a later report by Avaya calculated that averages can range from $2,300 to $9,000 per minute of downtime, depending on company size and industry type. Even for small businesses, just a minute of downtime can equate to as much as $427 in lost revenue.

The true cost of POS downtime

In the customer-facing world of physical retail, missed transactions are only a fraction of the wider damage that POS downtime causes.

1. Customer retention: Customer retention is key to physical retail. In nearly every sector, building and maintaining customer relationships is more valuable than pursuing new ones. Developing lasting and encouraging repeat transactions is essential to a sustainable business model, and network outages are a barrier to a smooth customer experience.

2. Brand trust: Brick-and-mortar stores are where businesses can physically communicate the value of their brand to the public. A successful store is based on a combination of interior design, attentive customer service and a well-thought out product selection.

   No matter how impressive the physical space, any store without reliable POS connectivity will seem unprofessional.

3. Wait times: Waiting in line is one of the key pain points of physical shopping, and wait times can determine the success or failure of a store. Line management is itself an entire field of study, such is the importance of waiting times to physical and online retailers. Longer-than-average wait times are proven to decrease customer traffic and satisfaction, and increase the number of negative online reviews. While lengthy POS outages may require stores to close entirely or switch to cash-only transactions (where possible), even outages of a few seconds or minutes can have a significant impact on wait time, and, by extension, revenue.

Seasonal challenges

The physical retail space thrives on seasonal shopping. The annual success of a store can hinge on just a few weeks each year. While periods like Black Friday weekend and the holiday sales are usually a highlight for retailers, they also require careful preparation. POS errors during these periods can be even more damaging than normal. 

They’re also more likely due to the increased strain on the systems and greater bandwidth demands of a crowded store. It is during these essential times of year that in-store networks are often stretched to breaking point.  

This issue is only expected to become more pressing in the future.

• The number of people doing their shopping in person continues to rise

  • While physical retail continues to grow from strength to strength, businesses need to prepare for the projected rise in digital payment methods, ensuring that they have a flexible and scalable in-store connectivity strategy in place.

• The number of connected devices and the associated rise in global data demand are growing exponentially

  • This may result in a “bandwidth bottleneck”, where demand for mobile data begins to overtake availability, and online services are slowed or made unavailable. Technological advances like the launch of public 5G networks counter this bottleneck by enabling the transmission of far greater data volumes at lower power. For retailers, it's essential to prepare for the ongoing surge in mobile data usage by augmenting the connectivity of their POS systems with at least one backup network (also known as failover connectivity). SafeRetail by 1GLOBAL automatically reconnects POS systems to one of 600+ alternative mobile networks in the event of a local signal failure.

A barrier to operational expansion

In-store connectivity is a major consideration and expense when opening a new store. As a result, complex connectivity costs and risks of network outages can ultimately slow or discourage expansion into new markets and regions. This is particularly true for multinational chains – international brands often face the unwelcome prospect of negotiating, managing, and billing new connectivity contracts for every country of operation. These additional accounting overheads, coupled with the increased downtime risk of relying on a single operator in every country of operation, can quickly discourage brands from seeking otherwise lucrative opportunities in new markets.

A knock-on effect is the need to supply a consistent level of network performance to all stores, regardless of location. Ensuring a unified customer experience is key to maintaining a strong brand identity.

To sidestep these common problems, retailers require an international POS connection. SafeRetail uses the 600+ carrier-strong 1GLOBAL mobile network to provide continuous high-speed POS connectivity across 190+ countries.

By connecting to the 1GLOBAL network, retailers can take advantage of another key tool in avoiding downtime: network redundancy.

What is redundancy?

Network redundancy is a broad term that describes how mobile networks protect themselves against outages. With a redundant infrastructure in place, networks can continue to provide service even if one or more elements in the system fail.

For physical retail stores, a redundant POS network is essential to avoiding downtime. SafeRetail by 1GLOBAL instantly reconnects POS systems to one of several local mobile networks in the event of a primary network or Wi-Fi outage, eliminating connectivity downtime and allowing business to continue as normal.

Wi-Fi and POS Downtime

With the ongoing increase of wireless POS systems, a growing number of retailers are using Wi-Fi to connect their terminals. In-store Wi-Fi is quick to set up and relatively inexpensive, though it also raises new issues for retailers.  

Wi-Fi is necessarily bound within a small area, and offers stores less physical flexibility than a mobile data connection, often requiring them to purchase and install costly Wi-Fi boosters when a wider operating range is required. It also makes it harder to set up mobile stores, pop-ups, and event stands, because an alternative, secure, and cost-effective connectivity service must first be arranged. 

One of the most pressing downsides to a Wi-Fi POS connection is the inherent risk of connecting all terminals with a single internet provider. This exposes stores to a higher risk of downtime than using a redundant mobile network.  

Fortunately, services like SafeRetail can function as an instant failsafe to both Wi-Fi and data-connected terminals, automatically reconnecting them to a viable network connection the instant the primary connection fails.  

SafeRetail: eliminating POS downtime

SafeRetail is a service from 1GLOBAL that ensures reliable, cost-effective wireless POS connectivity for multinational retailers. By providing continuous access to 1GLOBAL’s worldwide 5G network, SafeRetail eliminates the risk of network downtime from all connected stores.  

SafeRetail connects all POS systems in all stores worldwide to the 1GLOBAL mobile network. This network comprises over 600+ partner carriers in 190+ countries – if an outage does occur, SafeRetail will instantly reconnect all affected terminals to the best available local network, providing uninterrupted trading and ensuring a smooth customer experience, with no risk of network downtime.  

Retailers can use SafeRetail in two ways: 

• As a primary connectivity provider: The 1GLOBAL network can be used as the default mobile network for all wireless POS systems worldwide, delivering a consistent standard of high-speed mobile data to all stores worldwide.

• As a backup connectivity provider: In the event of an outage in the default local mobile or Wi-Fi network, POS systems enabled with SafeRetail will instantly and automatically reconnect to the 1GLOBAL worldwide mobile network, ensuring continuous POS connectivity.

SafeRetail is specifically designed for multinational retailers.

• The worldwide 1GLOBAL network means a consistent level of connectivity across all stores in all countries of operation.

• One single centralized platform facilitates simple management of all POS systems in all stores worldwide and provides in-depth analytics.

• One global network means one single, flexible, and scalable contract for all stores.

Embracing new retail opportunities

While physical retail continues to be the preferred format for most shoppers, the ways in which we shop in person are changing. New technologies are enabling innovative ways for stores to deliver a heightened customer experience in every aspect of the retail environment.

The rise of wireless terminals has eliminated the traditional checkout queue from many establishments and enabled retailers to explore new, mobile retail forms while still permitting customers to pay with their preferred digital payment method. SafeRetail provides the assurance retailers need to explore these avenues while protecting their revenue from downtime and maintaining POS connectivity anywhere they process transactions. Retailers who act now to embrace these innovations can position themselves at the forefront of the next wave of in-store experiences.

Downtime is a major reason why retailers are switching to eSIM-based POS systems, though far from the only one. Learn more on this topic by checking out our list of the 7 reasons for the growth of iOS POS terminals.