Reduce costly inventory overheads Make better buying decisions Easy accounting Speed up your checkout lines Increase customer service levels Use the system-generated customer
Information to process direct marketing Campaigns
Increase traffic in store Reduce the time spent on Back Office and
Inventory functions Tighten up on security Employee tracking Real-time Reports Improve Customer Satisfaction Manage Using Remote Access Easily Scalable Efficient transaction processing Track promotions and special offers Improve Operational Efficiency Improve Customer Services
Point-of-sale (POS) is the heart of any retail business. All aspects of your operation, purchasing and inventory control, customer service, accounts receivable, and so on come together at your point of sale.
To stay competitive in a fast-changing, cost-conscious marketplace, retailers need solutions that maximize their business agility, and the legacy POS systems that are still in use fall far short of that goal. These systems, increasingly costly, are inflexible of giving retailers the information and power they need to respond to market twists and turns. Retailers running the legacy POS platform are very limited in their choice of hardware and applications. Retailers are not able to take advantage of the cost savings associated with competition that a Cloud based POS system provides. These legacy POS systems were great systems of their time, but the platform limitations have today become a serious hindrance. As a result, retailers are not able to achieve their business objectives and are spending increasingly more money to maintain their systems.
The primary function of point-of-sale is to make transactions, easy to manage without sacrificing quick, efficient service or customer data. Point-of-sale also helps maintain inventory control. The point of-sale application provides maximum efficiency, with all retail transactions conducted from a single screen. The software will minimize the keystrokes required to ring up a sale, handle items returned by a customer, or do a payout from the cash drawer. Fewer keystrokes mean fewer input errors and less waiting for your customers, which translates into a higher degree of customer satisfaction and greater efficiency in your business operations.
A cloud based POS system has more benefit over the desktop based POS system because it adds functionality that user can access their information from anywhere connecting through internet. Most of the POS system are developed targeting the huge retail stores, mega marts and big shopping destinations. Unlike the traditional POS system, a cloud based POS system also provides the modules feasible for small as well as huge retail houses.
The retail industry is one of the most competitive markets today that pushes retailers to continuously create new and innovate methods of retaining customer’s interests and patronage. Companies are in a position where they need to address a variety of internal and external challenges in order to adapt to the market accordingly. These various challenges have been identified as having an impact on revenue, market share, and competitiveness, which all result in any company’s success.
Before understanding the concept of retail, let us first go through few terminologies.
Market - Any system or place where parties are engaged in exchange of either goods or services is called as market. The parties are often called as buyers and sellers. The seller offers his goods or services to the buyer who in return purchases it in exchange of money.
Goods - Tangible (things which can be seen and touched) physical products which are transferred from a seller to the buyer (consumer) to fulfill the latter’s need are called as goods.
2.1 What is Retail?Retail involves the sale of goods from a single point (malls, markets,
department stores etc.) directly to the consumer in small quantities. In a layman’s language, retailing is nothing but transaction of goods between the seller and the end user as a single unit (piece) or in small quantities to satisfy the needs of the individual and for his direct consumption.
Let us understand the concept with the help of an example.
Tim wanted to purchase a mobile handset. He went to the nearby store and purchased one for himself.
In the above case, Tim is the buyer who went to a fixed location (in this case the nearby store). He purchased a mobile handset (Quantity - One) to be used by him. An example of retail.
The store from where Tim purchased the handset must have shown him several options for him to select one according to his budget and need.
From where do you think the store owner (also called the retailer) purchased all the handsets?
Here the manufacturers and the wholesalers come into the picture.
The retailers purchase goods in bulk quantities (huge numbers) to be sold to the end-users either directly from the manufacturers or through a wholesaler.
2.2 The Supply chain
A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request. The supply chain not only includes the manufacturer and suppliers, but also transporters, warehouses, retailers, and customers themselves. Within each organization, such as manufacturer, the supply chain includes all functions involved in receiving and filling a customer request. These functions include, but are not limited to, new product development, marketing, operations, distribution, finance, and customer service.
