| One of the most critical and possibly frightening | | | | The unfortunate reality of dealing with technology is |
| purchases a retailer will ever have to make is a point | | | | that things do go wrong and when they do, support is |
| of sale system. It is a critical purchase because it will | | | | required. If the hardware, software and network are all |
| force the retailer to reexamine their business policies, | | | | supplied by different vendors you may be forced to |
| procedures and plans for the future. It is a frightening | | | | do an initial diagnosis in order to determine which |
| purchase because few retailers have experience in | | | | element is broken before calling in the appropriate |
| selecting a point of sale system and with such a large | | | | support team. This could lead to 'finger pointing' with no |
| investment required they will have to live with their | | | | single vendor accepting ownership of the problem. The |
| decision, be it good or bad, for quite some time. This | | | | alternative is to select a 'turnkey solution' where one |
| document lists the essential items that retailers should | | | | company is responsible for procuring the required |
| consider in their POS buying decision. | | | | products or services and supporting them. For smaller |
| Determining Your Needs | | | | retailers this is often the best choice as there is only |
| The first step in picking the right point of sale system | | | | 'one throat to choke' so to speak. If anything goes |
| for your business is determining your needs. You know | | | | wrong there is only one number to call and the |
| best what business processes need to be automated | | | | responsibility of diagnosing and managing the issue |
| for the greatest return on your investment. Make a list | | | | through to resolution falls on them. Leading vendors |
| of key business processes and features that you | | | | offer 24/7 support which is vital because retail is not a |
| require and prioritize them. For example, are you | | | | 9 to 5, Monday to Friday business. Once you have |
| looking for gift cards, inventory management, | | | | determined the hours during which you require support |
| integrated credit and debit, accounting integration or | | | | the next step is to determine what level of support |
| customer relationship management (CRM). You should | | | | you require. Level 1 support typically includes standard |
| also determine your support requirements. There are | | | | support for all user related problems while level 2 |
| almost as many support options as there are POS | | | | support typically means that a more technical in-house |
| applications. Again, you know best what your needs | | | | resource is required. |
| are so it is best to make a decision about whether or | | | | Training |
| not you need network support 24 hours a day or just | | | | The final and possibly most overlooked element of the |
| between 9 and 5. Can you wait until the next business | | | | point of sale system is staff training. This is especially |
| day for hardware replacement or do you require | | | | critical given the transient nature of retail store staff. |
| someone onsite in four hours or less and lastly do you | | | | The typical retailer rationale for purchasing a POS |
| have your own customer services department to | | | | system is to streamline processes, increase customer |
| provide level 1 support for your staff or is that a | | | | throughput and improve data accuracy but even with |
| vendor requirement? The more effort you put into the | | | | the very best system if the employees do not |
| planning stage the better prepared you will be to | | | | understand it or do not know how to use it properly |
| understand your needs and evaluate your potential | | | | the business will not realize a single benefit. In fact, a |
| options. | | | | lack of staff training could result in decreased |
| Understanding the Elements | | | | customer throughput, lower customer satisfaction, |
| While the very term 'point of sale' evokes an image of | | | | inaccurate inventories and lost sales. Remember the |
| a stand alone box on a checkout counter, a point of | | | | POS is the last impression you will make on each |
| sale system is actually a combination of elements | | | | customer. Budget an appropriate amount of time and |
| working together. A good point of sale system will | | | | money to ensure your staff gets the most out of your |
| likely include hardware, software, transaction | | | | new system. |
| processing, network and support. Let's start with the | | | | Things to Consider |
| single most critical element, the software. | | | | Once the software, hardware, transaction processing, |
| Software | | | | network and support have been chosen most retailers |
| There are literally hundreds of different software | | | | would consider themselves finished. In reality it is just |
| packages available. A quick search on Google will | | | | the beginning. We touched briefly on PCI DSS but it |
| reveal software in a wide variety of price ranges | | | | must be reiterated that PCI compliance is not an option |
| designed for a wide variety of market segments. | | | | it is a necessity. Fines due to non-compliance are |
| Software is the most critical piece because it is the | | | | designed to devastate a business not penalize it. A |
| element that will deliver the 'feature functionality' that | | | | similar concern is the ability to accept EMV or Chip and |
| retailers desire; the other elements of the system are | | | | Pin credit/debit cards. These cards will become |
| present simply to facilitate the software. As a result, | | | | standard in Canada as of October 2010 and retailers |
| the type of software you choose will largely determine | | | | who do not have the appropriate hardware and |
| the requirements for the other elements of the | | | | software to process these cards will be potential |
| system. Being the most critical element in the POS | | | | targets for fraud, charge backs and fines. |
