Historically point-of-sale (POS) systems didn’t do much more than record customers’ purchases and calculate change. Today’s systems, however, can administer loyalty programs, check inventory at other stores or in other channels, and track commission sales by employees, among other functions. “POS systems have become a Swiss Army knife,” says Brad Tracy, industry marketing director with NCR Corp., a Dayton, OH-based provider of transaction and data warehousing solutions.
Given all the functions POS systems are expected to handle, choosing one that best fits your operation is an increasingly complicated, yet critical, task. Jeff Haefner, author of the e-book The POS Software Buyers Guide, suggests finding the optimal software first, then using this to determine which hardware to purchase. “Otherwise you box yourself in,” he says, as the software with the features you need may not work with certain hardware.
That advice can help get you started, but there are still myriad POS software solutions to consider. There are guidelines, however, to help you determine which option is right for your business.
- Prioritize your needs
Unless you have an unlimited budget for your POS system, the reality is that you’ll have to make some compromises. “Most retailers won’t find something that handles Web, retail, and catalog sales for their industry and that does everything that they want,” Haefner notes.
So if most of your sales come from brick-and-mortar stores, you’ll be best served with a POS system that’s strong in retail transactions, even if it offers less than what you’d like in Web or catalog functionality — say, the ability to automatically send e-mail notifications to online shoppers when a product is on backorder. On the other hand, if most of your orders come via the Web, you need a system that can calculate shipping charges.
That said, don’t sacrifice too much from any one channel. If you offer consumers the ability to shop via multiple channels, the ability to transmit transaction and inventory information across all channels should be a top priority. “Increasingly retailers want full visibility across their organization, including the catalog, the Web, and the store,” says Laura Naylor, vice president of marketing and business development with Natick, MA-based solutions provider Datavantage/CommercialWare.
The level of connectivity should go beyond channel to channel. Your POS system should be able to easily transmit data to accounting and other information systems, says Dana Citron, vice president of marketing at Saratoga Springs, NY-based software provider CORESense. Maintaining separate systems that aren’t tightly linked together wastes time and increases the potential for errors.
And the data transmission increasingly needs to take place in real time, rather than just once a day, says Steve Klingler, vice president with Salt Lake City-based Tomax Corp., a provider of retail solutions. In order to have accurate inventory information across all channels, retailers need up-to-date inventory and pricing information.
Michael Castor, general manager of Zanesville Pottery, knows that first hand. His firm operates a store in Zanesville, OH, and also sells online. Prior to implementing a POS solution from San Diego-based EffortlessE early last year, Castor found it difficult to synchronize inventory information between his e-commerce system and the retail store.
When a Web order came in, Castor would get an e-mail from the firm hosting his company’s Website informing him of the order so that an employee could fill the order and charge the credit card. But the system lacked a way to automatically update inventory records.
The new system tracks sales both online and in the store in one place, continually providing updated inventory information. “Before, I had to watch inventory so closely to make sure we didn’t sell something that wasn’t there,” Castor says. “Now I don’t have to monitor it or pay someone else to. It does it automatically.”
- Choose between enterprise-centric and store-centric
Because of the need to continually update information across channels, multichannel merchants tend to favor centralized, or enterprise-centric, solutions. These solutions enable transaction information to cross stores and channels in real (or close to real) time, allowing for closer integration among channels and centralized management of information, such as customers’ purchasing history.
Even some single-channel merchants prefer centralized systems. Fiesta Pools & Spas is a case in point. The company operates three stores in the Tulsa, OK, area. Fiesta maintains its primary server at its flagship store; this houses the POS database, says Carmon Drummond, head of the IT department.
The main store hosts a terminal server as well. The POS stations in the other stores connect to this server and use it to transmit sales information back to the database. As a result, the company doesn’t have to purchase servers for each store, Drummond says. Fiesta uses Counterpoint from Memphis, TN-based Synchronics as its POS software.
