Strong POS Strategy Critical to Retail Success

Although retailers continue to pull back on IT budgets, maintaining a strong point-of-sale strategy is critical even in a down economy. “Merchants that remain focused on technology during tough economic times are better positioned for a turnaround than those that stood still,” according to John Pruban, president of Hoffman Estates, Ill.-based point-of-sale solutions provider TekServe POS.

Chain Store Age Web editor/associate editor Samantha Murphy spoke with Pruban about the state of the POS industry, how retailers are reacting and where it’s headed in the future.

What trends are you seeing with POS in the marketplace right now? 

We monitor trends as they relate to the stores, and while there are still some retailers that are “hanging on” to not doing much during these tough economic times, most have begun to move forward with their thought process. We are seeing a surge in anticipated remodel activity in the coming years, and a few will leverage the real estate market into larger than normal store-opening volumes.

From a project standpoint, retailers are beginning to move forward again. However, the criteria by which these projects are justified have changed dramatically. Store investments must enhance the customer experience and/or show a return on investment in a very short time frame—sometimes a year or less.

What challenges are retailers facing with POS systems? 

There is a large amount of dissatisfaction with enterprise POS software providers. In addition to retailers facing increased costs for maintenance and custom programming, they are losing flexibility and their ability to implement change quickly. At a time where they need to achieve more with less and do it quickly, these two trends couldn’t be coming at a worse time. The problem will continue to get worse in the next few years.

What are retailers doing to overcome these challenges? 

I see retailers falling into three categories when it comes to confronting these challenges. The first group is in a “heal the current vendor” approach. This group is currently investing time and energy in meetings, increased communications and to some degree, denial. They believe that through more communication of their dissatisfaction, the vendor will heal.

The second group is paralyzed. They are essentially just “waiting to see what happens.” They acknowledge the problems but are just not ready to do anything about them. They may be keeping an eye on options.

The last group is actively engaged in moving forward. This group is looking to move back to an independent software provider approach. This means they will seek solutions with smaller companies that can provide them increased customer service at a lower cost.

What areas of POS are retailers most interested in right now? 

By a long shot, retailers are most interested in technology that will improve the customer experience. Merchants are very focused on servicing their customers and linking an experience to their environments. Most are manifesting themselves in the digital media, kiosk or self-checkout type of technologies.

Other technologies that are getting attention are those that can reduce, shrink, revolve around a security issue or have a quick return on investment.

It’s no secret that retailers are scaling back on new investments. But is there an area that companies continue to grow despite the down economy? 

Yes, there is an increase in overall outsourcing. Developing a strong help desk is a big focal point in that area. In general, what can be commoditized, will. When you combine the reality that they have to do “more with less,” these types of applications receive routine investigation to determine if it can be outsourced. Retailers usually want to rid themselves of these types of operational responsibilities and focus on what can drive increased customer experiences.

As for how the economy has impacted the POS industry as a whole, retailers are keeping technology longer so there are challenges when dealing with maintaining equipment for longer periods of time.

What trends do you think we will see with POS in the future? 

Customers can expect greater focus on the experience while interacting with the retailer. There will be a high focus on loyalty in different ways than we’ve seen in the past. Walk into an Apple store and you can feel an “experience.” That’s what keeps customers going back.

How is TekServe using social networking platforms? 

Overall, we view social media as a platform to provide retailers with information that keeps them up-to-date on industry trends and best practices that make their lives a littler easier, and helps them connect with other retailers.