The Cash Register’s Days are Numbered

As consumers, we’ve been spoiled for many years now. We want the latest and greatest technology that will make our lives easier, and we want it now. We’ve become accustomed to getting what we want, as quickly as possible – whether it be the latest version of the iPhone as soon as it’s released, or a Smart TV that can deliver content from multiple sources.

Consumers are now demanding the same type of high-end technology from retailers when it comes to the point-of-sale (POS). According to a recent study commissioned by my company, I Love Velvet, and conducted by third-party research firm OnePoll, more than half of Americans believe the cash register is “outdated” and would be “gone soon.” The rise of mobile point-of-sale (MPOS) solutions is the largest factor in the demise of the cash register, with savvy consumers calling the shots. In today’s world where you can make a purchase online at the speed of a click, consumers want their in-store experience so be just as fast and seamless. Thus the rise of MPOS solutions.

All is not lost for the traditional POS system, however. It’s a known fact that while MPOS use has risen dramatically over the past few years, many of today’s businesses still heavily rely on legacy POS systems. However, we are starting to see organizations integrate MPOS in addition to their existing systems, complementing existing technology.

Where are consumers adapting to emerging MPOS technologies?
Consumers feel most comfortable using MPOS technologies in retail settings (26%), paving the way for large retailers to begin offering these in-store solutions. The food/beverage industry came in second, with 14 percent of consumers feeling most comfortable using MPOS, followed by airlines/car rental companies (10%).

But beyond the high-tech feel of MPOS, there is a real business benefit here. For example, our report found that if consumers could check out quickly, from anywhere on the store floor (a major benefit of MPOS), they would not only shop at the store more often, but that they would also tell a friend or share their experience on social media. Additionally, 56 percent of consumers would appreciate that the store made their experience more convenient. This is a huge bonus for companies looking to drive real differences in both branding efforts and sales.

Lack of trust comes with level of security
On the other hand, MPOS adoption doesn’t come without challenges. We’ve heard loud and clear for years that MPOS has been plagued by security concerns, with 57 percent of consumers stating that it’s their top concern. Furthermore, 62 percent of consumers said it would affect their decision to use services like Square or LevelUp if they did not provide the same levels of security as the traditional cash register.

Nonetheless, the payments industry is moving in unison with the evolution of technology, which in turn, presents another challenge to keep up with the security requirements and standards of mobile payments. Considering the hacks and security breaches in the past year on traditional POS systems and financial organizations, retailers need to pay attention, now more than ever, of the threats these new solutions could have if not correctly addressed. As such, true enterprise-grade solutions need to be both PCI-PTS and PCI-PDS certified.

The Learning Curve
While MPOS solutions are gaining traction across the board, consumers still feel uneducated about how they work.Even though 1 in 5 consumers polled had allowed a retailer to check them out using a MPOS solution, just as many still avoid using MPOS. The overall understanding of MPOS technology remains a barrier for consumers, with 1 in 10 consumers saying they would be more likely to use MPOS solutions if they had more information about them.

This presents a key opportunity for retailers to proactively educate their customers on MPOS. Customers will feel not only more comfortable in using MPOS, but will continue to support these retailers with their business. Providing customers with a wealth of information via dedicated emails, on the retailer’s website as well as at check-out will help raise consumer confidence – ultimately helping retailers more efficiently and cost effectively check out customers.

Looking Ahead
The results of our survey were loud and clear: consumers are done with the traditional cash register. They not only want to use MPOS, they expect to use MPOS. With the implicit benefits of cutting down lines, improving CRM efforts and increasing use of retail floor space, it will be interesting to see which organizations adapt with the times and meet consumer demand for MPOS – and which organizations are left behind.

The Process of Computerizing Your Business

All too often, business owners seek computerization as though it were something that could be acquired “off the shelf” from a local store, as though it were something that could be chosen, financed, and installed upon demand. In reality, computerization is an objective, a pursuit, an evolving process. It is best accomplished in stages: evaluation, discussion, selection, and implementation.

Computerization must be a gradual process, with one area running well before you can move on to the next. Over time, as you see what a computer can do, you begin to see many possibilities for your business. As each area is automated, your understanding of your computing needs will increase. For a retail or service operation the logical place to start is with invoicing. But before even starting with a computer system, we must gain the support of the people who will be using it for 8 hours a day, five days a week – the staff!