Consider a customer walking into a Wal-Mart store to purchase detergent. The supply chain begins with the customer and their need for detergent. The next stage of this supply chain is the Wal-Mart retail store that the customer visits. Wal-Mart stocks its shelves using inventory that may have been supplied from a finished-goods warehouse that Wal-Mart manages or from a distributor using trucks supplied by a third party. The distributor in turn is stocked by the manufacturer (say Procter & Gamble [P&G] in this case). The P&G manufacturing plant receives raw material from a variety of suppliers who may themselves have been supplied by lower tier suppliers. For example, packaging material may come from Tenneco packaging while Tenneco receives raw materials to manufacture the packaging from other suppliers.
A supply chain is dynamic and involves the constant flow of information, product, and funds between different stages. In our example, Wal-Mart provides the product, as well as pricing and availability information, to the customer. The customer transfers a fund to Wal-Mart. Wal-Mart conveys point-of-sales data as well as replenishment order via trucks back to the store. Wal-Mart transfers funds to the distributor after the replenishment. The distributor also provides pricing information and sends delivery schedules to Wal-Mart. Similar information, material, and fund flows take place across the entire supply chain.
In another example, when a customer purchases online from Dell Computer, the supply chain includes, among others, the customer, Dell’s Web site that takes the customer’s order, the Dell assembly plant, and all of Dell’s suppliers and their suppliers. The Web site provides the customer with information regarding pricing, product variety, and product availability. Having made a product choice, the customer enters the site to check the status of the order. Stages further up the supply chain use customer order information to fill the order. That process involves an additional flow of information, product, and funds between various stages of the supply chain.
These examples illustrate that the customer is an integral part of the supply chain. The primary purpose from the existence of any supply chain is to satisfy customer needs, in the process generating profits for itself. Supply chain activities begin with a customer order and end when a satisfied customer has paid for his or her purchase. The term supply chain
conjures up images of product or supply moving from suppliers to manufacturers to distributors to retailers to customers along a chain. It is important to visualize information, funds, and product flows along both directions of this chain. The term supply chain may also imply that only one player is involved at each stage. In reality, a manufacturer may receive material from several suppliers and then supply several distributors. Thus, most supply chains are actually networks. It may be more accurate to use the term supply network or supply web to describe the structure of most supply chains.
A typical supply chain may involve a variety of stages. These supply chain stages include:
Each stage need not be presented in a supply chain. The appropriate design of the supply chain will depend on both the customer’s needs and the roles of the stages involved. In some cases, such as Dell, a manufacturer may fill customer orders directly. Dell builds-to-order; that is, a customer order initiates manufacturing at Dell. Dell does not have a retailer, wholesaler, or distributor in its supply chain. In other cases, such as the mail order company L.L. Bean, manufacturers do not respond to customer orders directly. In this case, L.L. Bean maintains an inventory or product from which they fill customer orders. Compared to the Dell supply chain, the L.L. Bean supply chain contains an extra stage (the retailer, L.L. Bean itself) between the customer and the manufacturer. In the case of other retail stores, the supply chain may also contain a wholesaler or distributor between the store and the manufacturer.
Fig. 1 Flow diagram of Supply Chain
Suppliers –A party that supplies goods or services. A supplier may be distinguished from a contractor or subcontractor, who commonly adds specialized input to deliverables. Also called Vendor. Supplier supplies the raw materials to the Manufactures.
Manufacturers – Manufacturers are the ones who are involved in production of goods with the help of machines, labor and raw materials. A manufacturer produces the product.
Wholesaler – The wholesaler is the one who purchases the goods from the manufacturers and sells to the retailers in large numbers but at a lower price. A wholesaler never sells goods directly to the end users. Wholesaler distributes the product.
Retailer – Retailers are those who sell the products in small quantities to the end users as per their requirement and need. Retailer sells the product.
Customers –A party that receives or consumes products (goods or services) and has the ability to choose between different products and suppliers. Customers consume the product.
The end user goes to the retailer to buy the goods (products) in small quantities to satisfy his needs and demands. The complete process is also called as Shopping.
2.3 Retailers Stretch Their POS Systems Investments
Typically retailers refresh (replace) their store systems every five or so years. This includes a hardware and software refresh. A few years ago, based on the beginning of this economic slowdown, retailers started keeping their systems longer and extending the replacement cycle. Some replacements occurred in the 2006 to 2007 time period. However, when the current dramatic recession occurred most retailers deferred any systems replacements.
