Point of Sale, often referred to as POS should really be called Point of Service. In any company, if you really want to understand what is happening, look at where the money changes hands. All too often this critical moment that is the culmination of all our marketing, advertising, store design and layout, inventory management, assortment planning, in store signing, sales associate training, pricing and merchandise presentation is not a pleasant experience for our customers. In all the excitement of the threat of the new e-tailers it is becoming even more lost in the shuffle.

Abandoned Baskets

As a matter of fact, one of the least talked about statistics on web sites are "abandoned baskets". Unless you are a grocery store, you may have never heard of this statistic. In a grocery store we look at how many customers came into the store, filled or partially filled a basket and then abandoned it before they reached the Point of Sale. Often, if this number of abandoned baskets is high it is a pretty strong indicator that our lineups were too long at POS and the customer got frustrated and left. Now, this is not the reason for every abandoned basket, some are due to genuine emergencies that customers have (such as forgetting their wallets!). The same statistic is tracked on the web. In this case, it is the measure of how many customers filled their shopping baskets and did not complete the order. In the case of the web, abandoned baskets are not felt to be caused by "long lines" but rather by sticker shock when the customer sees the delivered price after shipping and handling has been added. In supermarkets if you had ten percent abandoned baskets you would have a serious problem, on some web sites abandoned baskets can approach 30% or higher. Clearly showing a real problem with that Point of Sale.

Multi Channel vs Pure Play

Despite all the hype about web retail and virtual retailers the reality is that most business is still being done by "brick and mortar" retailers. For most categories, even in the next five years, web retail will not exceed 15% of total sales. What we are seeing is that the slow-to-web brick and mortar retailers are now beginning to adopt a multi channel approach. This approach is widely believed to be the one that will win more customers than pure virtual retail or pure brick and mortar. The multi channel approach is very simple, it is saying to the customer, "Any way that YOU want us to serve YOU, we will." This means that the customer can shop in our store, call us on the phone to order products, browse our catalogue (if we have one) and visit our web site to shop there. We are available in one way or another twenty four hours a day, seven days a week, 52 weeks a year.

Smart money is on the retail store brand names that customers recognize because they see them every day and are available for quick shopping trips when necessary and also available to deal with returns and adjustments. It has been noted that when the CLUMPS (Computer literate upwardly mobile professionals) no longer dominate web purchasing, as they do now, and middle America begins to trust and shop the web, that the majority of customers will choose stores that they are familiar with. Don’t you think that it will be more likely that a customer will remember Sears.com or Wal-Mart.com and not wehaveeverythingintheword.com?

Where It All Happens, Point of Service

As we noted in the beginning of this article, today we have to be where our customer wants us to be and provide the service that they require. There is probably no more demanding space than the last three feet in the store, when we consummate the transaction with the customer. Have you ever stood in a grocery store line, or a line at the Gap or Toys R Us? Most of us have, and what we notice is that most of the time the process moves relatively quickly. What we often fail to notice is that one of the reasons for this is the hardware that these companies use. POS hardware is often the most overlooked and under planned component in almost all independent retail businesses. Often the owner or manager selects a PC based POS system and then makes the mistake of believing that one computer is the same as another, and price becomes the determining factor.

So they go off and buy a low priced PC, often with the standard keyboard that comes with the machine (about a $10.00 part, by the way) and then add the cheapest receipt printer that they can buy (which also takes about five minutes to change/add new paper), a LED scanner that has to touch the bar code to read it, and add a cash drawer. Then, when confronted with the credit card dilemma, often opt for a free standing credit card approval box that is separate from their PC system. Is it any wonder that after a few months the keyboard begins to stick, the scanner no longer works, the credit card machine falls off the counter, the printer jams or produces receipts that are all but unreadable?

Sleeping with the Enemy

I have always found it fascinating that many retailers turn into just the type of customer that they themselves do not want in their own stores. A customer that is not interested in quality or service, just price. I call it "sleeping with the enemy." As retailers we try to impress upon our customers the folly of trying to get something for nothing, and the lesson that quality and functionality do not come cheap. How often have you wanted to grab a customer, shake them and tell them that you can’t pay $12.00 for an item and expect it to perform and last like a $50.00 item?

Our POS hardware should be the last thing that we have to worry about in our store. It should be rock solid, easy to repair (this means that service and parts are easy to come by), fast and durable. You don’t get all this by paying the lowest price! Receipt printers should be ultra fast and today, thermal is often the way to go. Scanners should be laser and be able to read a bar code from at least six inches away, keyboards should be heavy duty and have a built in card swipe for credit cards. Many retailers are also not providing customer pole displays and this is often a mistake. Today, customers are very interested in what items are scanning at, and a customer display is a great service to the customer. How many of us have to wait to read the receipt to know that we were charged the wrong price?

A great POS system can add a substantial amount of money to a retailers bottom line. By reducing the time for customer check out, we can sell more customers with less staff time and in high transaction environments, even with fewer lanes. Additional benefits will also come from fewer items mis rung, lower maintenance and repair costs, less down time, faster inventory turnover and better replenishment of sold merchandise. A study that we did a few years ago demonstrated that automated POS increased profitability by over 25% in a gift store.

Point of sale is where it all takes place in a store. If I can’t quickly and efficiently collect the sales dollars from my customers, they will go elsewhere. Have you ever wondered why the major retailers have those great big, heavy-duty cash registers at point of sale? You might figure that they could just get away with a low price PC and cash drawer. What the big retailers have discovered is that well made POS equipment and software pays for itself in a very short period of time. They seldom have any bottlenecks at point of sale and their hardware and software stands up to very tough use. This quality and reliability costs money. A good PC and cash drawer configuration is only about 50% more expensive than the low price models, but the peace of mind and service to the customer is always worth much more.

Recognize that quality costs money and training takes time and money. We often do not ever compute the cost of all the breakdowns on the cheap products and the extra time spent self teaching ourselves the wrong way to do something on our machines. If we spent a little more for hardware, software and training we would be amazed at how much productivity we would gain. Expect to pay up to five to eight times the price of software to learn how to use it properly and up to 50% higher for better quality hardware. Then you can and will get huge increases in productivity that will more than pay for this small investment.

New POS machines are also making it easier to set up and change peripherals. The new USB ports are making it very easy to add not only receipt printers, but also report printers, scanners, scales, customer pole displays, cash drawers and other devices that we may need to change quickly. A good rule of thumb for POS is that it should be easy for our staff to learn and use and fast and almost transparent for our customers.