What's In Store For POS Peripherals?

Where would POS systems be without POS peripherals? If POS systems are the brains of the point of sale, peripherals are the brawn, because these devices collect and deliver vital customer transactional data. Given the importance of POS peripherals, there is good news for POS peripheral VARs. I spoke to industry experts in POS peripherals on what POS VARs should be doing to cope with the economy, why companies are adopting new POS peripherals in 2009, and why it’s faulty logic for VARs and customers alike to view peripherals as an afterthought.

Weather The Economy With POS Peripherals
In a down economy, further understanding customer needs will help you define new market opportunities and drive innovation and revenue growth in every aspect of your organization. For VARs looking to develop a new product or service, market and customer research should be an essential and continuous component of the process. “In 2009, VARs will benefit greatly from gaining a rich understanding of how their customer makes money,” says Mark Olson, president of APG Cash Drawer. “VARs also need to know how their products and services can help solve their customer’s business problems. Retailers do not want to buy technology just because it looks sexy; they need a solid ROI to improve their businesses. Opportunities exist in the marketplace; it just takes some research to find them.”

In addition to understanding your customer, you may also want to position yourself on the cutting edge of industry trends. You should determine if you’re offering the most affordable products on the market — and to whom you’re offering them. “More focus should be spent on those verticals that are doing well, such as QSR [quick service restaurants], supermarkets, and convenience stores,” says Bill Youngquist, VP and general manager at MMF Cash Drawer. If you are not selling affordable products, your competitor will be. “We recommend VARs revisit the product offerings of their existing POS peripheral suppliers to see whether newer, less expensive products are available,” says Steve Hugener, director of marketing at Cherry. “In our experience, VARs sometimes miss this opportunity if they become accustomed to a piece of ‘tried-and-true’ hardware. Also, VARs should focus on those hot-button issues that customers must still address, even in a slow economy. Chief among these today is PCI [payment card industry] compliance and an assurance that customers are protected against a breach of cardholder data.”

A Missed Opportunity?
Some retailers and customers tend to overlook POS peripherals, which can unknowingly lead to a poor customer experience. “Just as CRM [customer relationship management], loyalty cards, credit card processing security, and cash management provide a better buying experience for the consumer, POS peripherals also provide features that provide for a better buying experience [e.g. swivel mount on a PIN pad],” says Youngquist.

Customers have an expectation that all products — POS peripherals included — will work well and perform as promised. This performance expectation level is escalating all the time. “If a customer buys peripherals from a VAR, the customer expects that VAR to correct problems immediately,” says Olson. The VAR is responsible for providing appropriately specified hardware and assurance that the product is suitable for the application. So, a small premium saved by buying or specifying lower grade peripherals might be extremely expensive later on when the VAR must provide a service call on that equipment. Olson further explains VARs must understand the peripheral equipment product and ensure it will meet the demands of both the application and the expectations of the customers.

Plan For Future Expansion
While POS peripherals should not be overlooked, planning for future POS system expansions is tricky. Your customers can’t predict what new POS peripherals will be available when they want to make a POS system change. However, several new developments in POS peripherals may be of interest to your customers in the coming years. “A common challenge faced by every retailer is determining how to raise the loyalty of their customers,” says Olson. “New POS peripherals can often enable a retailer to deliver a faster and better response to customers, speed up the checkout process, reduce downtime occurrences as well as costs, and ultimately improve the loyalty of the customer to their brand.” Indeed, POS peripherals are integrating new technologies that were uncommon or unavailable five years ago. “On the payment side, innovations in contactless technology and encryption at the hardware simply didn’t exist for customers who rolled out their systems four, five, or six years ago,” says Hugener. “Now those innovations are a reality.”

The POS peripherals you are used to selling, such as the PIN pad and customer-facing poll display, will be around for quite some time. “There will be more components available to support contactless card reader infrastructure,” says Hugener. “We will also see an increasing role for biometrics — not necessarily in payment, since this has been tried unsuccessfully, but more likely in network security and time and attendance.” Youngquist explains, “There will be advancements in cash drawers that provide higher security options and more cash tray flexibility.”

Despite the state of the economy, your customers want POS peripherals with simple connection methods and reliable power supplies. With new offerings available, POS peripherals could be one key to your profitability.