Lowe’s is licensing its checkout software to other retailers

The platform offers point-of-sale software for in-store systems and mobile devices, including customer-facing apps. Similar to how retailers commercialized their stores with retail media, licensing out checkout tech could be another potential revenue stream that takes advantage of the technology retailers have already built for themselves. The company declined to provide pricing details, but the service has both usage and subscription-based payment models.

Retailers can use point-of-sale hardware they already have in their stores, as long as they’re not under contract with a vendor that prevents such a use. The software can integrate with other commerce platforms retailers use, such as Shopify or Medusa, as well as other pricing, promotion or inventory tools.

“For mid-size retailers, if you already have some hardware, you don’t have to make the capital investment again,” Ankur Mittal, svp and chief technology officer and managing director of Lowe’s India, told Modern Retail.

Mittal, who oversees Meridius, said other retailers over the years had asked Lowe’s if it would commercialize the checkout technology it has built over the past five to seven years. And so, the company began doing so over the past year, pulling the technology out of the Lowe’s ecosystem to create a product other retailers could implement.

The company hasn’t signed any deals with retailers yet, according to Mittal. But, he said, he was seeing a lot of interest at NRF, with guests demoing the system for much longer than the 10-20 minutes each he had expected. “There was so much interest and people were asking so many questions that some of the demos went up to an hour and a half,” he said.

Mittal said retailers have often faced long wait times when working with hardware vendors on integrated software, so Lowe’s wanted to provide something that can be used across any brand of hardware and is easily customizable.

“You don’t have to go to the vendors and stand in the queue; you can make most of the changes by yourself,” Mittal said. “Every single retailer is looking for a technology where they can control a portion of that by themselves, so that they don’t have to go to the vendors again and again for experimentation.”

Meridius also includes AI components for theft prevention and scanning accuracy, as well as for chatbots that help store associates troubleshoot.

This is not a play where Lowe’s would get any data from other retailers, Mittal said, adding that Lowe’s is not going to host another retailer’s data in its ecosystem; that information will stay within the client’s system.

Still, don’t expect Lowe’s to be selling software to The Home Depot anytime soon — Mital said the company would not license the platform to another big-box, home-improvement retailer.

Kassi Socha, a senior director analyst for marketing at Gartner, said she expects other retailers and e-commerce platforms like Lowe’s to license certain capabilities like checkout.

It is “another signal that supports that general hypothesis that multi-brand retailers are focused on driving return for their heavy technology investments,” Socha said. “Retail media networks, a few years ago, were one of the first signals that read that multi-brand retailers are shifting into revenue-driving opportunities.”

There are few, if any, examples of U.S. big-box retailers that have licensed their checkout technology in this way. Still, other retail and e-commerce players have spun their technology into other business areas.

For example, American Eagle built out a logistics platform called Quiet Platforms that others can use, including other apparel brands — though the business has since struggled with reduced e-commerce fulfillment demand.

Instacart offers an enterprise platform of e-commerce software for retailers that spans from fulfillment to APIs and advertising. Instacart also has “connected store solutions” for retailers, such as smart carts and software that connects electronic shelf labels to its e-commerce platform. And Amazon has licensed out its “Just Walk Out” payment technology to retailers, as well as airports, stadiums and other venues.

“Some of the smartest retailers tend to do stuff like this, where they’ll create some sort of vertically integrated technology, and they know it’s the most successful iteration of it and that they can make a lot of money selling it to other retailers,” said Melissa Minkow, global director of retail strategy and insights for digital consultancy firm CI&T.

Third-party marketplaces and advertising networks are also ways in which retailers can leverage their existing platforms to generate revenue from other retailers or brands as clients.

“It just speaks to the era of retail we’re in, which is not fearing cannibalization and instead accepting the fact that your consumers are shopping everywhere,” Minkow said. “A lot of times your most strategic interests may seem to be in contradiction to conventional definitions of loyalty.”