IT in Retail POS

INFORMATION TECHNOLOGY’S INCREASED ROLE IN THE

GLOBAL RETAIL INDUSTRY

• Technology used in retail stores includes front-end and

back-end solutions and technology that connects retail
stores and chains to enterprise-wide business solutions.

• Retail technology ideally improves the customer

experience with regard to service and efficiency.

• New technologies evolved in retailing are Radio

Frequency Identification (RFID), Smart Operating
Solution Smart Ops, and Point of Sale (POS), Digital
Signage etc.
 POS – Evolution from ECR

 The Electronic Cash Register simply gave a sales total for the day or more
sophisticated registers that provided sales by department reporting via a cash
register tape at the end of the day.

 ECR (Electronic Cash Register) was programmed in software which was /had
 Proprietary in nature
 Limited in terms of functionality
 No communication capabilities.

 However in 1973, IBM came up with the 3650 and 3660 Store
Systems that were the first commercial use of client-server
technology, peer to peer communications, LAN simultaneous backup and
remote initialization.

This was the beginning of the modern day POS systems.

 Point of Sales

• Point of Sale (sometimes also known as Point of Service) is the

actual location where the monetary transactions between the buyer
and the seller of goods take place. It is usually used to indicate a
retail shop or the check out counter in shops, supermarkets,
casinos, hotels, restaurants, stadiums, reservation counters at
airports and railways and all other types of retail enterprises.

• Point of sale (POS) systems is electronic systems that provide

businesses with the capability to retain and analyze a wide variety
of inventory and transaction data on a continuous basis.
 Importance of POS

• POS is the primary gateway between a retailer’s information

systems and its customers and plays an important role in
effective customer interaction and service.

• However, POS is also an area plagued by a battery of challenges

imposed by functional as well as technical limitations.

• Being a channel which handles more than 90% of the sales, it is

imperative that POS occupies high priority in the minds of
retailers and forms one of the most investigated and invested
area.
Understanding POS Lifecycle
 Understanding POS Lifecycle

• Inception Stage

 Initial pilot phase and has not be rolled out across all the operations.
 The initial challenge here is to ensure that POS achieves a functionality fitment to
the business while incorporating the best processes and features into it.
 It is likely at this stage to encounter difficulties during implementation and rollout
of new POS applications.

• Consolidation Stage
 This is when the POS has already crossed the pilot stage but is still in the process
of enterprise-wise rollout and integration.
 The day-to-day operational and maintenance processes around the new POS
application are still being worked out.
 Understanding POS Lifecycle
• Maturation Stage

 This is the stage where the POS has been around for years with the retailer and is
quite stable and meets all the staple requirements and effectively handles the
business requirement.
 However the POS has got voluminous enhancement requests pending for
implementation.

• Declination Stage

 At this stage the POS starts showing sure signs of aging.

 It is not able to scale up to the new set of business requirements and also failing
to live up to the performance level expected out of it.
 Understanding POS Lifecycle

• Retirement Stage

 Further investment in the same POS stops yielding credible ROI.

 The maintenance costs of POS would have grown larger .
 Vendors who developed the early POS applications have moved on to new
technology.
 Retailers start contemplating on exploring options for a new POS.
The points shown in the spider chart are catalysts to the
primary drivers that lead to POS change.
Point of Sales Hardware
IT Technologies adopted in Retail Supply Chain
Effect of POS Implementation
According to the field research report prepared by
Microsoft that interviewed over 580 retailers (who had
deployed POS systems), the findings were:

• The application of technology leads to increment in

sales and reduction in expenses, thus causing a rise in
profitability.
“ Technology by itself does not cause sales
increases or expense reductions, but rather the way
the information that technology provides is used
causes the increased sales and reductions in
expenses.”
• Expenses do not get reduced the moment the POS
system is installed. Rather, there is an initial rise in the
expenses due to the process of integration of the systems
and also the effort and the costs involved in the training
of staff employed.
 Expenses Reduce, Sales Increase: How?

