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
‡ etirement 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.µ ‡ 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 ³out 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 fastmoving 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.