They were able to do so due to the quality of the systems that they had previously implemented. IBM, for example, is the market leader in point of sale equipment with its SurePOS® point of sale hardware offerings. The IBM POS systems are “retail hardened” and built for long life. IBM has even patented “retail dirt” to be used in testing of the POS hardware to ensure it lasts in the store environment. Due to this quality, IBM POS last a long time and have a high resale value. Retailers are able to get extended life out of the units. Some retailers have utilized IBM POS systems for over 15 years.
The challenge of older IBM POS systems is that they often run the DOS operating system and are not powerful enough to run today’s rich Point of Sale software applications. As a result capabilities to implement new features that help increase sales and improve customer service are not possible. So although the hardware has lasted a long time, the
technology under the covers of the old POS systems is not current with the processors and memory needed to run more modern applications.
As long as these older systems meet the business requirements of the retailer, it appears that extending their life in the stores is a sound economic decision. However, there are hidden costs and other factors to consider.
3. Factors Preventing Continued Use of Old POS Systems
Retail systems providers have attempted to assist retailers who try to extend their systems but have often reached limits due to the technology or obsolete software applications that run on these older systems.
Some factors facing retailers that result in the necessity to replace the systems are:
Compliance Deadlines – All merchants that accept credit cards must implement point of sale payment applications that are PA DSS validated to support the VISA mandate by July 2010. These older systems with software applications that are no longer supported (and therefore not PA DSS validated) in most cases cannot support this requirement. To achieve the deadline and avoid fines that will be imposed by failure to comply, retailers need to initiate the replacement of their old systems immediately.
Protection of Sensitive Customer Data – news headlines have provided ample examples of the cost of breaches of sensitive credit card data of retail customers. The costs to the businesses have been in the millions of dollars in addition to significant damage to the retailer’s reputation and customer loyalty. In conjunction with PCI DSS Compliance standards, newer systems are needed to adequately protect sensitive customer data.
Point of Sale is Mission Critical – one retail systems professional recently said that retailers could operate their stores from a cigar box if necessary and therefore do not see the value in point of sale systems. Quite to the contrary, point of sale systems are mission critical elements of a retailer’s business and should be viewed as necessary as store leases, fixtures, and merchandise to the success of the business. If the retailer attempts to justify the point of sale systems replacement solely by a return on investment (ROI) calculation, they are missing key strategic considerations that are important to the overall success of their retail business.
Hidden cost of hardware failures and maintenance costs – although there are high quality systems in the stores, as these systems are utilized for excessively long
periods of time, the failure rate increases over time. Receipt printers, for example, are one of the hardest worked components of the system and are subject to failure. IBM has great Mean Time Between Failures (MTBF) statistics. However, the hardware does not last forever. Component failure results in lost time in the stores and interruption of customer service. In addition, the annual maintenance cost of older hardware is expensive. At times the warranty of new systems can make a good contribution to the purchase price through the savings achieved on annual hardware maintenance expenses.
Limitation of old hardware and software – In addition to speeds and capabilities of the newer hardware, the capability of the newer systems to run today’s generation of point of sale software applications cannot be overstated in its value to contribute to the success of the retailer. Beyond the mandates of PCI Compliance that are forcing a change, the retailer can benefit from a whole host of new features and applications. For example, specialty retailers carefully hone their business concepts to present their brands, stores, etc. in a concise way to attract their customers. They want to provide the best customer experience, build loyalty, and ensure repeat business. POS systems can be a barrier to the programs that the retailer wants to implement to insure the best experience for their customers or an asset. Older systems unfortunately cannot match new systems in this area.
Customer expectations – consumers during this recession are extremely value conscious. They expect to be presented with value, to be serviced quickly and reliably, and for the retailer to have state of the art systems to support them. Retailers fight hard in a very competitive market to capture their share of the consumer’s limited dollar. Consumers know what good point of sale systems can provide from their experience shopping in a variety of stores. If a retailer does not have a current system, it can impact the consumer and result in lost business. All the hard work, marketing, merchandising, and store sales personnel efforts come down to the point where the consumer faces the point of sale system to complete the transaction. This is the make or break point for customer satisfaction.
Centralized Database –A centralized DBM has several advantages over such stand-alone systems:
Reduced redundancy good planning can allow duplicate or similar data stored in different files for different applications to be combined and stored only once.
