Going the POS Route

The point of Point of Sale systems is simple: they allow retailers to know exactly what inventory they've got, what's selling and what's not, and what needs reordering. They also collect information on which customers bought what, and what else they like. Compiling such data by hand takes countless hours, but when it's automatically collected by a POS system it can quickly be used to help generate targeted promotions, make open-to-buy planning practically painless, and even spot inventory shrinkage from shoplifting.

POS systems are wonders of technology, but were a rarity in many specialty retail shops until a few years ago. The systems were expensive, costing several thousand dollars, weren't easy to use, and often had bells and whistles that a single store operation didn't need. But that changed when Intuit entered the market in 2002 with QuickBooks Point of Sale. Designed to work with QuickBooks accounting software, it cost a lot less, and was easy to use and easy to purchase — you could pick one up at Staples or Office Depot in a single green box that included the software, cash drawer, barcode scanner, and receipt printer. All you had to provide was a PC.

This summer, Microsoft launched its version of a small-store POS system, called Microsoft Point of Sale. Mike Dickstein, a Microsoft Business Solutions director, explains why the software giant decided to go after the single-store POS market.

“There are a total of 8.6 million checkout lanes in America, and 45 percent are in single-store retailers,” he says.

Of that 45 percent, some two million stores don't have POS systems, providing a sizable market.

Since Microsoft Point of Sale has a similar feel to Microsoft Windows, the most common operating system in the PC world, the product has a distinct competitive advantage. “It's incredibly easy to use,” notes Dickstein. “We spent thousands of hours watching sales associates, and bringing them into the lab to make the program as simple as possible.”

Microsoft's POS can help retailers avoid shrinkage, track cash, and flag orders that come in incomplete. “Out of stock and slow moving items are the greatest enemies of profitability,” says Dickstein.

In addition, integrated credit card processing and “touchless transactions” (a cashier scans the item, scans the loyalty card, and swipes the credit card) reduce transaction time — an important feature at peak times like the holidays.

Unlike Intuit's software, Microsoft's POS is distributed through certified resellers, not through retailers such as Staples. It also includes only the software. The buyer purchases cash drawer, barcode scanner, etc., a la carte, usually from the same reseller. Microsoft presents this as an advantage, highlighting the value of expert, on-the-scene technical assistance, and choice of hardware.

QuickBooks' latest release, Version 4, has new capabilities that make it even easier to use, according to Steven Aldrich, general manager of QuickBooks Point of Sale. A new interface takes users step-by-step from purchase order to a gift receipt, which helps with the transition from doing it manually. Instead of having just one screen open at a time, users can now work on multiple objects simultaneously.

And Version 4 adds new payment options, accepting debit and ATM cards as well as credit cards. The new version also supports special order requests and multiple addresses for a single customer. There are also four customizable levels of user access, so business owners can control how much information their employees can see.

But the biggest single change is that Intuit now offers a handheld terminal to automate the process of taking inventory. The device was welcomed by Intuit's test retailers, one of whom abandoned his old method of strapping his laptop to a cart that he pushed around the store.

When it comes to competing with Microsoft, Intuit stands on its record: 20 years focusing on small business, technology that's been market-tested for more than ten years, and 35,000 retailers who've bought the program and given feedback. Aldrich also touts the convenience of QuickBook's bundle that includes cash drawer, scanner, receipt printer, and software: “Though you can buy just the software, most customers like to buy it all together because they know it will work. They don't need to customize.”

Intuit also has a network of certified advisors for those who want more help; technical support, free for the first 30 days, is only $50 a month thereafter.

Choosing a POS system is a matter deciding which program has the features your store needs, and determining which interface (and purchase and installation method) you feel most comfortable with. Be sure to try before you buy — check out all the demos and tutorials available, and don't be afraid to ask questions, because even $800 is a considerable investment. Yet whether you choose Microsoft, Intuit, or another reputable system, there's no wrong choice — except not choosing a POS system at all.