The entire computerization process is much easier if all of the individuals who will have to use the system are supporting the decision to implement it. Before you even begin shopping for a computer system I encourage you discuss it at length with the staff. You may be amazed to find out that even the most competent employee can be afraid of computers or be reluctant to use it. Some employees may be secretly afraid that the computer will replace them – or even expose things that they would prefer to keep hidden.  Allow at least three to six months for review and discussion (debate?) about the computer system. Bring the staff into the selection process by asking them to critique demo programs or sit in on presentations by vendors.

What a computer cannot do:

Computers cannot turn a poorly run, disorganized business into a thriving one – if your business is in a state of disarray, matters will become even more confused after computerizing.

Computers do not necessarily reduce your workload immediately – What usually happens is that you invest a considerable amount of time up front -entering inventory or service descriptions – for example. This may take weeks or months. Eventually, the data is in the system and other parts of your business begin to benefit.

Computers do not run the business all by themselves. Computer systems are tools to be used. The effective use of the data collected still requires interpretation by a human being.

What a computer CAN do:With the use of point-of-sale or business automation software to replace the cash register, the computer can simultaneously: print a complete invoice instantly, automatically reduce the stored inventory data, update a customer’s sales history, update a salesperson’s records, record a receivable, alert you if your inventory level is too low and many other things. Let us examine each of these in detail.

Replacing the cash register – with the use of a point-of-sale system (so called, because it is used at “the point of sale” ) the computer will print out a clean legible invoice showing what was purchased, how it was paid for, what the sales tax was, and even include an advertising message or coupon on the receipt if desired. The computer has intelligence that a cash register does not have. Say, for example, that you are using a system that keeps track of customer sales. You might have some special frequent customers that get a discount, like a hardware store does with building contractors. Wouldn’t it be great to know that the discounts are correctly applied, and not rely on a salesperson to have calculated that? Most point-of-sale systems are capable of doing that.

Tracking the Inventory – When you start using the system, you will enter all of your inventory levels in and the computer will automatically reduce the level each time an item is sold. For businesses with hundreds or thousands of items or SKUs (stock keeping units) this is a boon. Many systems can produce a “Reorder Report” on demand. Such a report will tell you which items need to be reordered.

Calculating reorders – Depending upon the industry, the proper computer software can suggest the correct amount of merchandise to reorder. Some computers systems track seasonality and can automatically adjust recommended purchase levels based on that.

Tracking sales by Customer – A point-of-sale system can track which customers purchase the most, and even which customers are the most profitable – two important details which are not the same. A Sales report showing Year to Date (YTD) purchases, or YTD profits are helpful to a business owner. Similarly, a report showing which customers have stopped making purchases, say a reduction of more than 30% from one quarter to the next, can signal a sharp business manager that something may have happened. Did the customer have a bad shopping experience? A good manager can pick up the phone and find out and perhaps get that customer back. A feature like this is especially good for keeping abreast of problems with customers who buy over the Internet, or for distributors who may be shipping goods to clients across the country or the world.

Updating a salesperson’s records – keeping track of how much each salesperson sells is an important management tool. Knowing just how much sales and profit each person generates is very useful data. Business owners I have helped are often surprised that the quiet salespeople frequently outsell the very verbal ones.

In summary, the properly selected and installed computer system will save time, money and help you make better operational decisions. It is WELL WORTH the effort and cost. Just allow plenty of time to select and carefully implement this technology.

Why Foursquare Is Part of the Point of Sale Industry

I’ve been running the Foursquare app on my smartphone for a few years – I use it occasionally.  Some months maybe 20 or 30 times, other months not at all.   I’ve earned badges, over two dozen Mayorships (all of which I have subsequently lost),  and had some fun along the way.  I’ve endorsed dozens of businesses and trashed a few others.  The program is mildly empowering for shoppers/consumers – and therein is the fun and the danger for retail businesses.

When I visit a location – like a coffee shop, an airport, a restaurant – I may  (if I think about it, which is less than 10% of the time) “check in” by opening the app, finding the retail location I am in, and clicking on the “Check In” button.

