Magazine Article | March 19, 2012

POS Software: Beyond The Cash Register

By Pedro Pereira, contributing editor, Business Solutions magazine.

Integration opportunities with mobility, social media, and surveillance create significant VAR opportunities.

Integration of point of sale (POS) software with increasingly popular technologies such as social media, mobile devices, and video surveillance are opening a world of opportunities to POS integrators and resellers. Once strictly identified with the cash register, POS has become a much more comprehensive technology that links marketing, customer loyalty, and mobility to the actual sale.

A growing array of add-on possibilities, including integrated credit card processing, mobile device integration, and digital signage, is significantly increasing the revenue potential of POS VARs by introducing technology that makes their clients more flexible and responsive to their own customers’ needs and preferences.

“Video surveillance, loyalty, referral processing, gift card processing, and mobile tools are becoming as standard as the cash drawer,” says Robert Crichlow III, executive VP at Crichlow Data Sciences, maker of The General Store software. “A VAR’s POS solution should be able to include them all, and when it comes to mobile and surveillance, VARs can increase their initial sales by 50% to 100%.”

Video surveillance is especially suited to VARs selling into markets such as liquor stores, says Will Atkinson, CEO of POS solutions vendor CAP Software. “VARs can add significant revenue to each sale with a surveillance system, while providing the customer with a powerful analytical and reporting tool.”

The integration of payment processing with POS is another significant opportunity, says Dana Bargell, director of marketing at Specialized Business Solutions, maker of Keystroke POS software. Replacing stand-alone terminals for credit and debit cards with an integrated solution, he says, is an easy upsell for VARs who make a case for the speed and convenience of the all-in-one approach.

“Most retail merchants still use old-school standalone credit card processing terminals, which do not communicate with the POS system at all,” Bargell says. “This is terribly inefficient at the POS because sales clerks must enter sales in the POS system or ECR (electronic cash register), and then take payment using the separate credit card terminal.”

VARs can even generate recurring revenue through integrated systems through arrangements with payment processing vendors, Bargell says.

Mobility: Proceed With Caution
It’s almost impossible these days to discuss technology without addressing mobility, and such is the case with POS software. With tablets and smartphones gaining traction in consumer and business applications, merchants are turning to VARs for guidance in using the technology for applications such as payment processing and product browsing.

Mobility, however, poses some challenges for VARs, who have to manage expectations from their clients to match the features that are actually available for use through mobile devices. “Mobility is going to be huge, but VARs need to look at each retail situation separately and work out the true use-case scenario before recommending or implementing a mobile solution,” says Atkinson. “Which form factor is appropriate? What is the existing infrastructure? What sort of IT staff does the retailer have?”

Then there is the cost of using consumer-focused tablets and smartphones for retail applications for which they were not designed. That, says Crichlow, is something VARs have to explain to clients. “In the commoditized world of the Internet, this can often create one hurdle for the reseller when negotiating price,” says Crichlow.

As for Apple’s iPad specifically, POS software vendors caution against getting caught up in consumers’ excitement for the device. Though less expensive than rugged devices designed for retail environments, iPads lack rugged casings, which could lead to frequent replacements. In addition, the devices lack compatibility with standard retailfocused peripherals, says David Gosman, CEO of POS software maker PC America.

Still, Crichlow sees a way around some issues: “Many manufacturers are adding retail sleeves and other attachments to make them more sturdy and applicable to retail.” This addresses durability, but not what Atkinson sees as a real potential problem — theft. “Petty thieves don’t want a warehouse bar code scanner, but they do want iPads.”

Despite the challenges mobility poses, it may end up marginalizing another POS-related category, self-service kiosks. Reliable retail-related applications for tablets and smartphones could minimize, if not eliminate, the need for kiosks. “Applications are rapidly emerging that allow customers to scan items, order food, and perform a variety of transactions on their own devices,” says Gosman.

Kiosks are expensive and unless VARs can find a niche to sell them as complementary to their clients’ businesses, their future is uncertain. “A wine selection kiosk is a natural fit for a liquor store, and needs to integrate to the POS, so a VAR can easily transition into this type of product,” says Atkinson. “But kiosks can add considerably to the cost of a system and they can require more support and repair than a standard terminal.”

Social Media Integration
Like mobility, social media is drawing attention from merchants wanting to leverage it. POS solutions are starting to integrate with social media, allowing merchants to monitor customer activities and reward them for interaction with their businesses. Rewards could be in the form of discounts, a free cup of coffee or, says Gosman, a rewards system by which customers earn points for sharing on social sites their experience with a merchant.

“Rewarding customers for social interaction with a business is becoming widely accepted,” Gosman says. “Most merchants view social media as much in the technology arena as it is in the marketing arena and are turning to their technology VARs for assistance in adopting these new loyalty solutions.”

Social media is a cost-effective marketing tool that VARs need to learn how to leverage, says Crichlow. “We have a merchant in the tobacco industry that tells us over 30% of his new business comes from a referral application we added to our POS software. These kinds of statistics are invaluable to POS VARs looking to differentiate themselves from the rest of the herd,” he says.

Digital Signage Opportunities
Digital signage presents another opportunity for POS VARs to differentiate themselves. The technology is easy to integrate with POS, says Atkinson, but the issue is content creation. He and Gosman recommend teaming up with a third-party content provider, such as a marketing agency.

“Digital signage is the gift that keeps on giving and continues to evolve with new features and opportunities,” says Gosman. “What was at first a cycling of static pictures has turned into dynamic, easily changeable content that is increasingly interactive with the user. One huge upside of dynamic technology is the ability to repeatedly return to the customer with new features and services.”

Repeat business of course is always a goal for VARs with an eye on the future, so opportunities to integrate digital signage, social media, mobility, and video surveillance create significant potential to grow their business.