Retail merchants' top concerns for POS systems are speed and reliability, according to retail consultant Robert Antall, President of Lake West Group, a Cleveland, Ohio-based retail consulting firm.
Antall, who spoke to Transaction World at the recent Retail Systems 2002 Conference in Chicago, explained that merchants want to move transactions as quickly as possible at the front end, not only for themselves, but also for better customer satisfaction (less time standing in line).
Retailers are also looking for POS systems that provide customer information and other added-value features, according to Antall. Merchants want to be able to track customer information for targeted promotions and other marketing uses. But it won't be enough for an ISO to offer a POS device with enhanced features. The ISOs will need to sell the benefits of those features, not just the features themselves.
"For many years, ISOs have brought retailers new terminals and said Œthis is the best thing on the market'. But merchants have gotten smarter. They want to see how [any new terminals] provide them with additional benefits," Antall said.
Wireless POS devices offer the added benefit of being usable anywhere. But wireless communications are still more expensive than wired communications in most instances, according to Antall. So wireless devices won't get widespread usage for at least two years.
By the year 2004, however, many wireless devices will be equipped with radio frequency (RF) identification. So they will be able to scan products containing chips that Antall expects to replace or to be used in conjunction with bar codes. That would enable a customer to display a credit card at checkout, which could be automatically scanned along with any items being purchased. So self-checkout, being used in some pilots today, could become more widespread, shortening checkout lines.
The cost of RF communications is continuing to drop, which would make the RF identification devices even more attractive to merchants.
"This will have a dramatic effect on the POS market," Antall said.
Also impacting the POS market will be increased use of Linux-based systems, according to Janet M. Sullivan, Senior Manager of Retail Solutions Marketing for Caldera, a Murray Hill, N.J.-based software firm.
The Linux platform can communicate with older and newer POS devices, while other platforms may not communicate with older units, said Sullivan, who also talked to Transaction World at the show.
Another advantage for merchants with multiple POS devices is that Linux-based systems can be upgraded by revising the platform application one time, rather than buying several licenses for new applications of software based on other platforms. This is the same theory behind the Sun vs. Microsoft battle.
That means a lower cost when the merchant wants to add a feature or make another change, according to Sullivan.
Merchants are particularly careful to control such costs in a soft economy, Sullivan added. So, merchants and equipment manufacturers that sell to them are starting to take more notice of Linux-based systems.
One more push for Linux-based systems is the shrinking size of the POS devices, according to Sullivan. The Linux-based software requires less memory.