From Ancient Cash Registers to Modern Point of Sale Marvels

VARs Discuss Today’s Hot Issues in Point-of-Sale Technology

Verticle Systems Reseller Magazine

by Abigail A. Lorden

Posted August 03, 2005

Cash registers have come a long way since patented in 1879 by shop-owner James Ritty. The first working, mechanical register was nicknamed the Incorruptible Cashier — in all likelihood a slap at employees whom Ritty suspected were pilfering.

When a sale was registered on Ritty’s machine, the amount appeared on a large dial on its front. The sale was also recorded within the cash register as a series of holes punched on a roll of paper. At the end of the day, a merchant totaled his sales by adding up the rows of punched holes. Today’s service providers would be hard-pressed to sell the Incorruptible Cashier as anything more than a conversation piece, as the point-of-sale (POS) industry gets more entrenched in technological trends with each passing year. VSR asked several POS solution providers to discuss those trends and the new technologies that are making the most waves in retail space. Here’s what we found out:

What were the major trends in POS over the past 12-18 months?

Nicholson: Speed of transaction continues to be an area of focus in today’s time-crunched world. Many retailers are adopting new technologies to speed customers through the checkout process. In conjunction with transaction speed, sophistication of payment processing is increasing in the small and mid-market retail sector.

Gusse: There’s been more movement from traditional POS hardware to PC-based POS hardware, as well as significantly more interest is self-checkout. Also popular are open systems architectures, both hardware and software (software that will run on all hardware; hardware that will run all software) and mobile infrastructure and devices.

Carney: We have seen the reduction in POS hardware costs along with easier to use POS software, making it easy for EVT Solutions and our reseller partners to sell the value of POS.

What are the major trends or changes in POS for the coming 12-18 months?

Nicholson: Hardware solutions are becoming an area of focus for major distributors and OEM’s. This competition will most likely drive down end-user pricing on products that have had high margins for many years. We have probably only seen the beginning of this process. Major software companies continue to focus on development of applications for the small and mid-market, while consolidation and acquisition seem to be the theme for large players.

Gusse: We expect to see more applications that will utilize data to different hardware providers; additional peripherals such smart readers, biometrics, etc.; and hardware and software replacement in tier-one accounts.

Carney: Enhancements in POS software, along with wireless technology and the reduced cost of specialized POS hardware, such as interactive kiosks, will enable Retailers to provide much better customer service and selling than ever before without increasing staff. This is a great time to be in the POS/retail reseller business.

VSR readers recently named POS hardware and software among the hottest technologies for the coming 12-18 months. Does this coincide with what your business is expecting?

Nicholson: POSitive Technology’s core competency has been providing these solutions. Our growth and expansion reflect the strength of the POS marketplace. We added four new locations last quarter and anticipate three to four more in 2005. Demand for reliable retail and hospitality technology that provides accurate data is at an all-time high.

Gusse: Yes, we believe there is a significant window of opportunity over the next two years. We are developing software applications and service products that allow us the opportunity to take advantage of that market growth.

Carney: Yes, definitely. With the enhanced performance of POS hardware, software can now do more than ever before. Retailers are willing to invest in this new technology, if you can show a link to increased customer service and sales. This has to be done without increasing complexity of managing the system and without increasing staff.

EVT Solutions invests in the development of software products that help small- and mid-sized retailers easily and affordably connect with their customers without increasing staff.

Are you seeing much activity in self-service/kiosk POS?

Nicholson: Our most aggressive technology customers are starting to explore these options. Most of the activity is exploratory in nature, as apposed to a hard requirement for the retail operation.

Gusse: Yes, several of our customers are purchasing kiosks for different purposes, including supermarket, deli/ wine, internal retail uses and human resources, as well as gift registry.

Carney: Yes. The ROI is easy to show retailers in terms of customer registrations and increased purchases, especially for those retailers who sell some sort of loyalty club. We are having success with our EVTRetail Customer Kiosk for winery tasting rooms where they are using the kiosk to promote their wines and entice customers to sign up for ongoing mailing lists and their wine club. The kiosk automates the entire wine club promotion process, including sign-up and ordering.

What impact is self-service POS having on your business?

Nicholson: As customers require these solutions, we develop and implement combined hardware and software solutions to match the requirements for each situation. As more of these solutions are completed, the price will continue to decrease as existing IP is leveraged, while at the same time the sophistication and feature sets will increase for the average customer.

Gusse: Interest in self-checkout and kiosks continues to increase, and we expect both technologies will more than double last year’s revenue production.

Carney: We see this as a huge opportunity because there’s value for the retailer to purchase new hardware and software to support self-service POS. Customers are also willing to interact with technology now more than ever.

Are you working with any leading-edge POS technologies?

Nicholson: Biometrics is just in the infancy stage within the POS environment. Looking back at speed of transaction as a core driving requirement, biometrics must be accurate and extremely fast for mass adoption.

Payment services are very hot and we have a wide choice of solutions for our customers. Some of our core technologies are high-speed Internet processing, mobile payment solutions, auto-tender determination and gift/loyalty programs.

Gusse: Yes, we are working with the government on WIC (wide-area network interface card) smart readers and several wireless payment opportunities. We have a customer about to start on an electronic check-cashing project with us as well. While none of our clients have yet expressed interest in biometrics, we’re reasonably certain they soon will.

Carney: We are working on a wireless handheld line-buster that enables the merchant to take payments away from their register for events and busy periods.

What are merchants asking for the most with regard to POS upgrades?

Nicholson: What customers want today is to utilize the results of the data collection in meaningful ways that can have significant impact on their business. Our customers want to move beyond the past technology of looking at pages of reports; they want solutions that notify them of situations and trends they can take advantage of or resolve to grow their business. We think of it as pro-active retailing as opposed to reactive. In today’s world, if you’re learning about it a month later, it is too late to take advantage of the opportunity.

Gusse: With regard to hardware, retailers want open capabilities that can be scaled when needed — hence the leaning toward PC technology for POS in many cases for its upgradability, future integration, etc. Clients are looking for peripherals that reduce costs, such as electronic check cashing, biometrics, etc., or improve customer service, such as clean receipts, display technologies, etc.

On the software side, they are looking for applications that are open and easily upgraded, so that ideas get to market faster than the traditional methods with POS solution providers. They’re also looking for software and applications that improve the opportunity for clients to continue shopping with them, such as loyalty concepts, personal marketing, etc.

Carney: Ease-of-use and integration. I think most retailers recognize the value of the enhanced POS hardware and software. The key is it has to be extremely easy to use and integrate seamlessly with the systems they use to run their business.

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