| system software is also the most expensive. There | | | | If you currently have an electronic cash register and |
| are plenty of cheap or even free alternatives out | | | | this is your first automation, be prepared to put in some |
| there but when it comes to POS software the old | | | | effort. It is a quite a lot of work to SKU all of your |
| adage is true, you get what you pay for. Industry | | | | items but the benefits of increased inventory control |
| specific packages often ensure that the software will | | | | and reporting abilities more than make up for this |
| closely map their user's intended operations. While a | | | | effort. If this is not your first automation and you are |
| restaurant business will most likely be better off using | | | | making the transition from one POS system to another |
| a restaurant specific software application, beware that | | | | you will have to consider data conversion. If you hope |
| there is often a trade off between just how narrow | | | | to maintain current customer records, transaction |
| the focus of the software is and the level of | | | | history or any other relevant information it will need to |
| investment the vendor can afford to make in ongoing | | | | be converted from your old system to your new one. |
| development. For this reason, a review of general | | | | Beware of vendors who agree to data conversion |
| merchandising systems is recommended. | | | | without viewing a sample of your current data first. |
| Hardware | | | | Data conversion is simple in some instances but more |
| The hardware is the next element of the POS system | | | | than likely it is a large and daunting task that could |
| to consider. The hardware requirements will be largely | | | | require many man hours to complete. |
| determined by the selected software. It is best to | | | | Another consideration should be the viability of the |
| choose retail specific hardware from a reputable | | | | vendors you select. You are not just purchasing a |
| hardware manufacturer. 'Retail hardened' hardware as | | | | point of sale system; you are entering into a long term |
| it is often referred to, is typically more stable and | | | | relationship with your selected vendors. For the |
| better suited to the retail environment than standard | | | | purposes of a point of sale system it may be |
| PCs. Be sure to assess your peripheral requirements | | | | beneficial to think of the companies you select more |
| at this time (scanner, ups, printers, etc.), to ensure your | | | | as business partners rather than typical vendors. It is |
| hardware vendor is compatible with all of the essential | | | | critical, especially in these tough economic times, to |
| peripherals. | | | | assess the viability these business partners. Are they |
| Credit and Debit | | | | making healthy profits or could they be on the brink of |
| The next consideration is the ability to accept debit and | | | | cut backs? Will they be able to maintain a strong |
| credit cards or transaction processing, which comes in | | | | support staff and continue to release updates |
| two forms, stand-alone and integrated. Stand-alone | | | | throughout the length of your agreement? If you |
| debit/credit machines have two major draw backs. | | | | purchase your hardware from a reputable |
| They do not communicate with the POS system and | | | | manufacturer such as Hewlett Packard or IBM you |
| they utilize a phone line to transmit data. Integrated | | | | can feel confidant that they will continue to support |
| debit/credit is connected to the POS and shares the | | | | your product but if you buy software from the local |
| POS system's high speed network connection. The | | | | computer guy you might have cause for concern. |
| benefits are that transaction data does not need to be | | | | The final topic is price. When estimating price it is |
| reentered at the POS, transactions are processed | | | | critical to consider the total cost of ownership rather |
| much faster over the high speed connection and the | | | | than simply adding the values of the various physical |
| dedicated phone line as well as its associated costs | | | | components. This means including maintenance, training |
| can be eliminated. The availability of this feature will be | | | | and support fees and calculating them over a |
| determined by the selected software application and if | | | | reasonable life expectancy for your system. There |
| required integrated debit/credit should be included on | | | | are countless articles on cost justifying and budgeting |
| the list of key business processes and features as | | | | for technology purchases in the retail industry and the |
| outlined in the 'Determining Your Needs' section. | | | | only thing these articles have in common is their |
| Network | | | | author's love of generalizing POS prices. Some |
| Any business with more than one location will likely | | | | experts base the IT budget on a percentage of sales, |
| need a high speed network connection to aggregate | | | | with percentages usually varying between 0.5% and |
| the data across multiple sites. If the stores use a stand | | | | 3%. Other authors prefer to put a dollar amount on the |
| alone debit/credit machine then any standard | | | | system anywhere between $5,000 and $25,000 per |
| connection will suffice, but if integrated debit/credit was | | | | lane. The estimates for on going support are similarly |
| one of the high priority requirements then the Payment | | | | skewed. Clearly, there is a wide variety of price |
| Card Industry Data Security Standards (PCI DSS) | | | | ranges and the only advice I can offer in this regard is |
| dictates that you must install and maintain a secure | | | | that as much as possible you should let the feature |
| network, meaning you will need a firewall in order to | | | | requirements drive the selection process not the price. |
| ensure the security of cardholder's data. | | | | While that is easier said than done it will result in a |
| Support | | | | significantly more profitable and satisfying experience. |