Enterprise-centric systems reduce the amount of effort the IT department must spend updating or fixing in-store systems, experts say, as most of the software is deployed from headquarters. On the downside, they do require a robust connection between the store computers or terminals and the central office.
- Aim for hardware and operating system independence
Although not all POS software applications work with all hardware platforms, a good POS software application should work with a variety of platforms. Most retailers keep their POS hardware for five to seven years, says Colin Haig, retail executive with Walldorf, Germany-based software provider SAP. By choosing software that works with different hardware platforms, they can change software without having to also purchase new hardware.
This is key for firms that are growing by acquisition, Haig adds. Most likely, the companies acquired will be using a variety of POS software applications. Replacing their existing software with the corporate application is easier if the application can run on various hardware platforms.
Likewise, the POS application should run on multiple operating systems, such as Windows and Linux, says Juhi Jotwani, director of marketing and strategy with the retail store solutions division of Armonk, NY-based IBM.
- Look for scalability
Opting for software that works on multiple types of hardware and operating systems speaks to the need for scalability. But you also want the capacity for scalability to be part and parcel of the POS system itself. For instance, a system that uses a lightweight database in each store with a more robust database in the home office lets you leverage the stronger database, says Tom Rittman, vice president of marketing with Datavantage/CommercialWare.
You may also want your POS system to enable you to handle additional types of transactions. For instance, you may currently avoid accepting special orders because your POS system doesn’t allow for them. If a new system can handle special orders, you can then expand your ability to serve customers.
- Keep user-friendliness in mind
Given the high level of turnover among sales associates many retailers experience, finding a POS system that is easy to learn and use is key. “You’re under a gun with training,” says Erin Diebold, director of MIS and accounting with Chick’s Sporting Goods, a 13-store chain based in Covina, CA. Chick’s uses Datavantage’s Store 21 POS software; Diebold says an employee requires about a half-day of training.
User-friendliness also enables sales associates to more quickly help customers. With Fiesta Pools’ system, for example, clerks can enter keywords and call up a category of products to research. So a salesperson can enter a phrase such as “1 hp” to call up a list of all one-horsepower motors. Previously he would have had to know the exact name or number of the product.
- Demand support
Consider the features and support the vendor and application can provide should the POS system run into problems. If the system’s connection to the Internet fails, for instance, it should still be able to work offline and accept transactions, says CORESense’s Citron. Once the system is back online, the system should transmit back to headquarters data on those transactions.
Once you’ve identified several POS systems that have the capabilities you want, ask the sales representatives for access to demonstration versions of the software, Haefner says. Run through different transactions to see how the systems handle them.
Choosing an optimal POS application requires preparation, as it’s a critical component of a merchant’s business, says IBM’s Jotwani. “It’s their face to customers and employees,” she says. “It’s not just a hardware system, but a comprehensive solution.”
Minnetonka, MN-based Karen M. Kroll has written for American Way, Business Finance, and Inc., among other publications.
Once you’ve selected your POS software, you need to determine which hardware to use for your in-store stations. A couple of factors to keep in mind:
- A register or a PC?
Some vendors tout the ability of their PCs to act as POS stations in a retail environment. While these may work, merchants need to consider how quickly PC technology changes, says Brad Tracy, industry marketing director with solutions provider NCR Corp. If you’re planning to keep your POS system for six or seven years — typical for many retailers — you’ll need to obtain service and parts during that time period. That may not be possible for an obsolete PC.
- Appearances count
The POS system should enhance the overall look and atmosphere of the store. Many merchants want a sleek look to their stores; a cleanly designed POS station can contribute to this.
- Check your peripheral vision
Look at the peripherals, such as scanners and checkout screens, that work with the hardware. For example, many retailers prefer checkout screens that their customers can see, says Jaime Grant, vice president of product strategy with software provider CORESense.
Touch screens also are appealing, as they’re easy to use. And the keyboards should be able to withstand the pounding they’ll get in a retail setting, says Juhi Jotwani, director of marketing and strategy with IBM’s retail store solutions group.
