Magazine Article | October 17, 2014

Win Over Retailers With A Cloud-Based POS Solution

By Jay McCall

A retail POS VAR and MSP (managed services provider) wins a $30,000 subscription-based POS and managed services install with a specialty retailer that includes recurring revenue and upsell opportunities.

A majority of Randy Roe’s 25+ years’ experience in the retail POS space has been spent running VAR companies with other business partners. One thing that never made his previous business ventures a perfect fit, however, was the fact that his other business partners were never all in agreement with his progressive ideas about bundling POS systems with managed services and offering hosted POS systems as an alternative to premise-based POS systems. In March 2011, Roe had the opportunity to start his own retail POS VAR company, Retail Technology Services (RTS) and, as the sole founder, was finally able to act upon his insights about cloud POS and managed services.

The process of finding a cloud POS vendor partner wasn’t an instant success, and Roe’s decision to venture into an area that’s uncharted by many retail VARs was tested early on. One of the first companies with which he partnered ended up being acquired by a major bank and dropping its reseller program. But Roe’s determination never wavered, and he was eventually vindicated about a year ago, following a POS win with Ben Franklin Crafts in Redmond, WA.

Customer Requirement: Find A POS That Imitates ECR Workflows
Ben Franklin Crafts is an 80-employee craft retailer with 10 POS lanes. “This customer was very picky about making any changes to its legacy ECR [electronic cash register] system,” he says. “We presented them with several options to choose from, but we just weren’t able to find a POS solution that would allow them to follow the exact workflow they were used to with their ECRs.”

The specialty retailer’s driving concern was the fact that it averaged more than 1,000 transactions a day, and installing a system that changed its cashiers’ routines would add keystrokes to the checkout process, thereby causing longer checkout times, lost productivity, and an increase in transaction errors. “Even if a POS solution required only one additional step such as pushing one more button, it was rejected,” says Roe. “For example, one POS system we recommended to them required the cashier to select a category first, then enter a price, then press another key to finish the sale. They insisted on being able to enter the price first, then select the merchandise category, and that put an end to considering another POS we had recommended,” he says. “They also did not want to be pushed into a POS system that would force them to upgrade to a SKU (stock keeping unit)-based inventory management, which they were not ready to consider after hearing horror stories of other specialty retailers going out of business after taking on the daunting task of converting 50,000+ items to SKUs.”

Last year, Roe got his big break after his Merchant Warehouse payment processing rep referred him to COMBASE USA, a new subsidiary of German-based POS vendor COMBASE AG. “With COMBASE’s 19+ years of experience with point of sale, their understanding of point of sale and service was readily apparent,” recalls Roe. “Their POS application, called KORONA.pos Cloud, allowed merchants to ring sales using the same key sequences they had been using for more than 30 years — price, category, then total. The application loaded up in minutes, and we and the customer breathed a sigh of relief.”

During the final stages of the sales process, Roe and his client discovered one feature the client wanted that the KORONA.pos Cloud system didn’t seem to have. “One call to the company and the problem was resolved within a couple of minutes,” says Roe. “It was a feature already built into the POS system that we just needed to activate from their cloud interface. The update was a common ECR feature of automatically assuming two decimal places without requiring cashiers to type the decimal as part of the entry — another must-have for the client.”

Fulfill Your Customers’ POS Needs And Meet Their Budget Requirements
Each checkout lane includes an Aures Sango POS terminal with an Intel i3 processor, not commonly available yet on dedicated point of sale workstations. “We also added Epson TM88-V receipt printers with cash drawers from M-S Cash Drawer and a PowerVAR uninterruptable power manager and conditioner to protect our new equipment from power abnormalities and outages,” says Roe. “We were able to keep their per station cost at around $3,000.”

One other nice feature with the KORONA.pos Cloud system is that even if the system loses connectivity to the Internet, POS transactions can continue without interruption. “This is the Achilles heel for most cloudbased POS systems,” he says. “With this system, however, the transaction occurs at the terminal, and if the cloud becomes unavailable, it simply waits to sync its sales until it is available again.”

A traditional client/server-based POS system would have cost around $100,000 after calculating the cost of the on-site server and all of the up-front software licensing costs. “With the cloud POS system, the software and much of the hardware are hosted in COMBASE USA’s cloud, which enables us to keep the customer’s up-front costs under $30,000,” he says. “There is much less labor required, too, since no servers or database engines need to be set up and supported, plus the ease of use reduces training costs.”

Customers have several subscription options to choose from to pay for the solution, including monthby- month, once every six months ($120 savings), yearly ($480 savings), or once every two years ($1,200 savings). “The cost per lane for the solution is between $39 and $59, depending on which subscription model the customer selects,” says Roe.

Using N-able’s N-central RMM (remote monitoring and management) platform, Roe bundles remote monitoring and management services with the POS system at a cost of $5 per month per workstation. The monthly fee covers customer alerting and helpdesk support. “We bill hourly for any on-site support required or remote support after 15 minutes per incident,” says Roe.

Since implementing the KORONA.pos Cloud solution, RTS’ customer has been very pleased with the new system, and it’s already leading to additional opportunities for the VAR. “This retailer is one of the largest craft stores in the United States and is looked up to across the country by its peer stores, which comprise hundreds of locations,” he says. Roe says that he’s already in discussions with other specialty retailers as a result of this project.

One additional upsell RTS is currently discussing with Ben Franklin Crafts is upgrading to SKU-based inventory management instead of hand-counting inventory and using spreadsheets to keep track of updates. Additional upgrades the VAR is talking to its customer about include adding a social media module called Friendsbonus and a loyalty program called bLoyal. “COMBASE USA solves all the major hurdles associated with traditional POS systems, including making upgrades like the ones we’re proposing uneventful,” he says. “The craft store is spending less than $400 a month for the software, and it now has the flexibility to add a register for a month during its busy season without having to commit to buying and maintaining equipment on-site for the whole year. That’s a feature that surpasses even the pickiest of customers’ demands.”