Improved availability information may be made available to any application program through the use of the DBM
Reduced inconsistency if the same data is stored in more than one place, then updating in one place and not everywhere can lead to inconsistencies in the database.
Enforced data security authorization to use information can be centralized.
For the purpose of Retail management, the issue of improved availability is particularly important. Most application programs create and own particular datafiles in the sense that information is difficult to obtain directly for other applications. Common problems in attempting to transfer data between such special purpose files are missing data items, unusable formats, and unknown formats.
As an example, suppose that the Purchasing Department keeps records of equipment rental costs on each project underway. This data is arranged so that payment of invoices can be handled expeditiously and project accounts are properly debited. The records are arranged by individual suppliers for this purpose. These records might not be particularly useful for the purpose of preparing cost estimates since:
Some suppliers might not exist in the historical record. Finding the lowest cost supplier for particular pieces of equipment would be
exceedingly tedious since every record would have to be read to find the desired piece of equipment and the cost.
No direct way of abstracting the equipment codes and prices might exist.
An alternative arrangement might be to separately record equipment rental costs in
(1) Purchasing Department Records,
(2) Cost Estimating Division, and
(3) Company warehouse.
While these multiple databases might each be designed for the individual use, they represent considerable redundancy and could easily result in inconsistencies as prices change over time. With a centralized database, desired views for each of these three users could be developed from a single database of equipment costs.
Lack of Analytics – Today, point-of-sale solutions offer a great way to monitor sales transactions, as well as manage other aspects of a retail business. However, many solutions lack the capacity to provide analytical information on retailer’s sales opportunity. By measuring in-store traffic data, retailers can monitor purchasing conversion rates and enact operational adjustments to help make the business more profitable. As an Example, Let’s Consider By integrating both traffic collection data and transactional sales data within the POS solution, retailers would gain greater visibility into their stores conversion rates – or the rate at which store customers
make an in-store purchase. Retailers could then use these metrics to gain better knowledge of the customers entering the store. With this insight, retailers would have better information at their disposal to make decisions on how to improve conversion rates, streamline operations and boost profits.
Doesn’t address new problems and technical advancements introduced in last decade – Social media advertising has taken a boost in the last decade; increasing awareness about a product through social media has become a major part of advertisement. Easy integration of new coupons/loyalty and rewards programs introduced at a fast rate. Mobilization of terminal which includes mobile POS card readers and payment using online payment gateways has increased in last decade. Legacy system has not been able to address these types of changes.
4. Benefits of POS
Here are just a few benefits of POS over mechanical cash registers.
POS SystemCash
RegistersInventory Control YES NOInvoicing and Receiving YES NOInterface And GUI YES NOAccounting Reports YES LimitedEnforced accuracy YES NOIntegrated CC handling YES LimitedGeneral Ledger Accounts YES LimitedPayable Accounts YES NOReceivable YES NOTax consultants YES NOReporting YES NOAnalytics YES NOCustomer Data YES NO
Table No. 1. Benefits of POS over mechanical cash registers
Due to the recession, retailers have better options than ever before in replacing their point of sale systems. Although retailers do not realize it, now is the best time to replace their systems.
Some key reasons that this is true are:
Manufacturers and software companies are hungry for business – the recession has affected the demand for new point of sale systems so manufacturers and software companies are eager for new business and willing to make deals. There has been consolidation in the retail systems software space over the last few years. However, the market remains highly competitive with many companies such as Sale Point that specialize in certain market segments, provide value based solutions, and earn great customer satisfaction ratings. These companies will assist the retailer in reviewing options and obtaining the best deal possible.
New features and functionality can increase revenues – Centralized returns, customer loyalty, centralized customer marketing, gift card programs, fast centralized credit authorization and other features found in today’s software can result in reduced costs and increased revenues for the retailer.
Enhanced integration can improve overall business – in the past point of sale applications running in the stores were information silos of limited data that was batched overnight to corporate retail systems. Now with high speed internet connections to the stores, point of sale applications provide an integrated system for the retailer that allows them to perform real time functions to support their sales and operations.
