Magazine Article | May 1, 2000

The Changing Face Of Retail POS Software

The Internet is impacting the retail market. Help give your retailers an edge and boost your bottom line.

Business Solutions, May 2000
It's almost impossible to write a point of sale (POS) article for Business Solutions without mentioning the Internet. And rightly so, since the Internet impacts so many of us at work and at home. Thanks to the Internet, we can shop for everything from food to clothing to home furnishings. Traditional brick-and-mortar stores, however, are beginning to feel the pinch from online competition. This, in turn, impacts how VARs sell retail POS software.

"There is a huge market out there accustomed to not dealing with store clerks," says Jim Sermonet, marketing representative for Kyrus (Taylors, SC). "As a result, retailers are fighting to keep their customers from buying online. Retail POS software should incorporate service-type offerings, such as frequent-shopper programs. They should also manage store inventory trends." Kyrus develops POS software for the retail, hospitality, convenience store, grocery, and school lunch markets. The company has more than 520 employees and reported gross revenue of more than $215 million in 1999.

David Bassiri, president of Cougar Mountain Software (Boise, ID), suggests VARs sell a fully integrated solution. "Fully integrated software incorporates both point of sale and accounting functions," explains Bassiri. "Items sold are automatically deleted from inventory. Everything happens at once. For retailers, this manages up to 80% of their accounting functions." Cougar Mountain Software is a privately held software development firm. Founded in 1992, the company has 65 employees and reported more than $6 million in gross revenue in 1999.

VARs: Know Your Software And Your Markets
"Inventory control is important," notes Sermonet. "The corner convenience store that routinely sells candy bars and beer to its customers would never want to run out of those items." That's why it's also important for VARs to know their customers. To VARs, he says, "Don't be afraid to get out there and learn the technology and embrace it. Successful VARs know the software features and how those features can benefit retailers. As a result, those VARs get the upgrade and the repeat business." Sermonet also points out that knowledgeable resellers can help customers justify the cost of new technology.

Bassiri agrees that VARs can overcome retailers' qualms about cost justification. "These days, smaller retailers must sell $500,000 to $1 million worth of merchandise to survive," says Bassiri. "Mom-and-pop retailers have to compete with Wal-Mart. The profit margin is not there for the smaller retailers. POS software makes these retailers more efficient by tracking the cost of goods and by managing inventory. How can a retailer - even a smaller one - not justify spending $900 to do this?" Bassiri suggests VARs sell a software package that is flexible enough to satisfy a variety of markets, such as liquor, hobby, or tobacco stores. "Look for software features that benefit many markets," he adds.

Take Advantage Of E-Commerce And Add-On Sales
So what does the future hold for retail POS software? Bassiri and Sermonet both have their predictions. "E-commerce will become more of an issue," says Bassiri. "Retailers will rely more on VARs to maintain their retail POS systems. VARs will be like business consultants."

Sermonet sees more add-on sales opportunities for VARs. "POS VARs can sell digital security products to retailers, for example," explains Sermonet. "The digital security camera is tied to the POS system. Exceptions, such as voids and no sales, are filed separately for review by the store manager. The goal is to cut down on employee theft."

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