Selected POS software vendors
CORESense Point of Sale is Web-based and allows merchants to view real-time product, sales, and inventory data across channels; check and order stock; and launch pricing promotions. This module is part of the company’s multichannel retail management software system.
Datavantage/CommercialWare offers several POS systems. Store21 is geared to specialty retailers with 100-400 stores. Xstore can scale from just a few stores to several hundred. TradeWind is geared to multiple-lane stores, such as department stores.
WebPOS is a Web-based solution that works on all platforms, including Windows, Macintosh, Linux, and Palm-based handhelds. Features include inventory reporting, vendor and customer management, and flexible order entry processing.
CRS RetailStore 3.0 comes with a full complement of modules, including store operations and inventory management. It features an intuitive user interface and plug-and-play peripheral functionality.
Fujitsu Transaction Solutions
Fujitsu Global Store is a full-featured, customizable POS, cash-management, and back-office application suitable for operations of all sizes. TeamPOS 3000 is a POS terminal designed to deliver long-term performance as well as advanced power management and remote management.
IBM Retail Store Solutions
The IBM SurePOS 700 Series (720, 740, and 780) features 64-bit-enabled processors that run up to 2 gigabytes of DDRII memory. The open-platform design supports a wide range of operating systems and offers easy access to the internal drives and memory.
The NCR Advanced Store software application allows retailers to integrate Websites, self-service kiosks, catalogs, and contact centers with the point-of-sale system in their stores. NCR RealPOS DynaKey is the cashier interface; it features a 15-inch color display, a touch screen, and optional integrated biometric identification capabilities, among other features.
Oracle 360 Commerce is a Java-based retail application suite that can be deployed on a range of hardware platforms and operating systems. It offers cross-channel POS and returns management, as well as browser-based inventory management, among other functions.
SAP’s Transactionware application is available in both a client/server and an enterprise model. General Merchandise, the client/server POS application, works across channels and can be modified without custom programming. Transactionware Enterprise is scalable and can be deployed across multiple operating systems and databases.
Synchronics’s CounterPoint SQL Enterprise is a graphical POS and inventory management system that also offers customer tracking and reporting, among other functions. CounterPoint SQL Express, geared to smaller retailers, offers POS, inventory management, and integrated purchasing and reporting.
The Tomax Retail.net POS solution consists of a suite of products that includes order management, special orders, returns management, and resource scheduling.
BEFORE YOU IMPLEMENT…
Just because you’ve finally decided on a POS system doesn’t mean your work is done. Now you have to implement the solution.
The implementation process typically runs from several months to a year, says Colin Haig, retail executive with software provider SAP, depending on the size and complexity of your operation. Several steps are key to a successful rollout.
One of them may appear obvious: “Test, test, test,” says Erin Diebold, director of MIS and accounting with the 13-store Chick’s Sporting Goods chain. She and her colleagues rolled out a POS system one store at a time, making sure each installation worked before going live at another location.
On the other hand, it’s not possible to test for everything. For example, not long after the POS system was up and running at all the stores, it was time for Chick’s annual August tent sale, its highest-volume days of the year. The system was set to figure the sale prices of the items at the register based on the date of the previous price reduction. It took the system about 20 seconds to check each item — too long when hundreds of people were in line. “It’s difficult to [test for] 12 registers going and 150 people in line,” Diebold says.
To remedy this, during the tent sale employees now send updates on price reductions to the system each evening. The system knows the new prices immediately, rather than having to calculate them while customers wait.
Employee training is another obvious element of implementation. Workers should know such basic information as how to change the paper, open and close the register, and accept returns. At least some employees should learn more-advanced transactions, such as accepting in-store returns of merchandise purchased online or enrolling customers in the store’s loyalty program.
You also need to consider the process an associate will use if he has problems with a register. Will the salesperson call your help desk or the POS vendor’s support line? Whatever the process, the associate must be able to correct the problem quickly or to figure out a work-around that will allow him to complete transactions while the glitch is being corrected. — KMK