 Reduction in check out time

Faster check out of customers at the transaction or billing counter takes
place due to the scanning of the items that the customer purchases.

 Faster approval of purchases from the inventory of the retailer

The POS system enables the PC at the billing counter to be always
connected either through LAN or some other networking technology to the
central database of the inventory. Thus, it enables faster purchase of the
goods and enhances the experience of the customer

 Capturing the product detail

The “out of stock” problem that most retailers experience due to inaccurate
inventory management can be avoided by having a re-ordering software
which would facilitate in increasing the in stock position of merchandise.
 Expenses Reduce, Sales Increase: How?

 Capture of customer information

This feature enables after-marketing to individual customers based on purchase
habits and practices. Also particular customers due to their loyalty or high
spending inclination can be given further discount on products or additional perks
such as redemption of points they secure on purchases made in that store.

 Reconciliation
At the end of the day, the owner can easily track the price of the products sold
with the cash generated in the cash register, hence the occurrence of theft by the
staff at the billing counter is greatly controlled.

 Clocking In Period
Sales associates clock in on the cash register and hence their work hours can be
tracked. This saves time and money which was earlier employed for this process
and also reduce the payroll staff as this data can be directly transported to them.
 Internal benefits

• Use EPOS software to provide sales information - this can help you focus on
more profitable lines, improve your demand forecasting and minimize
inventory.
• Add software modules to improve efficiency - adding Electronic Funds
Transfer (EFT) capability to your system means that every time a sales
transaction is recorded, the credit or debit card transaction is also processed,
reducing the time spent per transaction.
• Link your EPOS terminal to other systems - by connecting EPOS to back-office
systems such as your accounting package, you can increase control over your
business and improve profitability.
• Link your EPOS system to your website - this provides online customers with
rapid, up-to-date stock information. If stock runs out, EPOS can update the site
to show that it is unavailable and warn potential customers that there will be a
delay in delivery or offer an alternative.
 Supply chain benefits

• Integrate EPOS with your stock control system - this allows you to keep stock
information up-to-date in real-time and streamline your supply chain processes.
Your EPOS system can automatically determine which products are fast-
moving and when they need replenishing.

• Provide suppliers with tracking sales and purchasing data - giving suppliers
information on your customer purchasing habits and your marketing helps them
factor your order demands into their plans.
 Supply chain benefits

• Integrating clean POS data within an array of cuttingedge, exception-based,

demand-sensing and planning tools and services now makes it possible for
manufacturers to stay in tune with changing consumer preferences and to
ensure that their supply chain is directly aligned with the market at all times

• Integrate data from EPOS with data from handheld scanners - this means you
can track bar-coded products on the journey from your suppliers to the
warehouse to the store to the final point of sale. You can then identify where
goods are being held up, compare the performance of different suppliers and
their delivery times - and improve on the results.
Case Study - Liliput

• Introduction:
Lilliput entered the domestic retail market with the launch of its first store in Delhi
in August 2002. Today it has a strong presence in the kids wear section, in both
Indian and international markets. It has more than 140 brand outlets, and over
150 large multi brand outlets like Shopper's Stop, Lifestyle, Pantaloon, etc.

• Problem:
With growing number of stores and multiple transactions at the company, there
was a need to record various business processes in a single database. Thus,
Lilliput was in search of a solution to support the growth of its stores. The
company needed a solution, which would enable the employees to track
individual orders, map inventory processes, and handle store operations more
effectively.
Case Study - Liliput

• Approach - Powerful POS Application:

 LS POS is the Point of Sale/Service (POS) part of LS Retail. LS POS is a fast,

dependable and powerful POS application, with a graphic user interface.

 Choosing LS Retail provided Lilliput with advanced features required by the

store to effectively run promotions, loyalty schemes and periodic discounts.

 The bills were faster to generate. Usability of the product reflect in the
immediate incorporation with Microsoft solutions such as MS Word, MS
Excel and Outlook; making it positively easier to comprehend.