POS Systems: What's in Store for SMBs?

Lean times for the retail industry are spurring fat opportunities for some channel pros, as retailers seek out efficiencies that come with automation at the point of sale.

By Carolyn Heinze

With increased pressure to drum up sales and comply with the PCI DSS security standards, retailers are reexamining their point-of-sale (POS) systems. While at one time sophisticated functions related to customer relationship management (CRM) and inventory tracking were reserved for the largest players on the block, these automated capabilities and others have become increasingly available to small and midsize businesses, with the potential for much sought-after cost savings.

"There has been a larger investment by the classic cash register customers and independent retailers to move into the PC-based market," observes Marc Rachiele, director of marketing and vendor management in the data capture/POS division of Santa Clara, Calif.-based distributor Ingram Micro. "They recognize the value of using a POS computer that can handle not only their day-to-day transactions, but also inventory, time management, and even payroll." This cuts down on hours spent reporting and balancing, which translates into dollar savings. 

EXPANDED FUNCTIONALITY
Greg Buzek, president of technology research and advisory firm IHL Group of Franklin, Tenn., notes that one of the drivers behind this development is the extension of accounting packages by companies such as Intuit and Microsoft, which now factor in a POS interface that includes software, a PC cash drawer, printer, and scanner. "It allows the smaller retailers to have the same types of functionality that the larger retailers have in one complete package," he says.

This enables even modest retail organizations to do much more than simply ring up transactions. "Now you are able to collect and mine information to determine key purchase habits, and as a result, you are able to better target those customers in the future," Buzek says. Internally, today's POS systems offer automated inventory tracking and more integrated functionality that streamlines processes related to human resources and marketing.

At the retail chain level, POS has moved from the actual cash register and deeper into the store, in the form of Web-based kiosks and self-checkout stations, notes Sahir Anand, research director for retail and hospitality in the CPG practice at analyst firm Aberdeen Group. Mobile POS, he says, is also starting to take off. "That takes the customer experience to the next level," says Anand. "They can have a mobile handheld where they can scan items, but also take that to the regular POS register and experience a quick checkout."

WHOLE COMPANY APPROACH
Because these systems generally remain in place for a significant amount of time, it's important to recognize that deployment has an impact on more than the organization's IT infrastructure. "You are not just selling a box; you are selling a solution," Buzek underlines. "At the retailer, there is someone in marketing who has an interest in it, someone in human resources who has an interest in it, and there are people in merchandising and in the supply chain that have an interest in it." The planning phase, therefore, should include those associated with all of these different facets of the business, and not simply the individual charged with IT.

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