Adjust to the new level of consumer demand – inventory management has always been a key driver of point of sale transaction tracking. Now more than ever, having rapid and reliable data on inventory movement in the stores is critical to adjusting to a consumer demand that has changed during the recession from the demand that the retailer had experienced before. Quick and responsive systems are keys to not having inventory tied up that is not moving and must be marked down. Multi-Channel retailing and integration of e-Commerce and brick and mortar stores can be handled by the newer systems.
4.2 Top 5 Business Reasons to Migrate to Cloud Based POS
Retailers typically stay with their POS systems for years because of the costs involved in upgrading their entire infrastructure. The constraints retailers are facing today because of these systems and the vision they have for the future are show in the chart below.
Today’s Constraints
multiple, fragmented systems
proprietary data
data integrity
user isolation
inflexible to change
The Vision
industry leverage
data management
consistent user interfaces
interoperability assurances
highly flexible, maneuverable
reduce operating costs
meet and exceed customer expectations
Table No. 2 Comparison of legacy and current POS System
Today’s constraints with the other POS are prohibiting retailers from achieving their future vision. Seamless communication across the enterprise is difficult to achieve. With data stored in a proprietary file system on the operating system, access to information is limited. The only way to read the data is by using a proprietary API. This proprietary format limits the ability for near real-time access to data and other business intelligence activities at the store level.
User isolation is another constraint of the existing POS. The user interfaces are typically text-based and more difficult to use. This makes the employee’s job much more difficult than with graphical user interfaces. As a result, a greater level of training is necessary. In an industry where employee turnover is high to begin with, anything that can help reduce training costs is critical.
Probably one of the biggest constraints is the inflexibility to change. The operating system is tied to the hardware. You are limited to a single vendor’s innovation and delivery. The end result is that your retail organization cannot quickly change with the marketplace.
Retailers have a vision for the future where these constraints are lifted. That future vision, as shown from a technology perspective in the chart above, can best be summarized into five business objectives:
Improve Business Agility
Improve Operational Efficiency
Have Better Access to Information
Control Hardware, Software, and Labor Costs
Improve Customer Service
In this section, we will take a look at these five business objectives in more detail and will show how migrating to cloud based POS system will allow retailers to meet each of these objectives. With the roadblocks of proprietary systems out of the way, retailers will then be in a much better position to increase sales and market share through improved customer service, while lowering their expenses through reduced system acquisition costs, lower life-cycle maintenance costs, and higher employee proficiency.
1. Improve Business Agility
Businesses must have the ability to quickly adapt to changing business needs. It can be very costly to invest in a solution today that will not grow with your business needs. If the platform retailer chooses doesn’t allow them to quickly adapt to those changing conditions, then they will face numerous roadblocks along the way that can become quite a hindrance.
To retailers and other businesses, having CHOICE in selecting hardware and software is critical. They need the ability to take advantage of best-of-breed applications that provide the best functionality for the best price. Improving service offerings is critical for retailers to stay competitive in today’s fast paced environment.
With legacy systems, business agility is limited for three reasons:
1. Lack of technological innovation,
2. Non-adherence to industry standards, and
3. Lack of migration path.
With cloud based POS systems, on the other hand, your business agility is greatly improved.
Many retailers are capitalizing on their recognized brand name and the consumer’s emphasis on convenience to expand into other areas of retail under the same (probably enlarged) roof or through other channels such as the Internet. One example is the number of supermarkets that now boast video rental, pharmacy, and dry-cleaning departments. Another example of the blurring boundaries is the emergence of the “super retailers”, which sell into virtually every sector of retail.
As stores grow in size and available services, the ability to improve operational efficiency is crucial. System integration and increased functionality are two important aspects of improving operational efficiency.
3. Have Better Access to Information
Retailers are also finding they need better access to information. As the retail environment has grown more complex, managers have to take an increasing number of factors into account in making their decisions. This means that information of all kinds (customer, trading, product, supplier, availability, and so on) must be easily available to the managers that need it, wherever they are.
This is where Cloud based POS systems shine. Business solutions based on cloud allow retailers to make more informed, timely decisions to quickly and profitably respond to changing customer’s needs. By empowering employees with this business intelligence at the store level, they will have fast access to a whole new world of information that can be leveraged to positively affect business operations in new and creative ways.
