POS Innovations: Many Ways to ShopBy Herman Mehling | Print
Innnovations from point-of-sale vendors--from kiosks, to self-checkouts to mobile devices--are making life easier for shoppers and busier for solution providers.Innovations in point-of-sale technology used to be about as exciting as, well, the unveiling of a new cash register from NCR or IBM.
But that’s in the past. Nowadays, the POS market is far more complex and diverse with an abundance of kiosks, self-checkout units and line-busting mobile devices, many of which are part of integrated POS platforms. And new products keep coming, as evidenced by things such as two-sided receipt printers and cellular phone-based POS card terminals that weigh less than a pound.
What’s driving all this innovation? Mostly, it’s consumer demand, said solution providers, distributors and vendors.
However, sales growth in POS technology also has something to do with the desire of retailers, fast-food chains and others to cut costs and improve efficiencies by installing the latest and greatest technology ahead of competitors. Recently implemented credit card regulations also are helping to fuel investment in POS technologies.
Be it consumer demand, regulations or retailer budget-consciousness, the transformation of the POS market from cash registers to a high-tech bazaar of innovative products translates to opportunity for solution providers. Their task is to deliver solutions that improve retailers’ technologies and, in many instances, rip and replace entire systems.
"Retailers, especially the smaller ones, are quite reluctant to invest in technology, but once they do, they tend to rip and replace everything," said Tim Lindsay, vice president of sales and marketing for Dalcom Consulting, in Greensboro, N.C.
Rip and replace
dalcom focuses much of its energy on ripping and replacing systems for retailers with 30 to 300 stores and annual sales of $50 million and $500 million, Lindsay said. "Our customers want fully integrated systems, with POS, merchandising, accounting all tied together, replacing patchwork systems," he said.
Typical of many VARs in the POS space, Dalcom builds systems around well-known brands, such as Dell, IBM, Microsoft, NCR and SAP. "Brand recognition is very important to our customers," Lindsay said. "They want to buy from leaders."
That’s why having top brands such as those Lindsay represents, and other popular ones such as Fujitsu, Intuit, Oracle and Radiant, goes a long way in helping solution providers get POS business.
the pos market has changed dramatically in the past five years or so because vendors and retailers have broadened the functionality of the cash register, said Jerry Sheldon, a consultant with IHL Consulting Group, a research and advisory company based in Franklin, Tenn.
"The cash register used to serve just one function—to quickly and accurately record sales," Sheldon said. "Nowadays, the POS system for most retailers has evolved in functionality and purpose."
A recent study by IHL revealed that 45 percent of respondents, including two-thirds of retailers with annual sales in the $1 billion to $5 billion range, said their POS solution was the central system in the store.
Sheldon said the advanced functionality retailers are implementing or looking to implement in their POS systems includes inventory visibility, customer service, training and check/credit imaging.
As advanced functionality requires greater capabilities in hardware and software, vendors and resellers are forced to continue to innovate, Sheldon said.
u.s. general retailers (all classes of retailers) spent $1.6 billion on POS technology and services in 2006 and were forecasted to spend $1.9 billion in 2007. This year, the estimate is $2.2 billion, according to IHL.
A number of triggers are driving demand for POS technology, including productivity, efficiency, cost savings, accountability and convenience, said Bill Wagner, national sales director, POS division, for Ingram Micro, in Santa Ana, Calif.
"Several industries, from hospitality to general merchandise, are targets for POS solutions," Wagner said. "We are seeing opportunities for VARs to increase PC-based POS sales at the low end of the retail market, where traditionally electronic cash registers have been the common solution."
Because the technology is affordable, Wagner said he sees more small and midsize retailers buying PC-based POS solutions and connecting them to back-end accounting packages, mobile data collection devices and line-busting devices.
In addition, the convenience and efficiency of mobile POS solutions also are generating much interest among small and midsize businesses, as well as restaurants and larger chain organizations. Gaining traction are things such as price-check kiosks, self-service solutions, contactless card readers and tableside credit cards, Wagner said.
Some of the best opportunities for resellers are in the restaurant space, where chains are doing line-busting with PDAs and kiosks, Julian of Custom Business Solutions said.
"Kiosks are particularly useful for restaurants as they are multifunctional and inexpensive," Julian said. "Kiosks can provide menu information, let patrons do self-ordering and allow management to share information with one another."