Foursquare has a database of almost every shop or business.   Even lots of airline terminals and gates are designated as Foursquare places, which can be lots of fun to check in at, since you get extra points for having traveled lots of miles.   Users can enter new locations; like their house, a new restaurant, or even their TV room.   When checking in, you are awarded points  – points are based on many things including how many people are checked in at the same place, whether the “Mayor” is in the house, whether you are the mayor of this place, how many other similar places you’ve been at and many other factors.   The Mayor is just a FourSquare user who is the most active recent visitor to that location. Mayorships change regularly.  I’ve checked in over 680 times in the last few years.

Your points go on a scoreboard and you can see how you are doing that week as compared to your friends who you choose to connect to on Foursquare.

The program offers very little in the way of pecuniary rewards- only alerting me to the potential for an oddball special deal on a rare occasion, but it does create psychological rewards, and for that reason alone it deserves respect and a close look.

The Psychological Rewards

Foursquare offers a level of connection. I have friends who I am connected to on the app,  and if they choose, they share where they are and what they are doing.  I find it fun, to see where some of my friends are eating, where they are traveling.  I don’t necessarily talk to all these friends often – some are in a social circle of one kind or another, but I enjoy hearing about what they’re up to.   Call it socialization, sharing, being connected – Foursquare offers all that.

There is also a level of stimulus and surprise that I get from the game.   Years ago, in a certain scientific experiment, users were rewarded at random for certain acts.  They did not know when they would get rewarded, but sometimes at random, they did and they liked it and it was part of the motivation to continue the experiment.  Foursquare intelligently includes that in the form of “badges”.  Last week I “checked in”   at a pizzeria and immediately received a “badge” for being at my fifth different pizzeria.  The badge means nothing to anyone, except perhaps as bragging rights.   I enjoyed getting it. It is a form of recognition I suppose.  Almost a throwback to my Boy Scout days.

Another psychological reward that can be earned in this “game” – is becoming Mayor of a place – like a Starbucks, school, recreation spot, that you frequent.  The formula for becoming a mayor is not disclosed, but it has to do with frequency over a period – like maybe 30 to 60 days.  I have become the mayor of a business in just a few weeks with as little as 5 check-ins, but my favorite Starbucks took over 60 check-ins and two months of diligently remembering to check-in each time to only briefly  hold the title for a week or two before I was ousted.

I don’t use the game to meet people.  If you check-in to a location and others have recently checked in, you can see them listed.  That part may be more fun for extroverts – and I can’t count myself in that group. You can also rate restaurants or any venue, and leave a tip (advice) for others.  I occasionally use the app to choose between restaurants.  (I use Yelp more though – but it’s not as much fun.)

I do use Foursquare to “ding” a restaurant or establishment for really lousy service.   I have done this three or four times. It gives me a chance to vent, tastefully though.

Downsides of this game

There are a few negatives – people you are connected to know where you are, what you eat, what you do.  It’s a little more personal then Facebook in some ways. So, just be sure that the people you are friends with are the type of people who can be trusted with this information.

Retailers and vendors should check their Foursquare comments at least once a week, to stay alert to customer feedback.

Everyone should try this free app – some of you will get hooked.

Turn Facebook into a Point of Sale

Wow Bao, a Chicago-based Lettuce Entertain You Enterprise, Inc. restaurant concept specializing in steamed Asian buns, announced the launch of a new “Online Ordering” tab on its Facebook page that allows fans to order their takeout or delivery meal right from the social media site. The application was developed by Exit41, a leading provider of web, mobile and call center ordering applications and services for the restaurant industry.

“With the addition of our Online Ordering tab on Facebook, we’ve just made it even easier for our most loyal fans to order our food,” said Geoff Alexander, vice president and managing partner, Wow Bao. “This is a tremendous opportunity for us to really engage with and reward our fans, plus attract new fans with the powerful, viral nature of Facebook.”

On Wow Bao’s Online Ordering tab, fans can browse a variety of the restaurants’ most popular menu items (everything from BBQ Pork Bao to Homemade Fresh Ginger Ginger Ale), easily add selected items to their cart, and then seamlessly complete the transaction on the Wow Bao online ordering site. The application features real-time integration with the restaurant point of sale system for up-to-date pricing, taxes and menu item availability.

Exit41 will be launching Facebook ordering for its restaurant customers, which include some of the world’s leading fast casual, casual dining and fine dining brands.

Exit41 also has aggressive near-term plans to enhance the application with features including the ability for fans to share their favorite menu items with their friends, “Like” them, and find “Top-Liked” products across their network, and the ability for restaurants to instantly reward fans based on their order frequency.