Global retailer Marks & Spencer has recognized the benefits of moving data quickly through their enterprise. They implemented a solution based on BizTalk™ Server 2000, XML, and the ActiveStore Sales Transaction RBI that allows data to move to their data center in near real-time. By implementing this system, Marks & Spencer is expected to realize a 4% increase in revenue growth and a 10% reduction in accounting and inventory costs, for a total business value of $17 million (U.S.).
Another important aspect of data analysis is reporting requirements. With cloud based POS systems and relational databases, report generation is much simpler. You can take advantage of powerful data analysis software to quickly dissect the information needed to run your organization. A question that sometimes comes up about relational databases is whether they will be able to operate quickly at point-of-sale. The answer is yes. Not only can you gain the benefits that relational databases offer, but you can do so without having to sacrifice performance. The hardware and software available today for POS systems are well equipped to provide timely responses at cash registers that interact with relational databases.
Controlling operating costs has been a top-of-mind issue for retailers since the industry was born. Hardware, software, and labor costs all have a significant role in impacting the bottom line of their enterprise. Retailers using proprietary POS systems today are finding the need to investigate other alternatives because the ongoing operating costs are becoming quite expensive for them to bear.
With POS systems, retailers have an immense number of individuals qualified and interested in using solutions. They are easier to hire, train, and retain. By solving the labour problem, retailers can keep their labour costs and ultimately retailers overall operating costs under control. More importantly, retailers speed to market is improved in delivery IT support for business objectives.
Another reason that POS systems can potentially help you lower operating costs is because of the streamlined operational efficiency discussed earlier. With a common look and feel across various applications, employees, such as the sales clerks, are more productive no matter what department they are assigned to on any given day. This decreases training costs and costs associated with lower productivity.
With user interfaces that are easier to work with for employees, they are also likely to be happier because their work is easier to accomplish. In an industry where employee turnover is high already, anything that can be done to make the employee’s job more productive and manageable can only help in lowering the high turnover rate. All of these have a positive impact in controlling operating costs within the enterprise.
For example, NCR’s popular DynaKey solution helps retailers reduce training by as much as 60% and increase productivity by as much as 20%. DynaKey provides retailers with an intuitive user interface. Touch screen systems with graphical user interfaces have also been shown to reduce training when compared to keyboard-only systems.
In our software we will come up with very unique GUI design, which will be designed in such a way that even the novice user can adapt the system very easily and in less time duration. This will allow us to reduce the training cost by 75%.
By migrating to a POS systems environment, retailers can control their hardware and software costs by having the freedom to choose from multiple vendors. This allows their development staff to make use of powerful development tools on open systems that allow quicker development and implementation of new solutions. As a result, retailers can lower your labour and training costs by implementing more intuitive interfaces for their employees.
5. Improve Customer Service
Customers are more aware of their power and are not afraid to ask for what they want. Retailers must earn their customers’ business over and over by providing excellent
service, competitive prices, and attractive incentives. Retailers need to be able to anticipate merchandise trends, and to make the shopping experience convenient for the customer. At the same time, retailers have the opportunity to collect more kinds of information about consumers and their spending habits. Retailers who have the ability to mine the information they need and react to it quickly can offer targeted promotions and enjoy increased revenue opportunities. POS systems can be the solution to this problem that retailers have been looking for.
Improving customer service is a natural result of achieving the other business objectives we’ve discussed so far. For example, when you have the ability to analyze information better, you have the ability to determine what your customers want. If they come into the store and you are out of what they need, then they are going to leave unhappy.
When retailers operation runs smoother and their associates are happier, they treat customers better. If they are able to perform their job easier, the customers will receive better service and will have a more pleasant experience. Retailers never want to make their customer feel frustrated and like they are a burden. They want to make it easy and efficient for them to move through the lines and they will be happy to return. Productive employees mean less waiting in lines for customers. Improving operational efficiency is a key step to helping customers receive the service they deserve.
With POS systems, retailers can provide their customer with a richer environment, such as streaming media for promotions and news items. They also can make use of smart cards and other features to improve the shopping experience. Having the business agility to change according to customer demands is critical. Retail organizations that are able to adapt the quickest in today’s fast changing marketplace are most likely to win the hearts of the customers. Retailers who do not have the agility to change with the market will find themselves losing to their competitors.
