Whether a simple cash register or a fully-integrated sales and inventory system, point of sale technology has played a crucial role in the development of the SME sector. The latest innovations – as led by pioneering solutions providers such as
Choosing – and using – the right Point of Sale (POS) technology is one of the most important strategic decisions an SME can make. Nor is this the case just for retailers: for any business engaging with customers, it pays to think seriously about the ways that your POS capability leverages strong, effective contact. POS systems are critical for aspects such as -
• Reducing your operating costs
• Maximising the volume of transactions
• Giving customers the full bandwidth of payment options
• Ensuring that your business has the flexibility to engage with the customer as and when the customer wants
• Ensuring accurate stock control and inventory management
• Giving you a full choice of customer-facing locations – from standard office or store to hi-tech kiosk or 'hole in the wall', all with maximum sales potential
POS systems have been through three key stages of evolution – and arguably, the most important one is happening right here, right now. As
Back to the future
Like many of the ways that technology has made inroads into our lives, the development of POS capability has been fast and furious – and transformed the problems and shortcomings we used to take for granted. Consider this: for more than 40 years, virtually every SME looking to make cash and credit card transactions used a 'two-tier' system. Credit card purchases would be made by swiping a card imprint machine, physically recording the card number via an embossed strip, with the purchase value written in by hand. The transaction would then be entered into the cash till separately – coded as 'card, not cash' – because there was no integration of any kind between the two systems.
It wasn’t until the mid-1980s that the card imprint machine was replaced by an online card swipe unit, often referred to as a 'PDQ' machine. This would be connected to the central system of a merchant provider, and accepted a range of card payment options, but again, there had to be manual reconciliation between the records it provided and those made at the cash register. It goes without saying that neither the cash register or the PDQ machine had any record whatsoever of inventory usage and re-order, and still less about purchase trends or delivery timings. They were both simply ways of making a 'there and then' purchase – which would have to be relayed manually to the back office systems in order for the finance team to make any sense of what was selling and what wasn’t.
Today, all this has changed: the modern POS system aims to combine all the various stock management and inventory functions with point of sale convenience. There's no longer any need for separate reconciliation between cash register and card swipe machines – it's handed by a central computer, which produces a single read-out tagged for card or cash.
The system will also include a range of advanced features to cater to different functionality, such as CRM, financials, warehousing, etc., all built into the POS software. One of the key advantages of this approach is that, in avoiding the need for re-keying of data in the back office, it thereby eliminates the risk of entry errors.
What's more, the cash register of yesterday has become a POS monitor, using touch-screen technology for ease of use, with a computer built into the monitor chassis to create an all-in-one unit. One of the great advantages of this is that all-in-one POS units liberate counter space for the retailer. Nor does it end there: that same technology can now be used across a range of devices, including tablet and smart phone.
In terms of the system software, today's POS system can typically handle a vast spectrum of customer-based functions such as sales, returns, exchanges, gift cards, customer loyalty programmes, promotions and discounts. The POS software can also allow for functions such as pre-planned promotional sales, manufacturer coupon validation, foreign currency handling and multiple payment types. The more sophisticated variants can happily process financial reporting schedules, sales trends and cost/price/profit analysis. Customer information may be stored for receivables management, marketing purposes and specific buying analysis. Plus, many retail POS systems include an accounting interface that 'feeds' sales and cost of goods information to independent accounting applications.
The quest for mobility: Cloud-based POS
One of the constraints of all the hi-tech solutions discussed above is the relative lack of mobility. Although the ability to process transactions and make sense of them in profit and loss terms is now extremely good, there is still the constraint of where the customer purchases can actually take place. Enter Cloud computing. This opens the possibility of POS systems being deployed on the 'Software as a Service' model, where the entire system can be accessed directly from the Internet, using any internet browser. So, Cloud-based POS systems are independent from platform and operating system limitations – but they use the previous advances in the communication protocols for POS's control of hardware.
Cloud-based POS systems are also created to be compatible with a wide range of POS hardware and even iconic tablets like the iPad. Cloud-based POS is thereby helping to push POS systems to mobile devices. It's also worth bearing in mind that Cloud-based POS systems are different from traditional POS largely because user data, including sales and inventory, are not stored locally, but in a remote server. The POS system is also not run locally, so there's no installation required. Other key advantages of a cloud-based POS are instant centralization of data (important especially to a branch network), ability to access data from anywhere there is an internet connection, and lower start-up costs.
The next step – POS through mobile app and mini card reader
"Just imagine', says
"This really is a great innovation for businesses whose representatives are always 'on the move'. Let's say you're a pizza delivery specialist, and your customer doesn’t have cash. Now you’ve got an instant and totally portable solution for taking cards. Or perhaps you’ve traditionally been a cash-focused business and want the right platform to expand to cards – well, this is a wonderful way to start.
"Typically, the merchant pays nothing upfront, and gets a minimal charge every month. But of course, the greatest advantage of all is that you don't need separate and costly POS software. Take a moment to think how far we’ve come: all the traditional POS elements, like the monitor linked to a big computer and all the back office admin facility, is reduced to a mini card reader and a mobile phone. That's real mobility at an affordable price."
Govind adds: "Technology of this kind is big news for SMEs, because for the relatively young, smaller business, it gives you a way of controlling costs and maximising transactions and customer appeal. While for the growing, enterprise level operation, it allows a very simple roll-out without heavy investment in additional POS hardware and set-up."
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