There has recently been an increase in the number of cloud based POS systems arriving on the market. Many of these are tailored for niche markets, in particular hospitality, convenience stores and small “pop up” stalls. Although low or zero initial capital expenditure is an obvious attraction for start up businesses there are also compelling advantages to be gained by larger operators replacing their legacy POS/BOS systems.
1. Smaller operators and new start ups
The main advantages are:
- Zero or low capital expenditure. Most systems are based around the Apple iPad or equivalent android tablets which are cheap to buy and in many cases with a small retail or hospitality business the owner may already have a tablet and only needs to invest in a printer and card reader.
- Software is continually updated allowing a constant stream of new features in response to user requirements.
- Low ongoing costs. Typically around £50.00 per month including support from the software provider.
- Reliability – in the unlikely event of a hardware failure a new unit can quickly be substituted.
- Data backup is provided by the software vendor.
- Highly portable – market stall holders and hospitality event management companies can set up at a venue in very short time. Tablets with 3G mobile connections may even be able to operate in areas with no power supply for extended periods.
- Younger members of staff are used to operating mobile devices and can be quickly trained.
2. Larger operators
The main advantages are:
- Low capital expenditure. Replace and standardise your hardware for minimal cost. If your network is growing by acquisition this can be very attractive when compared to operating a mixture of elderly systems inherited from the previous operators.
- Ease of system updating. Bar code updating can be carried out through the day rather than as a batch job overnight. This makes time dependent pricing a realistic possibility.
- Ease of data analysis. Your main database is being constantly updated allowing real time monitoring of the performance of different outlets. Mine the data to improve the offering to your customers.
- Data sharing between applications. Sales and invoicing data can be automatically transferred to other applications for example payroll and accountancy.
- Couple a cloud POS system with a cloud accountancy system, for example CounterBooks (www.counterbooks.com) and you have the power to monitor and control either a directly managed network or a franchise operation.
- Take the till out on the sales floor. Staff can engage with customers and sell out of stock items for home delivery. This can also be useful for queue busting.
3. Myths and misconceptions
The move from traditional POS/BOS systems to cloud systems will be as great as the previous move away from mechanical cash registers. As usual in such cases the manufacturer of the old style product will present many reasons why the new technology is inferior. Here are three:
- Your data isn’t secure stored on the internet.
Well it’s probably more secure than on a server with a single hard drive which never has a backup performed because the tape drive stopped working a couple of years ago.
- If the internet crashes you won’t be able to make any sales.
All professionally designed cloud POS systems allow data to be cached locally until the connection is restored so that the user can continue selling (and making money!). The internet itself was designed to be resilient and it’s more likely an interruption will be due to a physical failure such as a cable being damaged during road repairs. If you are worried then install secondary ADSL lines or failover to a 3G mobile connection.
- It’s just a passing phase. My XYZ steam powered system will still be running when all these new ones are dead and gone.
Well maybe, but look what has happened in the last decade or so with video and audio cassettes, 35mm film cameras, record players, adding machines, word processors, CRT screens…..