Another facet of improving customer service is controlling your operating costs. If retailers control their operating costs, then they are able to pass more savings along to the customer. If they have to spend less money in labour, hardware, software, and training, then they have more of a margin to provide customers with great deals that will keep them coming back over and over again.
The point of sale screen has the following features:
Easy to learn - You do not have to send your staff out for expensive training. Easy to use - Requires minimum keystrokes and the mouse is never required
(but you can use it if you want). Flexible - Handles any combination of discounts, taxes, returns, credits and
sale specials in one easy transaction. Automatic - Applies automatic discounts or preferred price levels to special
customers. Rewarding - Helps your staff to practice suggestion selling and tracks their
sales commissions. Accommodating - If something is not in stock you can send a customer
order to the purchase order system. Secure - You control who can see the profit margins and stock counts. Customer-oriented - Lets you reward your best customers with a bonus
points program. Versatile - Prints sales slips, price quotes, packing slips and account invoices. Up To Date - Works with all the current retail devices including bar code and
credit card readers, customer display, cash drawer, barcoded scales, a two-color receipt printer and runs on any network.
6.1 The Client Database
A client database contains your customer's names, addresses and purchase histories. It keeps useful information about each customer that can help you with marketing and sales management. Some features of the client database are:
Fast - Lets you find a customer fast using a name, phone number, or a point-and-shoot pick list.
Informative - Shows you who bought what, when, for how much, how they paid, and who sold it to them.
Complete - Lets you keep notes on individual customers and even a photo if you wish.
Accurate - Creates accurately targeted mailing lists for special promotions or even product recalls.
Attracting a new customer costs much more than keeping an old one. Mailings can be targeted using any aspect of the customer's purchase history which generates a much larger response than non-targeted mailings. There are many ways you can use the system's
customer data to increase sales volume. In addition to the purchase history client database can also include memos for recording of any key information about a customer.
6.2 Sales Features
Works with touch screens based systems Time Based Discount Rules (Buy X Get Y for Z%, Mix and Match, etc.) Recurring billing with card on file (great for club management and service Businesses) VAT for countries that support a Value Added Tax Open multiple sales screens Line item consolidation Consolidated item listing Serial number tracking Layaways Credit card processing options. Use one of our integrated processors to get the lowest rates. Or use your own. Split payment media. Handle all those Visa gift cards being used for payment. Sales Manager. Allows you to view, reprint receipts, change, copy and void
sales. View saved sales, open orders (deposits), layaways, gift certificates and daily sales totals.
6.3 Inventory Control / Purchase Orders
Good inventory control means balancing the expectations of your customers and your bankers, so you must avoid being either under stocked or overstocked. Here are some inventory control features:
Flexible - Auto-generate purchase orders using a variety of calculation methods.
Current - Get up-to-the-minute reports for sales, inventory, low stock, over stock, and on-order items.
Precise - Read data from a portable stock counting device.
In Control - Do on-screen preview and editing of purchase orders.
Fine Tuned - Consider base stock, re-order points, re-order quantities and sales performance when calculating orders.
Focused - Limit any report to selected items, suppliers or departments.
The inventory system includes a wide selection of processes from receiving & transferring stock to importing & exporting stock data. The system also uses the internet to transmit inventory adds & changes, sales logs and stock levels between stores or to and from head office.
6.4 Invoicing
The built-in invoicing system has:
Fast payment and reprinting options. Client oriented displays - it’s always easy to pull up all Jane Doe's invoices. Monthly statements and late charges. Option to open the invoice database in MS-Excel. A screen for reviewing any client's invoices.
6.5 Reports
Well-designed reports can reveal some surprises about the nature of your business. Examples include:
A selection of weekly, monthly and quarterly sales reports including top sellers.
A selection of inventory reports including overstock, under stock, audit and shrinkage.
Options to focus any report on selected items, suppliers, department or code range.
History of daily sales and POS totals. Option to subtotal reports by department. Catalogue style output with product description, stock numbers, and prices. Export of sales data to a spreadsheet program for further analysis.
6.6 Convenience Features
The goal of POS system is to let you concentrate on your sales and customers, not on your computer. The convenience features are:
Extensive use of pick lists for finding items, invoices or clients (including client lookup by name, company phone number or customer number).