“Adding online ordering to their Facebook page opens up a huge opportunity for restaurants to gain exposure to the millions of Facebook users,” said Joseph Gagnon, chief executive officer, Exit41. “Think of it — there is nothing more social than food and with this enhancement we have now fully integrated the restaurant into the social graph.”

How the Point of Sale (POS) Industry Works

If you are researching point of sale (POS) solutions for your business, or just want to understand more about the POS industry, here is a brief summary of how the point of sale industry works.

Point of sale solutions are about as diverse as the businesses they serve.  This stands to reason, since businesses vary in size, scope, location, products, services, management styles, customer base, and many other factors.  Point of sale systems include a synthesis of both hardware and software, and coming up with the right blend for a particular business model is no simple matter.  Those in the POS industry know this, and so there is naturally an attempt to create avenues for helping businesses make good decisions and find the support they need.  It is helpful to know how this works.

Generally, the POS industry follows a supply chain model as follows.

POS_industry_supply_chain

POS Hardware Manufacturers and Software Developers

Point of sale manufactures create hardware, such as all-in-one POS terminals, bar code scanners, keyboards, cash drawers, pole displays, and receipt printers.  Frequently manufacturers will specialize on certain POS hardware items, such as APG Cash Drawer and MMF POS for cash drawers, or Epson for receipt printers.

POS software developers focus on creating software that provides POS functionality such as sales transactions, inventory control, reporting capabilities, managing customer data, and much more.  It is common for developers to customize their POS software for various industries, such as retail, grocery, liquor stores, salons, and others, since these business types can have very different needs.  Some software developers choose to work directly with businesses to create cost-effective and customized solutions, doing without the distributor/VAR chain.  Some developers focus on providing online POS solutions based on cloud technology, so that the point of sale software can be used more independently of hardware restrictions, and accessed from a POS station, computer, laptop, or smartphone.

POS Distributors

POS distributors act as liaisons between manufacturers and VARs.  Large distributors such as BlueStar and ScanSource are poised to find and work with the best manufacturers of POS hardware from across the globe, many of whom offer innovative and cost-effective technology but are not set up to work directly with VARs or businesses efficiently.  By working with manufacturers, the distributors help to reduce costs, and improve products with product testing and product support.

POS distributors also are able to integrate POS hardware with various POS software options, allowing VARs to offer reasonable options for businesses of all levels.  Distributors will often include terminal setup so that VARs can offer plug and play installation for their clients, saving both the reseller and the business the headaches of installation.

The distributor’s relationships with POS software developers provide the benefit of customer leads for POS VARs.  Other benefits that distributors offer to resellers include training for products, technology and business, sales support and advertising assistance, and trade shows for education, exposure, and networking.  They can also provide technical support, such as testing software compatibility with POS terminals, as well access to an extensive inventory.

Distributors also provide a credit facility, when VARs require it, to allow sales involving large amounts of equipment to be easily transacted.

POS Value-Added Resellers (VARs)

POS VARs work directly with business owners to find the right blend of hardware and software for their business, adding value to the products with their expertise and ongoing support.  VARs may work independently or with a POS Distributor for added support and expertise.   VARs will handle installations, coordinating or supervising cable and electrical installations.  They will also provide on-site training for the staff.   Many VARs bring decades of POS experience with equipment of all shapes and sizes to bear for the benefit of the store owner.

POS End-Users

The end-users of POS systems are businesses large and small in retail, service and other industries.   Businesses using point of sale solutions range from small single-store outfits to online companies, to national or international corporations.  Point of sale solutions can hold tremendous benefits for apparel or hospitality applications, automotive shops, drug stores, restaurants, grocery stores, e-commerce sites, single store or multi-store operations, and more.  A properly suited POS system can save time and money, greatly increase efficiency and improve customer service and satisfaction.

The effective installation of a point of sale system involves a ten billion dollar plus industry with numerous players adding value at every stage.  End-users of a POS system, and certainly their customers, may not see or appreciate the tens of thousands of people involved, but they are there, in the background, helping to make it happen.  The local reseller may be a two person, or fifty two person operation, but they are ultimately backed by companies from modestly sized software developers to multi-billion dollar distributors and layers of expert industry personnel, all working to insure a smooth and seamless POS installation.