Support for multiple inventory files - and stock transfers between stores. Sales tracking by product, department and client. Comparative sales histories. Price quotes that can be recalled and processed as sales.
Import inventory from other databases. Store all data in a common file format for access by other programs. Stock code duplication check. POS screen can display the all-time total spent by a client.
6.7 Security Features
Security refers to two different things:
1 - The ability to limit access to information or program functions. This is used to make sure that staff cannot make unauthorized transactions or see confidential information. Each employee is assigned a Username and password to determine their access level.
Some of the features are:
Username determine the functions a person can use. All sales transactions are logged with the date, time and name of the sales
person. Optional requirement for a manager's password before the system will void a
sale. A training mode, in which all POS functions can be used but no data is saved.
2 - The ability to roll back (restore) your data to a previously saved version. This is used to undo the results of serious errors. For example, say you delete twenty invoices and then discover that they were the wrong twenty. Everyone who works with computers has days like that (bar none). An easy way out can avoid big headaches.
The rollback features are:
Selective roll back - the user can choose sales, inventory, and client or invoice data.
Selective or batch backup - back up selected files or do them all in a at once. Automatic warning if your disk space runs low.
Most POS systems are sold by vendors who are able to implement the complete system: software installation, programming, hardware setup, maintenance, and even employee training and merchant services. Many businesses experience “sticker shock” after learning that POS software, compatible hardware, and programming costs can run upwards of $10,000. It is important to remember that a POS system is an investment- in most cases you really do get what you pay for.
A good POS system will make your employees more efficient (saving on payroll), make record keeping easier (saving on administrative costs), and make your customers happier (resulting in more sales). Conversely, a cheaper but poorly implemented or poorly customized POS system will actually cost your business money. Many businesses have made the mistake of purchasing a one-size-fits all system only to find out how difficult it is to program, and end up not using the system at all. If your system is confusing, it might cost employee time and resources. Systems that are not accurate can result in record
keeping mistakes, which can be disastrous if you are ever audited or if you file an error-ridden tax return. All of these theoretical costs are important to consider in addition to the sticker price of the system.
Some other important costs to consider:Equipment- At minimum, POS systems require a separate computer on which to run the system, which will usually cost less than $1,000. Keyboards, scanners, and equipment for credit card processing. All vary in cost depending on the model and number purchased.
Maintenance and service- Some vendors provide maintenance or warranties as part of the initial purchase. Pre-paying for maintenance or purchasing a warranty is a good way to save on these peripheral costs.
Employee training- No matter what system you implement, you’ll have to spend time and money training your employees. A vendor can offer these services will be able to help employees understand how to use the system efficiently.
Compatibility with existing merchant services: Most POS systems allow credit card processing at the POS terminal, and can be linked to an existing merchant account. There may be costs associated with switching to a different account provider if the POS system you wish to use is not compatible with your current system.
1. Monthly Subscription:In this type of subscription, you can charge your customer on monthly basis.
Currently POS software in market ranges from $50 - $200.You can charge your client $150
2. Yearly Subscription:In this type of subscription, you can charge your customer in yearly basis.
Currently POS software in Market ranges from $1000 - $2500.You can charge your client $1500
As per the above Table No.5 where we have discussed about Employee expenses (i.e. 2 employees), if these employees can generate at least 5 sales per month.
As per the above table No. where we have discussed about Marketing Expenses ($1000= 1000 clicks in Google AdSense). Even if 100 clicks generates 1 sales then,
1000 clicks will generate 10 sales.
So total no of sales will be 20.
Income in that month will be (20 X $150) = $3000
8.2 Hardware Devices:You can sell compatible hardware component of your software to your client. Below
table represents the Current market value of hardware:
Devices Current Market ValueCredit Card Reader $50 - $75Receipt Printer $200 - $300Bar Code Scanner $200 - $300PIN Pad with Integrated Card $300 - $400Pole Display $ 200 - &400Electronic Cash Register $300 - $400Credit Card Reader for iPhone and iPad $200 - $300
Table No. 7. Cost table for different Hardware devices
All Data and Time Frame in the below Table Is Post Launch and will depend on actual date of launch
In this section we will see the investment distributed over some time period. Below table will give the clear picture of your investment over 18 months for developing the
software, marketing and legal formalities for business.
